SMEs ministry trims 4 trillion won from redundant programs to fund new growth sectors

The SMEs ministry said Thursday it will cut 4 trillion won from inefficient small business support programs and reinvest the savings into 300 high-potential companies in emerging industries.

Officials identified 232 out of 472 current projects across 17 government agencies as targets for consolidation or reduction. The restructuring will merge 88 redundant programs and reduce budgets for 144 others. The cuts address long-standing criticism that the country's 31 trillion won support network had become fragmented, with President Lee Jae-myung previously comparing the tangled web of subsidies to "unkempt hair" that needed combing.

Starting next year, the reclaimed funds will back 300 innovative firms annually in national security, pharmaceuticals, climate technology and K-consumer goods. Selected companies will receive bundled support covering research, financing, exports and workforce development totaling more than 10 billion won per firm over a maximum of five years. Support will be delivered in two phases: an initial two-year period followed by a three-year extension contingent on meeting performance milestones. To finance the approach, the government has allocated 239 billion won in its 2027 budget proposal.

The ministry will also expand its Jump-Up program for promising startups, increasing its budget from 59.5 billion won this year to 164 billion won in 2027.

Noh Yong-seok, first vice minister at the SMEs ministry, said the changes are designed to ensure tax money reaches areas where it is most needed. "We will transform the policy paradigm for small businesses in new growth fields to create tangible results that lead the global market," he said.