Minister Park Young-sun of Ministry of SMEs and Startups (MSS). (Photos: MSS)

The Ministry of SMEs and Startups (MSS) is striving to establish an ecosystem in which unicorn companies can be created through the K-unicorn Project to bring about a vigorous and innovative national economy.

“In particular, the groundwork will be laid for unicorn businesses in diverse areas such as the Big Three industries — system semiconductor, life science and future car,” MSS Minister Park Young-sun said.

“The materials, parts and equipment sectors will also be included in the ambitious plan of nurturing 20 unicorn companies by 2022.” The following are excerpts of an interview in which MSS Minister Park Young-sun spoke of her policies such as the “K-Unicorn” and “Inclusive Company” projects.

Minister Park Young-sun of the Ministry of SMEs and Startups (MSS) speaks about the nurturing of unicorn company candidates during a session of the “K-Unicorn Project in Seoul on Aug. 10.

Question: The “New Hope Fund for Small Business Merchants” has been extended at an unprecedented pace in an efficient fashion. Would you speak about the background of the swift provision of the fund and the current status of fund extended?

Answer: First of all, the MSS has been offering 3.3 trillion won in the New Hope Fund for Small businesses since Sept. 24 to help them cope with declining sales and management hardships caused by the spread of the COVID-19 pandemic and social distancing guidelines. The money was raised through the 4th supplementary budget.

The fund had been extended to 1.84 million people until the traditional Chusoek holiday. About 2.45 trillion won has been offered to 2.23 million small businesses and self-employed as of Nov. 5, accounting for 74 percent of 3.3 trillion won allocated.

Ninety-nine percent of applicants on the fast-track payment list have benefited from the fund. The measure was owed to the MSS, which collaborated with ministries, using data, possessed by the National Tax Service (NTS) and the National Health Insurance Service (NHIS).

President Moon Jae-in lauded the fund for its exemplary administrative practice of offering public services swiftly and in a convenient fashion by proactively capitalizing on public data.

As both online and off-line applications have been accepted since Oct. 26, small businesses, who find it hard to submit online applications, are now allowed to apply for the fund at 2,839 application sites, including residents’ centers at eup, myeon and dong across the nation.

Each small business merchant, who had reported the closure of their businesses due to the resurgence of the COVID-19 pandemic, have been offered 500,000 won in an “allowance to encourage rechallenging of closed shops.”

Q: The “K-Unicorn Project,” implemented by the MSS, aims to pave the way for another Samsung Electronics. Would you elaborate on the expected outcomes of the project and detailed plan?

A: Unicorn companies refer to unlisted firms whose corporate value stands at more than 1 trillion won, which are high-growth, innovative and create many jobs. Yanolja Co. has maintained rapid growth since its establishment in 2007.

The company saw sales jump from 167.8 billion won in 2018 to 300 billion won in 2019 and the number of employees rose from 528 in 2019 Q1 to 814 in 2020 Q1, a surge of 286 employees despite the COVID-19 pandemic.

Despite the pandemic, venture companies saw new jobs surge 27,000 in 2020 H1 compared to over a year ago.

They employ a combined 668,000 workers, equivalent to the number of employees at the top four conglomerates as of May, showing a tendency of shifting job creation from large company-oriented paradigm to one based on startups.

Innovative venture companies and startups, playing a key part of the so-called “K-quarantine,” has served as an opportunity to turn a crisis into an opportunity.

Online exports of SMEs in the first half of the year increased by 126% compared to the same period last year. SMEs, which saw brisk exports such as promising consumer goods and non-contact items, have served as a buttress to shore up exports.

The government strives to build an ecosystem in which unicorn companies can be created through the K-unicorn Project to bring about a vigorous and innovative national economy.

In particular, the groundwork will be laid for unicorn businesses in diverse areas such as the Big Three industries — system semiconductor, life science and future cars.

The materials, parts and equipment sectors will also be included in the ambitious plan of nurturing 20 unicorn companies by 2022.

On top of the project, the ministry plans to raise 6 trillion in the tentatively named “Smart Korea Fund” to invest in promising areas, such as non-contact and bio sectors.

The Act of Venture Investments, whose relaxed restrictions went into force in August and the Special Act on Ventures will introduce a private-sector oriented venture confirmation system next February.

The ministry will make strenuous efforts for legal and institutional overhaul such as multiple voting rights for unlisted venture companies.

Minister Park Young-sun of the Ministry of SMEs and Startups attends an on-line ceremony to inaugurate the organization committee for 2020 COMEUP Hanwha Dream Plus Gangnam in Seoul on May 20.

A: COMEUP 2020 is a global networking event of innovative ventures and startups, boasting the nation’s top standing companies in terms of prestige and size.

Starting with Venture Korea, a small event in 1997, COMEUP, which launched the brand “COMEUP” for global startups event in 2019, has grown into Asia’s top startup conference.

Major foreign startup events such as SLUSH had been cancelled or scaled back due to the spread of the COVID-19 pandemic. COMEUP 2020 has been prepared in online and non-contact formats based on Korea’s successful “K-quarantine” steps against COVID-19.

COMEUP 2020 will take place from Nov. 19 through Nov. 21 under the theme “Meet The Future — Post Pandemic.” A selection of 120 Korean and foreign innovative firms, representing the COUMEUP community, will be given their PR videos, online booths, and investment & export consultation sessions.

COMEUP 2020 is expected to serve as an opportunity to cooperate on a new economic order and creation of new business models through active communication and exchanges among innovative venture firms and startups from around the word.

Q: Would you introduce the “brand K,” a joint, representative brand for SMEs and startups and your ministry’s support?

