Press R elease www.mss.go.kr
∙ Inquiries : Assistant Deputy Director Jang Han-hee, Spokesperson’s Office (042-481-4598)
Ministry of SMEs and Startups’ Digitalization Policies Receive Praise from the OECD
- The MSS hosts a webinar titled “Enhancing SMEs’ Resilience through Digitalization: The Case of Korea” (June 30, 2021) -
□ OECD selects Korea to research as an excellent example of a country overcoming the COVID-19 pandemic with digitalization
□ Korea to become the subject of OECD’s first case study on digitalization policies; the MSS receives praises on its various policies for the digitalization of SMEs
The Ministry of SMEs and Startups (Minister Kwon Chil-seung, hereafter referred to as “MSS”) reported that it hosted an online seminar on Wednesday, June 30, 2021, with the OECD (Secretary-General Mathias Cormann) about the MSS’s presentation titled “Enhancing SMEs’
Resilience through Digitalization: The Case of Korea*.”
* Title of the OECD Report: “Enhancing SMEs’ Resilience through Digitalization: The Case of Korea”
The participants at the opening ceremony of the webinar (Korea – Paris)
included Vice Minister of SMEs and Startups Kang Sung-cheon, OECD Deputy Secretary-General Ulrik Knudsen, and Permanent Representative of Korea to the OECD Ko Hyoung-kwon.
< Event Overview >
▪Date & Time : Wednesday, June 30, 2021, 16:00 – 17:15 (Paris: 09:00 – 10:15), online meeting
▪Participants : (Korea) Vice Minister of SMEs and Startups Kang Sung-cheon, Permanent Representative of Korea to the OECD Ko Hyoung-kwon, Director General for International Cooperation at the MSS, KOSI Senior Researcher Kang Jae-won, etc.
(OECD) Deputy Secretary-General Ulrik Knudsen, Acting Head of the SME and Entrepreneurship Division at the OECD Centre for Entrepreneurship, SMEs, Regions and Cities Lucia Cusmano, Senior Economist – Measurement and Analysis of the Digital Economy at OECD Vincenzo Spiezia, Senior Economist of the WIK in Germany and Project Manager for the German Federal Ministry for Economic Affairs and Energy Christian Märkel
▪Main Agenda : Opening Ceremony, Presentations (�Introduction to the Major Digitalization Policies at the MSS, �Presentation on the OECD Report), Discussions, etc.
As the entire world is facing difficulties due to the COVID-19 pandemic, the OECD showed great interest in the MSS's policies with a goal of
“Digital Transformation, Smart Korea” that swiftly supported SMEs and small businesses to adapt to the new online environment to continue their economic activities without obstacles.
The OECD report classified the MSS’s digitalization policies into
“structural policies” that were newly implemented in response to COVID-19, and “sectoral policies” as existing digitalization policies for the manufacturing industry and small business owners.
First, “structural policies” included the 2020 Online Service Vouchers, public online meeting rooms, online platform for small business owners
“Buy Value, Live together”, online trade fairs, and the comprehensive service portal for SMEs “SMEs 24(www.smes.go.kr).”
In addition, the presentation included the example of Samsung Electronics which participated in the Inclusive Company Program to overcome the COVID-19 pandemic by providing support for win-win smart factories for SMEs to manufacture test kits, masks, and vaccine syringes.
“Sectoral policies” included building 30,000 smart factories, and optimizing and expanding the use of the data from the smart factories with an AI-based manufacturing platform.
The report also included examples of Zero Pay, a digital payment system for small business owners, online education platforms for small businesses and smart technology distribution.
Despite the excellent digital infrastructure in Korea, the OECD observed and pointed out the following. SMEs did not actively use cloud computing services or engage in e-commerce, only a few companies were able to work from home, and there was a great digital divide among generations before the pandemic.
However, the OECD praised the Korean government for its support for digitalization upon the outbreak of COVID-19 to not only successfully ensure the resilience of SMEs but also solve challenging issues of digitalization.
Vice Minister Kang Sung-cheon of the MSS said, “The ministry will solve the inherent issues of SMEs based on the country’s digital infrastructure and innovative technology, and continue to make efforts to reduce the digital divide among generations.”
He added, “We will spare no effort to share our experiences with digitalization for SMEs and small business owners with the OECD and the world and contribute to the distribution of smart technology.”
