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Current Status and Future Challenges of the Micro-Enterprise Policy

Author Hong Seokil, Ji Minwoong, Shin Jongwon, Han Changyong Date 2016.12.28 Page
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Since the introduction of Korea’s micro-enterprise policy 18 years ago, support systems for micro-enterprises have been established, many more support programs have been put in place, and significant amounts of investment have been made every year. Nonetheless, little systematic analysis has been done of the current status of the micro-enterprise policy. As policies for micro-enterprises are led primarily by the Small and Medium Business Administration (SMBA), it is important to approach such analysis from the perspective of small and medium enterprises (SMEs). Given that policies for micro-enterprises have diverse policy aspects, it is necessary to increase the consistency and effectiveness of the micro-enterprise policy based on comprehensive analyses.  

 

Against this backdrop, this study analyzes the stages of development that the micro-enterprise policy in Korea have undergone since the introduction of the policy in 1999 and reviews the background of policy discussions and the direction of major policies. To gain a better understanding of the current status of Korea’s micro-enterprise policy, this study adopts diverse perspectives in examining relevant policies for SMEs, employment and the social safety net, consumers, and local economies. Finally, this study looks at the consistency of these four aspects and identifies policy issues that need to be addressed. 

 

This study also examines recent cases and trends of micro-enterprise policies in major economies around the world, employing an analytic framework similar to that used in the analyses of the phased development and current status of small business policies in Korea. Based on the results of these analyses, this study suggests relevant policy directions and specific improvements that can be made, aiming to ensure that micro-enterprise polices implemented in the future achieve better results.  

 

To carry out this study, a comprehensive review of the existing literature, both domestic and foreign, and a survey of micro-enterprises were conducted. For the survey of micro-enterprises, a population was established, composed of ordinary Koreans, including micro entrepreneurs, and stratified by gender, age, geography, and whether the participants were economically active and small business owners. From this stratified population, a sample was taken to carry out the survey, which spanned a period of about one month, from October 24 to November 25 of 2016, with a total of 2,564 participants responding. The participants were comprised of 2,164 non-micro entrepreneurs (84.4 percent) and 400 micro entrepreneurs (15.6 percent), and the sampling error of the survey results was ±1.94 percent with a confidence level of 95 percent. To complement the survey, interviews with individual micro entrepreneurs were conducted, and consultations with outside experts and officials responsible for micro-enterprise policies at relevant organizations were actively utilized. In addition, relevant materials were collected and analyzed in order to conduct a case study on the current status of micro-enterprise policies in foreign countries, and qualitative and quantitative approaches were combined in analyzing the results and identifying future policy tasks.