With Han Seong-sook, Minister of the Ministry of SMEs and Startups, nominated as prime minister-designate on the 7th, the Ministry of SMEs and Startups (MSS) faces a leadership change earlier than expected. If the nominee is inaugurated as prime minister after a National Assembly confirmation hearing, observers see a possibility that the MSS will be run for the time being under a system in which First Vice Minister Noh Yong-seok serves as acting Minister.
The focus is not merely on a vacancy at the Minister level. With the 10th anniversary of its launch coming next year, the question is whether the sweeping policy shift being pursued by the Ministry of SMEs and Startups (MSS) can keep its momentum. Minister Han, who took office in Jul. last year, has pushed structural reforms under a vision to transform the MSS from a "ministry of protection and support" to a "ministry of growth and leap."
◇ Defending exports and ventures amid external headwinds… "on-site, hands-on policies proved effective"
The report card of the Ministry of SMEs and Startups (MSS) during Minister Han's tenure is widely seen as largely positive.
The most notable area is exports. Despite continued external headwinds such as U.S.-driven tariff shocks and Middle East geopolitical risks, small and midsize company exports hit a record high of $118.6 billion last year. In the first quarter of this year as well, $29.8 billion marked the highest performance for the same period.
K-beauty led the growth. The number of K-beauty exporters now reaches about 10,000 companies, and export destinations have expanded to 203 countries. The Ministry of SMEs and Startups (MSS) strengthened support for logistics and customs clearance by working with the Korea Customs Service and Korea Post. First-quarter K-beauty exports this year totaled $2.18 billion, up 21.3% from a year earlier.
The previously subdued venture investment market also rebounded. New venture fund formation in the first quarter reached 4.4 trillion won, a record high, while new venture investment came to 3.3 trillion won, the second-largest on record. The industry views this as a result of private capital flowing back in after the "four major venture powerhouses plan" released last year.
In startups, the "Startup for All Project" is cited as a flagship achievement. As of the deadline last month, 62,944 people had applied to the project that began in Jan. this year, the largest scale among government-led open calls. Including those who advanced to just before submission, about 80,000 people showed interest in starting a business, and platform visitors topped 1.41 million. Among the participants was a 9-year-old child.
Minister Han, a former Naver CEO, is said to have personally taken part in the platform's design process. President Lee Jae-myung also recently said on his social media, "Minister Han Seong-sook, thank you for the great achievement," adding, "The path is opening toward a practically startup-centered nation," in a public assessment.
There were changes in policies for small business owners as well. The Companion Festival held in Apr. drew 33,000 companies and generated about 500 billion won in sales, while domestic demand-boosting events such as Win-Win Payback and Korea Grand Festa continued. The small business outlook BSI (Business Survey Index) rose from 75.5 in Jan. last year to 87.2 in May this year.
There were also efforts to raise perceived policy effectiveness. The Ministry of SMEs and Startups (MSS) introduced "Crisis Alert Talk," through which the government proactively provides support information to small business owners showing signs of distress, and newly set up the "Technology Theft Petition Center" to report technology misappropriation.
In particular, while technology theft had traditionally been an area led by the Korea Fair Trade Commission and the Ministry of Intellectual Property, the MSS is seen to have raised its profile as a key player in technology protection policy by operating a direct response channel. It cut application documents for support programs by more than 50% and is also pushing to integrate 64 scattered policy platforms.
◇ The key is to embed a "full-cycle growth system"… expectations for a prime minister from the MSS
However, many say the biggest change Han left behind is not individual programs but policy philosophy.
Until now, MSS policy had leaned toward protecting and supporting small business owners and small and midsize corporations. During COVID-19, emergency and financial support were central roles. But since taking office, Minister Han has stressed a policy shift, saying, "Now we must proactively nurture corporations with growth potential and promise."
The core is building a "full-cycle growth system." The startup phase is run around the "Startup for All Project," and the growth phase focuses on research and development (R&D) and commercialization support based on TIPS. In the leap phase that follows, the "Jump-up Program" supports exports, investment, and scaling up, while crisis-hit companies are connected to business conversion and second-chance programs.
The Ministry of SMEs and Startups (MSS) aims to connect this into a single ecosystem that runs through startup, growth, leap, and second chance.
Building regional startup ecosystems also remains an important task. The Ministry of SMEs and Startups (MSS) recently designated Daejeon, Daegu, Gwangju, and Ulsan as the "four startup cities." It is an attempt to expand the startup ecosystem concentrated in the greater Seoul area to the regions. By linking local governments, universities, and research institutes, the goal is to create a foundation for unicorn corporations to emerge from the regions as well. The MSS plans to designate six more cities by next year to establish a nationwide startup hub system.
Business restructuring must also enter full implementation. The Ministry of SMEs and Startups (MSS) is pushing to reorganize its detailed programs, currently about 117, to about 95 by next year. The plan is to integrate similar and overlapping programs and concentrate budgets and personnel on performance-centered core programs. Program management will also shift from simple execution to performance evaluation.
Some in the industry say this could become one of the largest policy restructurings since the MSS was launched. With next year marking the 10th anniversary of the MSS's launch, the symbolism is significant. Whether the vision long stressed by Minister Han — "We will streamline the conventional handout-style budget structure" — can continue under the acting system and the next Minister's leadership will be key.
Inside the MSS, there is also a sense of expectation. If Minister Han is inaugurated as prime minister, the expectation is that a prime minister with a high understanding of small and midsize companies, ventures, and small business owner policies could add momentum to regulatory innovation or coordination of new industry policies that had been delayed by inter-ministerial differences.
The presidential office also directly cited the performance during Han's tenure as MSS Minister as the background for the nomination as prime minister-designate. Presidential Chief of Staff Kang Hoon-sik said, "We delivered tangible results such as achieving a record high in small and midsize company exports and revitalizing the startup ecosystem," adding, "The growth of the Korean economy, driven by the semiconductor boom and rising exports, can be converted into growth for everyone — small and midsize companies, small business owners, and neighborhood commercial districts."