"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 difficulties while operating their businesses. However, only 37% of these companies reported making efforts to resolve such regulatory issues.

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

According to the survey results, 45% of SMEs reported experiencing regulatory difficulties. The areas most affected were financial regulations (21.4%), employment and labor regulations (18.6%), and safety-related regulations (15%), in that order. Among those who experienced regulatory difficulties, only 37% said they were actively working to resolve them. Most companies responded that, rather than seeking solutions, they tend to scale down, modify, or even abandon their business to comply with the level of regulation.

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

Among the companies that said they were making efforts to resolve regulatory difficulties, the most frequently sought institution was the local government. The institutions approached for resolving regulatory or business difficulties were 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 solution partners cited "accessibility and convenience" as the main reasons. In contrast, those who approached central government ministries and the SME Ombudsman tended to value the "possibility of resolution" more highly. When asked about what is needed to vitalize the ombudsman system, the most common response was "strengthening promotion of the system" (64.8%).

Ultimately, while the ombudsman is highly trusted for its expertise and ability to resolve regulatory issues, companies tend to seek solutions through other institutions due to factors such as low awareness and limited accessibility. In response to these survey results, the ombudsman plans to focus on improving the accessibility and convenience of submitting regulatory difficulties. In particular, they are considering and promoting the establishment of a linkage system with local governments, which are the institutions most frequently approached by companies.

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