Government Holds 'Mid-sized Company Scaling Up' On-site Meeting... "Reforming Regulations That Hinder Growth"

As Companies Grow, Regulations Increase
"Support Standards and Methods to Be Redesigned"

The government has launched a series of relay on-site meetings to directly listen to the challenges faced by mid-sized companies and seek institutional improvements in order to support their scaling up into large enterprises.

According to the Ministry of Economy and Finance, a "Mid-sized Company Scale-up" relay on-site meeting was held on the 13th, attended by representatives from 11 mid-sized companies, the Korea Federation of Middle Market Enterprises, and other relevant organizations. The meeting focused on regulations and the discontinuation of support that arise during the growth process of companies. In addition to the Ministry of Economy and Finance, vice-minister-level officials from the Ministry of Trade, Industry and Energy and the Fair Trade Commission also participated, working together to find joint solutions across ministries.

This meeting is a follow-up to the "1st Growth Strategy Task Force," which was launched on August 5. With the goal of promoting corporate growth and enhancing economic dynamism, the government is conducting relay-style on-site meetings to directly hear demands for easing corporate burdens and improving regulations. The meeting on this day was held under the theme of "Scaling Up from Mid-sized Company to Large Enterprise," addressing institutional obstacles faced by mid-sized companies that are on a growth trajectory.

Hyungil Lee, Vice Minister of Strategy and Finance, is delivering opening remarks at the "Mid-sized Enterprise Scale-up Relay On-site Meeting" held on the morning of the 13th at the Listed Companies Association Hall in Mapo-gu, Seoul.

Participants unanimously pointed out that as companies grow from small to mid-sized and then to large enterprises, various benefits sharply decrease while regulations increase significantly, creating a regressive structure that dampens the motivation to grow. According to the Korea Economic Research Institute, as of June 2023, when a small company transitions to a mid-sized company, about 80 types of support are lost and more than 20 new regulations are imposed; upon becoming a large enterprise, 61 laws and 342 regulations apply. They noted that this structure creates so-called "Peter Pan Syndrome" policy incentives, which encourage companies to delay growth.

Tailored measures for mid-sized companies that have entered a phase of stagnant productivity (those in operation for 8 to 19 years) were also discussed. There was a suggestion to move away from a one-sided, funding-focused approach and shift to a "comprehensive service support system" that covers everything from establishing company-specific growth strategies to global expansion. The need to expand dedicated fiscal and financial programs for mid-sized companies and to strengthen the statistical infrastructure for more data-driven policy design was also emphasized.

Going forward, the government plans to continue holding relay on-site meetings with relevant ministries to gather feedback from the field and consistently identify areas for improvement in regulations and support systems. The government stated, "We will boldly improve size-based regulations that hinder the growth of mid-sized companies into large enterprises, and redesign support standards and methods so that government assistance decreases gradually rather than sharply as companies grow."