SMEs 38.0% "Need to Expand Government Policy Funds for Innovation Activities"

SME Central Association Announces Survey Results on Innovation Activities of Small and Medium Enterprises

38.0% of small and medium-sized enterprises (SMEs) identified the expansion of government policy funds as the most necessary support measure to strengthen innovation activities.

The Korea Federation of SMEs announced on the 19th that, as a result of conducting the 'Status Survey on SME Innovation Activities' targeting 800 SMEs, the number of companies responding that innovation activities are necessary (57.2%) was three times higher than those responding that they are not necessary (19.2%).

The reasons for recognizing the need for innovation activities were 'expansion of main product sales' (33.3%), 'productivity improvement' (26.9%), 'diversification of products and goods' (12.5%), 'response to existing client demand' (9.2%), 'entry into new businesses' (7.9%), and 'response to changes in technology trends' (7.7%).

The person who played the most important role in carrying out innovation activities was 'employees of the technology development department' (36.0%), followed by 'representative (CEO)' (31.0%), 'executives of the technology development department' (20.2%), and 'personnel in charge of business strategy and planning' (8.9%).

The triggers for carrying out innovation activities were 'weakening competitiveness of own products' (26.5%), 'increase in the emergence of new products and services' (22.6%), 'expansion of competitors' market share' (17.6%), 'lack of diversity in own product types' (15.5%), 'rapid changes in consumer needs' (7.9%), 'strengthening of patent and intellectual property protection' (5.0%), and 'rapid changes in manufacturing technology' (3.4%), in that order.

The method of financing innovation activities was highest for 'own funds' at 78.0%, followed by 'government/local government support/loan funds' (12.9%), and 'loans from banks and other financial institutions' (8.1%). The biggest difficulties in carrying out innovation activities were also 'funding' at 25.7%, followed by 'securing professional personnel' (22.8%), 'acquisition of innovation information and ideas' (12.3%), 'lack of market information' (12.3%), and 'protection of technology and personnel' (7.3%).

The most necessary support measure to strengthen innovation activities of SMEs was 'expansion of government policy funds' (38.0%), followed by 'support for training and hiring professional personnel' (19.8%), 'easing restrictions on loans from financial institutions' (10.1%), 'expansion of tax credits for investment funds' (10.1%), and 'expansion of information provision on market and technology trends' (9.4%).

Choo Moon-gap, head of the Economic Policy Headquarters at the Korea Federation of SMEs, said, “More than half of the SMEs participating in the survey responded that they recognize the necessity of innovation activities, which is a symbolic result showing the dynamism and growth potential of SMEs,” and added, “The government should support the innovative growth of SMEs through active support policies such as expanding policy funds.”