A: The brand K is a joint brand launched in September 2019 to help SMEs, ventures and startups, which have high-quality products, but find it hard to export them due to a lack of brand power.

The launch of the brand came after President Moon made a visit to Thailand. A combined 120 products have earned the designation of the brand since 2019. The ministry plans to increase the number to 300 by 2022.

The brand K products are offered diverse benefits such as export vouchers, policy funds and support for marketing activities.

The joint brand project has paid off with tangible outcomes: rising sales and exports.

The ministry plans to ramp up support with publicity and marketing so the value of brand K’s products can be recognized as a quality brand on the global market.

A: The ministry came up with a plan on digital transformation of small businesses to raise their competitiveness fundamentally in a preemptive step to cope with their non-contact and digital transformation trends on Sept. 17.

Successful practices will be explored through digitalization of small business merchants’ operation sites such as traditional markets, shops, workshops, and district shops, and innovative models will be expanded gradually.

The ministry aims to digitalize 500 traditional markets, 100,000 shops and 10,000 workshops by 2025. A cluster of digitalized traditional markets, shops and workshops will be created in three locations.

The ministry plans to ram up a function of a “Live Together” platform to provide support to small business merchants’ on-line marketing and boost the use of on-line channels like “live commerce.”

The ministry plans to build a digital ecosystem tailored to meet small business merchants’ needs through digital education and the spreading of shared growth.

To this end, on-the-job education will be offered to 50,000 people with digital vulnerability by 2025, while digital education and experience sites will be expanded from one to eight.

Collaboration profit-sharing models will be explored among small businesses with on-line platforms, while they will be supported with the raising of a 40 billion shared growth fund and the inauguration of a delivery platform consultative committee.

The ministry plans to expand support infrastructure such as big data platforms assisting small businesses digital utilization.

A big data platform will be set up in 2021 to promote small business merchants’ data-based management innovation while diverse services will be provided to small businesses with the private sector’s role-sharing in 2022.

The ministry will allocate 300 billion won in policy funds to digitalize small businesses workshops, 100 billion won in a fund for purchasing smart equipment and 200 billion won in guarantees related to propriety smart technology firms.

Departments responsible for supporting digital transformation will be inaugurated in the ministry and SEMAS, and a related act will be revised to promote the stable operation of policies.

The ministry plans to offer comprehensive support to grow mom-and-pop shops into global small businesses by easing digital divide of small businesses, a pillar of the low-income bracket.

It plans to aggressively nurture the manufacturing data industry to raise SMEs’ productivity to the levels of large-sized companies.

First, the ministry plans to provide support to SMEs’ introducing smart factories, with the goal of building 30,000 smart factories by 2022.

The Korea AI Manufacturing Platform (KAMP) is a platform where manufacturing data, collected from smart factories across the nation, are examined using big data analytics methods before answers are returned to SMEs to boost productivity.

Last year, the German government proposed a plan to make a data platform a global standard. As an initial part of the proposal, an agreement will be signed with Lab Network Industries (LNI) 4.0 on collaboration in early December.

Unlike the United States, with the private sector-initiated system, Germany has a similar regime to Korea’s, which is based on collaboration between the private and public sectors, facilitating cooperation between both countries.

Q: Would you tell our readers about the outcomes of a “regulation-free zone,” which made its debut one year ago?

A: A regulation-free zone was introduced in April 2019 to create new technologies and business at a district level for innovative growth and balanced development.

The step is designed to relax a package of a lump of regulations related to new industries districts companies experience.

Starting with the designation of a first special regulation-free zone in July 2019, 21 similar zones have been designated over 14 local governments other than the Seoul metropolitan area.

In the latest move, three more special regulation-free zones have been added, and verification business have been added to an existing one.

As new technologies have been developed sans restrictions in the special regulation-free zones and new business entry opportunities are offered, investment attraction and quality job creation are expected to boost, thus greatly contributing to the regional economy.

The regulation-free zone system has produced tangible outcomes at an early stage such as attracting investments, establishing plants and relocating companies in a short period of time.

For instance, GS E&C invested 100 billion won in the Gyeongsangbuk-do next-generation battery recycling special zone, while five EV companies poured 64.3 billion won in investments into the Jeollanam-do e-mobility special zone.

Investments worth a combined 316.9 billion won have been attracted so far and 100 companies have been relocated to the special zones.

The ministry plans to designate more special zones to meet districts’ demand down the road and take follow-up steps, such as budgetary support and tax benefits and related fund raising to bear fruits.

Q: Would you introduce the “Inclusive Company Project,” designed to promote shared growth between large- and small-sized companies, which was launched under your first policy initiative since you took office?

Starting with Naver’s collaboration with the Korea Federation of Micro Enterprises in May 2019, 20 large-sized companies have joined forces in the project.

Inclusive large companies have put into practice voluntary shared growth in areas such as support for smart factory upgrade and support for small business merchants’ on-line entry and venture investments into new industries.

The project has begun to pay off: Building a virtuous cycle of promoting shared growth and win-win cooperation on a voluntary basis.

As additional inclusive large companies’ participation in the project are under discussions, the ministry is redoubling efforts to create a shared growth environment among large- and small-sized companies by exploring more inclusive companies.

As non-contact and digital demand is on the rise in the wake of the COVID-19 pandemic, an increasing number of companies are trying to collaborate with startups to cope with rapid market changes, but their moves limited to in-house ventures and existing business ties.

The ministry is seeking to play a platform part of matching large-sized companies with venture companies for their optimal collaboration.

It hosted the “1st Digital Dream9” and “2nd AI Championship” under a pilot program, launched this year.