[Square] The New Government's New Growth Engine is 'Fostering Women Entrepreneurs'

We are emerging from the tedious COVID-19 pandemic and returning to normal life. However, many small-scale self-employed individuals and women-led businesses concentrated in the service sector have yet to escape the long winter. Yet, hope exists even in the darkness. Despite the difficulties posed by COVID-19, all citizens are diligently fulfilling their respective livelihoods and striving to overcome the crisis.

Last month, the association held a policy forum titled "New Government's Policy Directions and Tasks for Women Entrepreneurs." Co-hosted with the office of National Assembly member Han Mu-gyeong, the forum projected that the working-age population would decrease by 3.62 million over the next decade starting from 2020 due to low birth rates and aging. The core message was that to overcome this, it is essential to convert the economically inactive population, especially women, into economically active participants.

The total number of women-led enterprises nationwide is 2.77 million, accounting for 40.2% of all 6.89 million enterprises, but their sales share is only 10%. This means that although women-owned businesses are numerous, they tend to be small-scale. The female labor force participation rate in South Korea is only about 60%, ranking 32nd out of 38 OECD countries. Considering this, increasing women's economic activity has become a pressing societal task.

With the inauguration of the new government, various ideas must be gathered to enhance women's participation in economic activities. The first thought is to activate a win-win platform for women entrepreneurs. Small and medium enterprises produce excellent products and services but face difficulties in securing distribution and sales channels. The association plans to create a collaborative platform connecting approximately 60,000 companies that have received the Women-Owned Business Certification and launch an online shopping mall where outstanding women entrepreneurs' products and services can be purchased. Expanding sales channels is essential to increasing economic activity.

Support for research and development (R&D) and technology must also be strengthened. Women-led businesses, which have traditionally been concentrated in wholesale, retail, and service sectors, are recently seeing an increase in startups in advanced ICT fields such as artificial intelligence (AI), the Internet of Things (IoT), and big data. The Ministry of SMEs and Startups provides preferential support to promote technology-based women startups; however, the benefit rate of R&D projects for women-owned businesses is only 9.3% in terms of the number of companies and 5.8% in terms of funding. Although the startup environment has improved significantly, it is now time to expand policies supporting technology sectors uniquely envisioned by women.

Facility improvements at startup incubation centers are also necessary. Since 2007, the association has operated startup incubation centers in 18 regions nationwide, accommodating women-led businesses less than three years old and prospective women entrepreneurs, supporting their startup activities. However, some centers have outdated facilities and are located in entertainment districts, making it difficult to fulfill their original mission. Startup incubation centers, which serve as stepping stones for women beginning economic activities, must provide safe and women-friendly facilities to create an environment where they can focus more on their entrepreneurial activities.

Expanding women's economic participation is not only a solution to the pressing issues of low birth rates, aging population, and job creation but also a necessary condition for sustainable growth. Considering the difficult situation of women-owned businesses, which exceed 40% in number but receive only 10% of policy benefits, we look forward to the new government's active interest and meticulous policy design. The new government's new growth engine must be found in fostering women entrepreneurs.

Lee Jeong-han, President of the Korea Women Entrepreneurs Association