Discovering 'Top 100 Lighthouse Companies' to Foster 6,000 Mid-sized Enterprises in 2024

Ministry of Industry Holds the '2nd Mid-sized Enterprise Policy Committee' Meeting

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government has unveiled a blueprint to discover 100 'Lighthouse Companies' that will lead innovation among mid-sized enterprises by 2024, aiming to increase the total number of mid-sized enterprises to 6,000. The plan also intends to raise the sales share of mid-sized enterprises to 17% and the proportion of export companies among them to 50%.

The Ministry of Trade, Industry and Energy held the '2nd Mid-sized Enterprise Policy Committee' on the 24th and announced these measures.

Mid-sized enterprises refer to companies positioned between large corporations (mutual investment restricted companies) and small and medium enterprises. The criteria for mid-sized enterprises include sales between 40 billion and 150 billion KRW and asset size between 500 billion and less than 10 trillion KRW, depending on the industry.

As an implementation plan, the Ministry will launch the Lighthouse Project to discover and intensively nurture 100 top lighthouse companies by 2024. The support for mid-sized enterprises will focus on three major areas?▲new business discovery ▲overseas market entry ▲digital transformation?through 14 execution tasks.

First, the Ministry will link eight major public research institutes with mid-sized enterprises possessing excellent technological capabilities to identify business restructuring demands centered on promising industries such as future cars, next-generation displays, and biohealth. By 2024, it aims to attract private investments worth over 1 trillion KRW to a total of 100 companies. Currently, 30.6% of mid-sized enterprises are first-tier or lower suppliers to large corporations and are passive in entering new businesses.

Additionally, a 500 billion KRW technology innovation fund will be established, allowing mid-sized enterprise venture capital (CVC) to participate as strategic investors (SI), expanding opportunities to discover and collaborate with outstanding startups. The number of innovative products receiving preferential treatment when entering the public procurement market will increase from 345 last year to 582 this year. Mid-sized enterprises will also be added as investment targets for the 'Industrial Technology Policy Fund,' strengthening financial support for commercialization.

Active support will also be provided for mid-sized enterprises, which are mainly domestic market-oriented, to enter overseas markets. Currently, 82.5% of mid-sized enterprises have exports under 10 million USD. The Ministry will form an export pioneering business club in the first half of the year, targeting 300 companies for capability diagnosis and overseas market research, and will support 100 companies with buyer discovery, marketing support, and export financing.

Furthermore, to promote digital transformation, CEO and executive training will be conducted, and 4,000 digital specialists will be nurtured. Export credit guarantees, tax support, and research and development (R&D) support will also be expanded.

At the policy committee meeting, the Ministry also approved the '2021 Mid-sized Enterprise Growth Promotion Implementation Plan.'

This year, following last year, the Ministry will select top material, parts, and equipment (MPE) companies to strengthen their capabilities and open the 'MPE Hub Center' to discover promising MPE companies. New Deal financing will be implemented for mid-sized and small enterprises, and additional selections will be made for 'Innovative National Representative Companies 1000' and 'Global Challengers 200.' The COVID-19 P-CBO will also continue to be supported with a scale of 4.1 trillion KRW.

In the R&D sector, 66.7 billion KRW, a 60% increase from the previous year, will be supported for programs exclusively used by mid-sized enterprises such as World Class+ and Strong Venture-type Mid-sized Enterprise Development Projects. Furthermore, to remove institutional barriers hindering the growth of mid-sized enterprises, measures such as establishing local tax reductions for affiliated research institutes, easing R&D burdens, and expanding the selection of prestigious long-established companies will be pursued.

Seong Yoon-mo, Minister of Trade, Industry and Energy, said, "Mid-sized enterprises are a core group of companies essential for strengthening competitiveness in both main and new industries, serving as an important backbone of our industry. The government will support mid-sized enterprises so that their innovation capabilities and potential can contribute to realizing an industrial powerhouse leading the global economy. I urge mid-sized enterprises to take the lead in innovation growth and job creation."