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Korea announces growth acceleration scheme for middle-market companies 2023-01-17

 

The Ministry of Trade, Industry and Energy (MOTIE) announced on January 16 the growth acceleration scheme for middle-market companies to be pushed by South Korea’s new regime, during a conference held at MCNEX (Incheon), one of the world’s top automotive camera producers.

The conference was attended by MOTIE’s 2nd Vice Minister Park Il-jun, as well as representatives of six middle-market companies and relevant institutions, including the Korea Trade-Investment Promotion Agency (KOTRA) and Korea Institute for Advancement of Technology (KIAT).

Vice Minister Park outlined the vision for middle-market companies, by 2030, to reach 10,000 in number, 2.5 million in employment and USD 200 billion in exports.

In 2021, middle-market companies numbered 5,480, their employment and exports totaling 1.6 million and $113.8 billion, respectively.

To achieve the above goal, MOTIE outlined three main policy directions.

First, middle-market companies’ role will be bolstered in the following four strategic aspects: 1) entering global markets 2) stabilizing supply chains 3) responding to digital transition 4) building stepping stones bridging SMEs and middle-market companies. MOTIE plans to inject KRW 1.5 trillion in 1)-3) over the next 10 years and concentrate support on 100-150 leading businesses.

Second, a support system will be established to induce voluntary innovation from companies across all phases of 1) seeking new business ideas 2) securing technology 3) sourcing investment and funding. This aims to help middle-market companies overcome stagnation and achieve continued growth. For 3), MOTIE intends to create a 1 trillion won fund by 2027.

The third policy direction is focused on fostering a growth-accelerating legal, regulatory and human resources system. The special act for middle-market companies will be modified into a general law to promote legal stability. Factors obstructing growth will be eliminated, while talent will be scouted and trained.

Vice Minister Park remarked that “middle-market companies make up the backbone of domestic industries and will play a core role for the Korean economy in overcoming current challenges and making new leaps.”