Reference 1
Reference 1 Overview of the OECD Report on the Digitalization of SMEs in Korea
1. Background
1.1. Digitalization of SMEs has been receiving the political attention of many countries as one of the most effective ways to respond to the rapid transition to a digital economy since COVID-19
1.2. In particular, the OECD has organized various discussions on reducing the digital divide between large companies and SMEs, and policies to move to a digital economy
* Launched a committee for the digitalization of SMEs in November 2019 with the
“D4SME Roundtable”
1.3. Korea’s MSS has implemented various digitalization policies since 2020 with a goal of “Digital Transformation, Smart Korea”
* Innovation to smart manufacturing, support for online exports, fostering online and digital start-ups, digitalization for small business owners
1.4. As the first cooperative project of OECD since its inception, the department will share its digitalization policies to become a global leader in policies related to the digitalization of SMEs
2. Timeline
2.1. Discussion on the research scope and timeline with the OECD Centre for Entrepreneurship, SMEs, Regions and Cities* (Dec. 2020) * Centre for Entrepreneurship, SMEs, Regions and Cities at OECD (CFE)
2.2. Reply to the OECD CFE survey (Mar. 11)
2.3. Online interview with the MSS (Apr. 29 – 30)
2.4. Draft review and suggestions for editing (June 9)
2.5. Webinar for final presentation (June 30)
3. Report Summary
3.1. Policies introduced by comparing before and after COVID-19, classified into structural policies and department policies
Classification Structural Policies Department Policies Policies
implemented after COVID-19
Removing the barrier to digitalization for SMEs
Support digital exports of SMEs Reinforce cybersecurity of SMEs Digitalization of administrative work
Expansions of existing policies
Work-from-home system of SMEs Win-win partnerships between large companies and SMEs
Establish an institutional foundation for rapid digitalization
Innovation on smart manufacturing Support for the digitalization of small business owners
Reference 2
Reference 2 Overview of the Online Platform for Small Business Owners “Buy Value, Live together”
□ Introduction of Buy Value, Live together
◦ (Introduction) A public platform where small business owners can upload their products in the form of video or the like to be sole online (Dec. 2019 – Ongoing)
* (Website) (PC) v.Buy Value, Live together.com / (Mobile) mv.Buy Value, Live together.com
◦ (Host) Small Business Distribution Center
◦ (Commission) Approx. 3% (Average commission of private platforms: 15%)
□ Number of Stores and Members (As of June 25, 2021)
◦ (Participating Stores) 2,428 small business owners with 14,830 products
* Five product categories: Food, Living, Beauty, Fashion, Other
◦ (Number of Members) 64,470
□ Major Benefits
◦ (Advertisements and Events) Paid advertisements*, media promotion, support for specially priced products
* Provides support for paid advertisements on online portal sites (i.e. Naver, Google) or social media platforms (e.g., Facebook, Instagram, etc.)
◦ (Promotion) Participation in promotion events (i.e. Traditional Market Promotion, promotions for excellent SME products including Brand K), and other discount coupons
◦ (Other) Provides the opportunity to experience and an education on sales in online distribution channels such as Live Commerce, shares
Reference 3
Reference 3 Overview of the Inclusive Company Program
□ Background of the Inclusive Company Program
◦ Demand for a new win-win model with the Fourth Industrial Revolution and the need to overcome the limitations of the existing win-win system focused on large companies, SMEs, and partner companies
◦ Spread of the voluntary win-win culture* among not only partner companies but also SMEs without partnerships and implement the Inclusive Company Program** with a goal of developing sustainable win-win relationships
* Win-win strategies based on voluntary cooperation to expand the market as a whole ** Inclusive Company Programs allow large companies to share their strengths and
expertise with not only their partner companies but also SMEs without partnerships
□ Best Practice Examples of Win-Win Partnerships
Naver
▪ (Partner Square) Provides space, education, and consultations for small business owners to enter the e-commerce market, Happy Play Kids (toy manufacturer) improved its daily sales from 1 million won
→ 16 million won with Naver Live Commerce
▪ (Grocery Shopping from Home) New online mall on the Naver website that provides groceries within 2 hours from the local supermarket (237 traditional markets, 1,367 stores)
Samsung Electronics
▪ (Support for mask manufacturers) Provided support for smart factories of four mask manufacturers including Hwajin Korea to increase daily production by 51% (920K→1.39M units)
▪ (Support for diagnostic kit manufacturers) Provided materials to improve manufacturing processes and maintenance of smart factory systems to SolGent to increase weekly production by 73% (11,900→
20,571 kits), and reduce logistics route by 34% (148m→98m)
Fresheasy
▪ Fresheasy, selected as the first start-up company to participate in the Inclusive Growth Program to contribute to the digitalization of traditional market owners, developed the Long-Lasting Small Business HMR products (Spicy stir-fried octopus and octopus hot pot of Ewha Seafood, chili shrimp of Jidonggwan, and octopus and pork intestine hot pot of Jangheunghoegwan) to be sold online and in stores
Company No. Date Concept of MOU
Naver 1 May 13, 2019 Improve independence of small business owners by supporting them to enter the e-commerce market
Posco 2 May 21, 2019 Support the investment for start-ups with a strategic venture fund of 1 trillion won
Shinhan Financial Group 3 June 24, 2019 Foster new industries by increasing investment in start-ups Kookmin Bank 4 Aug. 1, 2019 Support the competitiveness of foodservice companies by
launching specialized and customized products, etc.
