Over 400 New 'Innovative Company National Representatives' Added This Year... What Support Will They Receive?

More than 400 Companies to Be Added Within This Year

[Asia Economy Reporter Park Sun-mi] The Financial Services Commission will select an additional 200 national representative innovative companies in April to support the securing of new growth engines for our economy.

Following the selection of 279 companies last year, the Financial Services Commission announced that it will select an additional 200 companies in April, aiming to select more than 400 companies within this year. It will also encourage private investment by providing excess profit incentives to asset management companies that invest a certain percentage or more in the selected companies. This program involves relevant ministries recommending and selecting highly innovative companies based on selection criteria and procedures tailored to the characteristics of each industrial sector. Among the selected companies, those with financial needs will receive customized support after reviewing company size and financial demand.

Which companies have been selected so far?

In 2020, five institutions including the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, the Ministry of Science and ICT, the Ministry of Health and Welfare, and the Ministry of Oceans and Fisheries participated.

Companies selected by the Ministry of Trade, Industry and Energy met at least one of the following four criteria: ▲ companies whose technological performance and innovativeness were confirmed through existing programs such as World Class, ▲ companies with a history of raising more than 2 billion KRW in cumulative investment from domestic and foreign venture capital over the past three years, ▲ companies that received Technology Credit Rating (TCB) T1 to T3 in the past three years, or ▲ companies with an average annual sales growth rate of 20% or more over the past three years or 50% or more in one year.

The Ministry of SMEs and Startups selected companies that requested financial support among those confirmed for technological performance and innovativeness through existing programs such as the Small and Medium Materials, Parts, and Equipment (SoBuJang) Strong Small Companies 100. The Ministry of Science and ICT prepared a target group by selecting promising companies participating in the Promising Company Development Project and the Digital New Deal Project, then conducted internal financial evaluations and innovation and growth assessments.

The Ministry of Health and Welfare formed a pool linked to existing certification systems such as health new technology certification and selected companies through the review of the Health Industry Innovation Startup Center’s Technology Review Committee. The Ministry of Oceans and Fisheries formed a candidate group through recommendations from related departments and affiliated organizations, then selected companies through evaluations by a private evaluation committee.

What support is provided?

So far, a total of 279 representative innovative companies have been selected in two rounds (July and November last year), and among them, 90 companies with financial needs received a total of 178 cases of loans, guarantees, and investment support amounting to 1.0752 trillion KRW. Promising venture companies with high growth potential as global players in each field were also given investment opportunities through the 'KDB NextRound Special Session.'

From the first half of this year, the selection institutions will diversify to include the Ministry of Culture, Sports and Tourism, the Ministry of Land, Infrastructure and Transport, the Ministry of Environment, and the Ministry of Agriculture, Food and Rural Affairs to discover innovative companies in various fields such as content and smart farms. The plan is to discover more than 200 innovative companies each semester and select a total of over 1,000 representative innovative companies by 2022.

Since the selected companies have verified innovativeness and technological capabilities, they can receive maximum support even if their financial condition is somewhat poor.

Using a simplified screening system focused on innovation and growth potential with relaxed financial requirements, more active loan and guarantee support will be provided through limit increases, interest rate reductions, and preferential guarantee ratios. Various non-financial supports that can promote and strengthen the innovative growth of companies will also be provided simultaneously. For innovative companies that have difficulty receiving financial support or want consulting, information and know-how necessary for management and financial management will be provided, and business infrastructure for overseas market development will be actively supported.

In addition to existing policy finance, active support will be provided to attract private funds. Large-scale fundraising will be supported by organizing domestic and international investment briefings and networking opportunities between the financial investment industry, venture investment industry, and innovative companies. Incentives will be given when operating policy funds such as New Deal Funds to induce active investment in selected innovative companies.