40% of SMEs Experience Regulatory Difficulties

Jungjingong Publishes Research Report on 'Policy Support Measures for Regulatory Innovation of SMEs'

[Asia Economy Reporter Kim Cheol-hyun] More than 4 out of 10 small and medium-sized enterprises (SMEs) have experienced difficulties due to regulations, according to a survey. On the 4th, the Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced this while publishing a research report titled "Policy Support Measures for Regulatory Innovation for SMEs," which contains trends, achievements, and policy suggestions related to SME regulatory innovation responses.

According to the report, 44.6% of the responding SMEs answered that they have experienced difficulties due to regulations. The regulations that impose the greatest burden on companies were employment and labor (38.2%), financing (financial) (15.6%), technology development and commercialization (11.6%), and environment (7.4%), in that order. Companies mainly cited measures needed for regulatory innovation as alleviation of costs and administrative burdens (31.4%), prevention of excessive new regulations (27.7%), and improvement of bundled regulations and regulations in new industry sectors (18.0%). Not only unreasonable administrative regulations but also support requirements and standards that cause unnecessary burdens due to gaps with the business field are perceived as regulations. The report explains that for regulatory innovation centered on the regulated entities, practical efforts such as rationalizing the requirements and standards of various support projects and simplifying procedures are necessary to resolve difficulties in the business field.

In addition, more than half (55.1%) of the responding SMEs reported experiencing difficulties entering new businesses due to regulations. The main causes of difficulties were positive regulations that prohibit everything except what is explicitly stated in laws and policies (31.0%), overlapping administrative regulatory burdens (25.0%), and inability to develop products and enter markets due to insufficient application standards (23.0%).

Experts emphasized that policy measures for SME regulatory innovation should focus on ▲abolishing or easing unreasonable regulations ▲reducing the weighted burden on SMEs (differentiation) ▲rationalizing requirements and standards for support projects, and to this end, ▲regulatory innovation centered on the field and demanders ▲setting a regulatory improvement roadmap ▲establishing an integrated management system for regulatory improvement tasks are necessary.

Kim Hak-do, Chairman of SBC, said, "In the face of a global complex economic crisis and the green and digital transformation era, regulatory innovation is more important than anything else for small and medium ventures to boldly challenge new industries and make a new leap forward," adding, "Going forward, SBC will actively discover and resolve regulations perceived as burdensome in the field by utilizing 33 regional headquarters and branches nationwide and will promote regulatory innovation that SMEs can feel."