Announcement of the Results of the '10th Anniversary Survey on Opinions of Medium-sized Enterprises Regarding the Enforcement of the Medium-sized Enterprises Act' on the 28th
89.5% of Medium-sized Enterprises Agree on the Need for a Comprehensive Revision of the Medium-sized Enterprises Act to Match Changes in the Economic Environment
Since the enforcement of the 'Act on the Promotion of Medium-sized Enterprises' in July 2014, the management environment of medium-sized enterprises and the 'dichotomous perspective of large enterprises versus small and medium enterprises' have improved, according to the perception of the medium-sized enterprise sector.
The Korea Federation of Medium-sized Enterprises (KFME) announced on the 28th in the '10th Anniversary Survey on the Opinions of the Medium-sized Enterprise Sector Regarding the Enforcement of the Act on the Promotion of Medium-sized Enterprises' that nearly half, 47.4%, of medium-sized enterprises responded that their management environment has improved compared to before the enforcement of the Act. Only 12.0% responded that it had not improved.
The KFME explained, "58.9% of medium-sized enterprises responded that the dichotomous perspective between large enterprises and small and medium enterprises has also improved, while only 12.0% said it was insufficient," adding, "This is the result of various support policies being promoted based on the Act on the Promotion of Medium-sized Enterprises and the inclusion of medium-sized enterprises in several laws such as the Restriction of Special Taxation Act."
Government Policies for Medium-sized Enterprises Over the Past 10 Years Receive 'Positive' Satisfaction
Regarding government policies for medium-sized enterprises over the past 10 years, 48.5% of medium-sized enterprises rated them as excellent, and 37.2% as average, confirming that overall satisfaction within the medium-sized enterprise sector is positive. This survey was conducted from the 2nd to the 15th of last month, targeting 392 medium-sized enterprises.
The Act on the Promotion of Medium-sized Enterprises was passed by the National Assembly as a temporary law for 10 years in December 2013, enacted in January 2014, and enforced in July 2014, in response to the need to establish a virtuous growth ladder. In March last year, the temporary law's limitation provisions were removed with broad bipartisan consensus, converting it into a permanent law.
To foster medium-sized enterprises, the government first established a dedicated government organization, the Medium-sized Enterprise Policy Officer, within the Ministry of Knowledge Economy in 2012. Since 2015, every five years, the government has formulated the 'Basic Plan for the Promotion of Medium-sized Enterprises,' announcing support policies such as building a growth ladder for enterprises, and has been promoting various policies based on the Act on the Promotion of Medium-sized Enterprises.
Among the medium-sized enterprises participating in this survey, 89.5% stated that the Act on the Promotion of Medium-sized Enterprises should be fully revised to keep pace with domestic and international economic and social environments, focusing on financial support (26.6%), tax support (23.4%), research and development support (14.2%), and manpower support (11.7%).
A KFME official added, "To effectively respond to the rapid global industrial restructuring, legal support systems that lead to enhancing the innovation capabilities of medium-sized enterprises, focusing on technological competitiveness such as expanding R&D tax benefits (36.2%), technology protection support (17.9%), and providing information on overseas market entry (17.6%), need to be strengthened."
Financial and Tax Burdens Persist... Comprehensive Legal Revision Needed to Reflect Environmental Changes
Financial and tax burdens experienced by medium-sized enterprises that have graduated from small and medium enterprises remain significant. The largest proportion, 59.5%, reported an average interest rate increase of 1 percentage point (P) or more but less than 1.5%P, followed by 24.2% reporting an increase of 1.5%P or more but less than 2%P, and 7.9% reporting less than 1%P.
The increase in tax burden due to the reduction of tax support for small and medium enterprises was confirmed as 62.8% for 5% or more but less than 10%, 19.6% for less than 5%, and 12.0% for 10% or more but less than 15%.
There was also an opinion that the sales scale and years of operation defining 'early-stage medium-sized enterprises' should be adjusted according to the expansion of the economic scale to support continuous and stable growth after entering the medium-sized enterprise category.
51.0% of medium-sized enterprises responded that the currently commonly applied sales scale criterion of less than 300 billion KRW is appropriate, but 38.0% said it should be raised to less than 500 billion KRW.
Regarding the desirable years of operation for early-stage medium-sized enterprises, less than 5 years (48.7%) was the highest, followed by less than 3 years (47.2%) and less than 7 years (2.3%).
Special exceptions for early-stage medium-sized enterprises that need expansion included manpower support-related exceptions (19.5%), special exceptions related to overseas market support projects (18.6%), and technology protection support-related exceptions (15.3%).
Park Yang-gyun, Head of Policy at KFME, stated, "Since the enforcement of the Act on the Promotion of Medium-sized Enterprises, the number of medium-sized enterprises increased from 3,846 in 2013 to 5,576 in 2022, employment rose from 1.161 million to 1.587 million, and exports grew from 87.69 billion USD to 123.1 billion USD, confirming its effectiveness," adding, "To support the sustainable growth of medium-sized enterprises, we will closely cooperate with the government and the National Assembly for a comprehensive revision and strengthening of the Act on the Promotion of Medium-sized Enterprises that reflects rapid domestic and international environmental changes such as global supply chain restructuring and ESG regulations."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