Woori Bank 5 Aug. 20, 2019 Support the competitiveness of women entrepreneurs by launching specialized and customized products, etc.
SoftBank Ventures 6 Sept. 26, 2019
Encourage start-ups in the AI industry and investments in scale-up
Samsung Electronics 7 Oct. 11, 2019 Support the advances in smart factories with equipment, etc.
Hana Bank 8 Nov. 14, 2019
Establish a support system for the technology for the material, component, and equipment industry and provide support for INNOBIZ companies
Korea National Railway 9 Nov. 21, 2019 Support the balance between work and family life and encourage start-ups for women
Hyundai /Kia Motor Group 10 Dec. 18, 2019 Support the transition of automobile parts from internal combustion engines to next-generation automobiles
Korea Aerospace Industries 11 Feb. 3, 2020 Foster aviation part manufacturing SMEs to secure advanced technology within the aerospace industry
Arm 12 Apr. 22, 2020 Innovative growth for system semiconductor start-ups
Starbucks 13 May 7, 2020 Encourage youth start-ups
SKC 14 May 13, 2020 Establish a win-win ecosystem based on process and
technology trade and open innovation
LG International 15 July 22, 2020 Encourage the entry of SMEs and start-ups into the foreign market by introducing them to the on-site networks
Industrial Bank of Korea 16 Aug. 5, 2020 Secure excellent talents for SMEs and resolve the issue of youth unemployment
KT 17 Sept. 22,
2020 Spread the online culture focused on 5G Seoul Guarantee Insurance 18 Sept. 28,
2020
Support the economy based on the Digital New Deal and innovative growth
Fresheasy 19 Oct. 20, 2020 Support digitalization for small business owners of the Long-Lasting Small Business
K-water 20 Nov. 4, 2020 Foster unicorn companies that will become a leader in the Green New Deal
Visa, Shopify 21 Nov. 11, 2020 Support online exports of Korean small business owners and SMEs
Korea Land & Housing
Corporation 22 Nov. 24, 2020
Innovation procurement in the construction field and support the comeback of start-up companies and small businesses
□ Results : Total of 31 MOUs (2019) 1 – 10, (2020) 11 – 25, (2021) 26 – 31
CJ E&M 23 Dec. 2, 2020 Increase domestic and international sales routes for SMEs and small business owners
Kurly 24 Dec. 9, 2020 Increase online sales routes for regional-based and Brand-K products
E-Mart 25 Dec. 16, 2020 Provide support for sales routes and innovative capabilities for small business owners
Woowa Brothers 26 Jan. 18, 2021 Realize the protocol economy with win-win partnerships
SK E&S 27 Apr. 22, 2021 Realize the oxygen economy and carbon neutrality to spread ESG and solve regional issues
Bodyfriend 28 Apr. 27, 2021 Support comeback with companies that have made successful comebacks
Hanwha Systems 29 May 12, 2021
Foster promising small- and medium-sized start-up companies with core technology in the radiation industry
SK ecoplant 30 June 3, 2021 Foster eco-friendly and green innovative companies with the open win-win platform
NHN Commerce 31 June 17, 2021 Overcome COVID-19 for SMEs and small business owners by entering the e-commerce market
