"45% of SMEs Experience Regulatory Difficulties... Most Choose to Give Up Rather Than Resolve"

SME Ombudsman Releases Survey Results
Local Governments Most Frequently Approached for Regulatory Resolution
Ombudsman: "Efforts to Enhance Accessibility and Convenience for Submissions"

A survey found that 45% of small and medium-sized enterprises (SMEs) have experienced regulatory obstacles or difficulties while operating their businesses. However, only 37% of these companies reported making efforts to resolve such regulatory challenges.

On January 20, the SME Ombudsman announced the results of the "SME Ombudsman Regulatory Difficulties Survey." The survey was conducted in December of last year, targeting 500 SME executives and employees and 500 members of the general public nationwide.

According to the survey results, 45% of SMEs reported experiencing regulatory difficulties. The most common areas were financial regulations (21.4%), followed by employment and labor regulations (18.6%), and safety-related regulations (15%). Among those who faced regulatory challenges, only 37% said they were actually making efforts to resolve them. Most respondents stated that, rather than seeking solutions, they tended to scale down, modify, or abandon their business to comply with the regulatory requirements.

The most common reason for giving up on resolving regulatory difficulties was "the belief that the resolution process is complicated and would take a long time," cited by 50% of respondents. This was followed by "the belief that the regulation is unlikely to be resolved" (34.6%), and "because it is not a matter that significantly impacts the business" (11.5%).

Among the companies that said they were making efforts to resolve regulatory issues, the most frequently consulted institution was local governments. Institutions approached for regulatory or difficulty resolution included local governments (38.8%), public institutions (24.4%), the National Petition Portal (9.6%), and central government ministries (8.0%). Only 2.2% turned to the SME Ombudsman.

Companies that chose local governments and public institutions as their resolution channels cited "accessibility and convenience" as their main reasons. In contrast, those who approached central government ministries or the SME Ombudsman tended to value "the likelihood of resolution" more highly. However, only 3.8% of respondents said they were aware of the SME Ombudsman system, and the most frequently cited factor needed to vitalize the Ombudsman system was "strengthening promotion of the system" (64.8%).

Ultimately, while the Ombudsman enjoys high trust in terms of expertise and the likelihood of resolving regulatory challenges, companies tend to seek resolution through other institutions due to factors such as low awareness and accessibility. In response to these findings, the Ombudsman plans to focus on improving the accessibility and convenience of submitting regulatory grievances. In particular, they are considering and promoting the establishment of a linkage system with local governments, which are the institutions most frequently sought by companies.

Choi Seungjae, the Ombudsman, stated, "We receive high marks for expertise and reliability in the area of regulatory difficulties, but awareness and accessibility are still lacking. This year, we will work to ensure that companies experiencing regulatory challenges can more easily think of and approach the Ombudsman."