"500 Digital Traditional Markets by 2025"…Support for Small Business Digital Transformation

Minister Park Young-sun of the Ministry of SMEs and Startups and Park Ju-bong, the Small Business Ombudsman, are conversing at the 3rd Korean New Deal Ministerial Meeting and the 16th Emergency Economic Central Countermeasures Headquarters Meeting held on the 17th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Moon Hyewon] The government has decided to establish 500 digital traditional markets by 2025. Digital traditional markets are traditional markets, which have mainly operated through face-to-face sales, that incorporate technologies such as online delivery, wireless payment, and virtual reality (VR) maps.

On the 17th, the Ministry of SMEs and Startups announced a digital transformation plan for small business owners at the 16th Emergency Economic Central Countermeasures Headquarters meeting and the 3rd Korean New Deal Ministerial Meeting. This plan was prepared to provide urgent damage support to small business owners struggling due to the spread of COVID-19 and to proactively respond to non-face-to-face and digital transformation, thereby fundamentally strengthening the competitiveness of small business owners.

The Ministry of SMEs and Startups plans to select three locations by 2022 to create a Digital Commercial Renaissance project that encompasses not only digital traditional markets but also smart stores, supermarkets, and smart workshops within a single commercial district.

Smart stores are businesses that apply Internet of Things (IoT), augmented reality (AR), virtual reality (VR), artificial intelligence (AI), robotics, and online technologies to industries such as dining, cafes, and hair salons to support management and service innovation. The ministry plans to distribute 100,000 smart stores by 2025 and support small business owners' live commerce using the Gachisapida platform.

Smart workshops introduce basic smart technologies (such as IoT) for automation devices and data collection/connection into predominantly manual production processes, with an expected distribution of 10,000 units by 2025.

The ministry will also provide on-site practical training to 50,000 digitally vulnerable groups, including middle-aged and older adults, by 2025, and develop digital utilization education programs targeting small business owners in overcrowded industries with low digital usage. To this end, the number of digital education centers capable of digital education, experience, and practice will be significantly increased to eight locations by 2022 (currently one), and an online-exclusive education channel for small business owners, tentatively named 'Gachisapida Edu,' will be established to expand online and offline educational infrastructure.

Along with the expansion of voluntary win-win cooperation companies ('Jasangan Companies') that support the digital transformation of small business owners, the ministry plans to discover cooperation profit-sharing models. To this end, a 40 billion KRW win-win cooperation fund will be created to distribute kiosks, digital payment terminals, and other equipment to small business owners.

Starting in the second half of this year, an online platform transaction survey will be conducted, and a delivery platform council will be formed and operated to expand the foundation for win-win cooperation on online platforms. Additionally, revisions to the Win-Win Cooperation Act will be pursued to establish a legal basis. From next year, a digital transformation support system tailored to the life cycle of small business owners?including startup, growth, and re-entry?will be established and supported.

Support infrastructure for digital utilization, such as big data platforms and payment systems, will also be expanded.

Specifically, the plans include ▲supporting over 1 million simple payment infrastructures by next year ▲expanding simple payment merchant stores to 2 million by 2023 ▲pursuing reductions in online shopping mall and delivery app fees by next year ▲providing 300 billion KRW in digitalization policy funds and 100 billion KRW for smart equipment purchases starting next year ▲offering special guarantees worth 200 billion KRW to companies possessing smart technologies from the second half of this year.

To this end, the Ministry of SMEs and Startups and the Small Enterprise and Market Service will establish a support system for small business owners' digital transformation, and revisions to the Act on the Protection and Support of Small Business Owners will be pursued to ensure stable operation of support projects.

Minister Park Young-sun of the Ministry of SMEs and Startups stated, "We will ensure that the announced measures operate smoothly in the field so that the livelihoods of small business owners become smarter, the digital gap among small business owners is eliminated, and the foundation is laid for neighborhood merchants to grow into global small business owners. Since the survival of small business owners means the survival of the grassroots economy, we will do our best to strengthen their self-sustainability."