Reflecting the Longstanding Demands of the Small Business Sector...
Focus on Expanding Authority
Emphasis on Recovery, Fairness, and Digital Transformation
"Policy Execution Must Be Strengthened as an Independent Domain"
With the government deciding to establish a new vice minister position dedicated to small business policy within the Ministry of SMEs and Startups, attention is focused on how effectively the ministry's support functions for small business owners can be strengthened. Given that small business policy is extremely important yet difficult to implement effectively, many believe that the key is to ensure substance, regardless of the formal authority or status of the new vice ministerial post.
According to the government and the small business community on September 9, the newly created Second Vice Minister, responsible exclusively for small business, will comprehensively oversee the formulation of small business policies, promotion of startups and securing of sales channels, support and development of small businesses, fostering mutual cooperation, assistance for business closure and restart, and support for the management stability of small business owners.
Since being upgraded from the Small and Medium Business Administration to a full ministry in 2017, the Ministry of SMEs and Startups has operated under a single vice minister system. Although the enactment of the Basic Law on Small Businesses in 2019 granted small businesses an independent legal status, freeing them from being a subcategory under SMEs, there have still been criticisms that their voice within the ministry remains weak. As a result, the industry has consistently called for a "policy control tower" to represent the interests of small business owners. The establishment of this new vice minister position reflects these longstanding demands from the field.
However, the reorganization plan does not include specific measures for expanding the organization, such as upgrading the headquarters or creating new bureaus, as seen in the Ministry of Employment and Labor. Within government circles, it is widely expected that the new vice minister will be positioned above the existing Small Business Policy Office, given the designation "dedicated to small business."
Currently, the Ministry of SMEs and Startups is organized into four offices under the vice minister: Planning and Coordination Office, SME Policy Office, Startup and Venture Innovation Office, and Small Business Policy Office. The Small Business Policy Office itself is divided into three main divisions: Small Business Policy, Mutual Cooperation Policy, and Small Business Management Stability Support. Under these, there are twelve departments, including Small Business Policy, Small Business Growth Promotion, Traditional Market, Mutual Cooperation Policy, Small Business Management Stability, and Digital Small Business. A ministry official stated, "The absolute number of departments within the Small Business Policy Office is currently small," adding, "The core of this reorganization is how to expand and strengthen existing functions."
As part of its national agenda, the government has proposed supporting the restart of closed small businesses, revitalizing local commercial districts, and improving unfair trade practices as key measures to boost the livelihoods of small business owners. Minister Han Sung-sook has also emphasized strengthening the social safety net for small business owners and accelerating digital transformation as top policy priorities since taking office. Following the creation of the Second Vice Minister, support for the restart of closed small businesses, improvement of unfair trade practices with franchise and platform operators, expansion of online sales channels, and support for digital transformation are expected to be prioritized and strengthened.
The small business community hopes that the entire ministry will work to ensure the effectiveness and substance of this reorganization. Above all, they want the ministry to expand its authority and budget so that it can have a real voice during consultations with other ministries. Currently, labor policy is handled by the Ministry of Employment and Labor, financial policy by the Ministry of Economy and Finance and the Financial Services Commission, and regulation of unfair trade practices by the Fair Trade Commission. The creation of the new vice minister position is seen as an opportunity for the Ministry of SMEs and Startups to take on some of these functions and strengthen its ability to implement small business policies.
Related issues are scattered across several ministries. For example, the Distribution Industry Development Act, which is set to expire in November, falls under the Ministry of Trade, Industry and Energy, but its regulation of large supermarkets and super-supermarkets (SSMs) directly affects the interests of small business owners by protecting local commercial districts. The recent controversy over the mandatory introduction of barrier-free kiosks also stems from legislation overseen by the Ministry of Health and Welfare. Given the broad scope of issues facing small business owners, the industry and others hope the ministry's voice will be amplified and its functions and influence enhanced to better reflect current realities.
A representative of the small business community stated, "There are cases where the positions of various ministries and small business owners are at odds," adding, "We hope that the creation of this vice minister position will mark the separation of small business policy into an independent area and lead to increased budget and personnel support."
Meanwhile, the ruling party and the government plan to pass the amendment to the Government Organization Act, which includes this reorganization plan, at the plenary session on the 25th and implement it immediately upon promulgation. The Ministry of SMEs and Startups will discuss internal organizational restructuring related to the introduction of the Second Vice Minister with the Ministry of the Interior and Safety.
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