Government: "Increase Mid-sized Companies to 6,000 and Achieve $120 Billion in Exports in 4 Years"

Ministry of Industry Announces 2nd Basic Plan via Mid-sized Enterprise Policy Committee
Customized Support Including World Class+... Resolving Corporate Financial Difficulties
Technology Cooperation with Germany... Transition of Mid-sized Enterprise Act to Permanent Law

[Asia Economy Reporter Kim Bo-kyung] The government is rolling up its sleeves to prepare support measures such as research and development (R&D) and resolving financial difficulties to strengthen the competitiveness of mid-sized companies, which play the 'backbone' role in our industry. Through this, the goal is to increase the number of mid-sized companies to 6,000 by 2024 and achieve export sales of 120 billion dollars.

On the 25th, the Ministry of Trade, Industry and Energy announced the '2nd Basic Plan for Promoting the Growth of Mid-sized Companies' through the Mid-sized Company Policy Committee (Chairman Sung Yoon-mo), which is jointly composed of the public and private sectors. To prevent the spread of the novel coronavirus infection (COVID-19), the committee was not held in person, and the basic plan was finalized in writing.

The basic plan is a five-year plan for fostering and strengthening the competitiveness of mid-sized companies, based on the Mid-sized Companies Special Act. Since the first basic plan was established by the Small and Medium Business Administration in June 2015, this is the first mid- to long-term plan created by the Ministry of Trade, Industry and Energy.

Minister Sung Yoon-mo of the Ministry of Trade, Industry and Energy stated, "Mid-sized companies are the backbone that plays an important role in strengthening industrial competitiveness and cooperation between large and small and medium enterprises," and added, "It is urgent to foster mid-sized companies that lead the global market with outstanding technological capabilities."

Through this 2nd basic plan, the government aims to increase the number of mid-sized companies from 4,635 in 2018 to 6,000 by 2024. The export amount of mid-sized companies is targeted to grow from 98.2 billion dollars in 2018 to 120 billion dollars in 2024. The share of mid-sized companies' sales among all companies is planned to expand from 15.7% to 17% during the same period.

The government will operate a comprehensive financial program for innovative companies worth 40 trillion won to resolve financial difficulties faced by mid-sized companies. The plan includes financial support measures such as increasing loan limits or lowering interest rates through evaluations considering the companies' technological and innovative capabilities.

This year, a new financial support program for new facility investments worth 4.5 trillion won will be established, and a Financial Difficulty Resolution Committee under the Mid-sized Company Policy Committee will be formed to actively address financial challenges.

Additionally, the government plans to create a 'Mid-sized Growth Fund' for mid-sized companies to invest in startups with innovative technologies and ideas necessary for entering new businesses, and a 'Manufacturing R&D Fund' for manufacturing mid-sized companies to invest in R&D activities. The Mid-sized Growth Fund will increase from 30 billion won this year to 100 billion won by 2024, and the Manufacturing R&D Fund aims to reach 600 billion won by 2022.

Through the 'World Class Plus (+) Project,' 150 mid-sized and prospective mid-sized companies with high innovation potential will be nurtured. From next year until 2033, a total of 913.5 billion won combining government and private capital will be invested in the World Class Plus project.

While fostering 100 excellent technology research institutes for mid-sized companies, the government will open the 'Korea-Germany Materials and Components Technology Cooperation Center' in Germany in the first half of this year to promote cooperation with Germany, a technologically advanced country.

To secure talent in artificial intelligence (AI) and big data, a mid-sized company employment-type master's and doctoral program will be operated at 10 universities.

Furthermore, the government will assist mid-sized companies in entering new markets such as Vietnam and Indonesia, and support export finance and export consulting. Trade insurance for mid-sized companies will be expanded to 20 trillion won this year, and 22 billion won will be invested in support projects to strengthen export capabilities such as overseas sales and legal advice.

For specialized companies in materials, components, and equipment, the plan is to nurture more than 50 promising mid-sized companies into global companies, focusing on six major sectors including semiconductors, displays, and automobiles. Additionally, 100 regional representative mid-sized companies that drive the local economy will be selected to link win-win cooperation R&D with partner companies, export, and patent support.

The Ministry of Trade, Industry and Energy plans to convert the Mid-sized Companies Special Act, which is scheduled to expire in July 2024, into a permanent law (Mid-sized Companies Basic Act) to establish a stable legal support system for mid-sized companies.

Minister Sung said, "Through this 2nd basic plan, we will support mid-sized companies with innovative capabilities and potential to contribute to realizing an unwavering industrial powerhouse and revitalizing the national economy."