Overview

In the process of Korea's rapid and successful economic development, small and medium-sized enterprises (SMEs) have played a major role. This is the result of both specific stipulations in the Constitution, and due to various SME promotion and support policies that have been successfully implemented. But against a backdrop of government-led economic policies that have traditionally prioritized large conglomerate (chaebol) growth, Korean SME policies may be considered relatively lacking, especially when considering the earlier stages of Korea's economic development.

For much of the last few decades, Korean SME policies had been focused on protection policies or on policies in which SMEs played a supplemental role to large conglomerates. More recently, the Korean government has succeeded in amending its policies in response to internal and external changes in national economic circumstances. It has been moving towards reorganizing its legal system to promote and support SMEs so that the economic roles and competitiveness of small firms can be strengthened.

The significance and value of SMEs can vary in different ways, depending on the stage of economic development of the nation involved. SMEs can be considered to have major significance for a rapidly developing country, since promoting them may help build an industrial base, expand employment opportunities, balance development in different regions of the country, and establish a stable social infrastructure.