The Ministry of SMEs and Startups is pushing to strengthen a basic social security framework for small business owners. Prime Minister Han Sung-sook (fourth from right), who previously served as minister of SMEs and Startups, poses for a photo with participants following a meeting on childbirth and childcare support for women and young small business owners in May. [Ministry of SMEs and Startups]
The Ministry of SMEs and Startups is pushing to strengthen a basic social security framework for small business owners. Prime Minister Han Sung-sook (fourth from right), who previously served as minister of SMEs and Startups, poses for a photo with participants following a meeting on childbirth and childcare support for women and young small business owners in May. [Ministry of SMEs and Startups]

SMEs Ministry briefs president on 'basic social security framework' for small businesses

New 'health care allowance' to offset lost income during medical checkups

3,000 'national champion' SMEs to receive sustained support across 5 growth sectors

4.2 trillion won freed from redundant programs; regional firms to get differentiated aid

The government plans to provide childcare support payments to solo small business owners and is reviewing a new "health care allowance" to compensate those who close temporarily for medical checkups. The measures aim to extend the social safety net — long designed around salaried workers and businesses with employees — to the self-employed. Funding will come from consolidating programs currently scattered across central government ministries and local governments. To ensure meaningful policy coordination, the government will elevate the SME Policy Deliberation Council to a meeting chaired by the deputy prime minister for economic affairs.

The Ministry of SMEs and Startups announced Tuesday, in a presidential briefing, that it would finalize a plan in the second half of this year to institutionalize a basic social security framework for small business owners. The framework will be built around the principles of sustainability, preventive protection and shared social responsibility, and will cover childcare, health, unemployment, industrial accidents and financial support.

The most notable measure is a childcare support payment for solo operators — those who run their businesses without any employees. When such owners stop working to care for a child, their income can disappear immediately, and unlike salaried workers, they have no access to parental leave. The ministry said the payments are intended to prevent income disruption during child-rearing and the business closures that can follow.

The ministry is also reviewing a health care allowance to offset lost revenue when small business owners take time off for medical checkups, recognizing that the self-employed lose income the moment they close their doors. A Yonsei University School of Medicine survey found that the medical checkup rate among the self-employed stood at 30.8 percent in 2023 — roughly one-third the 89.3 percent rate recorded for salaried workers.

Protections for small business owners who close down or suffer workplace injuries will also be strengthened. Starting in 2027, the ministry will expand subsidies for self-employed unemployment insurance premiums and introduce measures to encourage small business owners to enroll in industrial accident insurance. Under the self-employed unemployment insurance scheme, those who have been paying premiums and are forced to shut down can, after meeting certain conditions, receive job-seeking benefits and vocational training support.

Increasing the number of small business owners enrolled in employment and industrial accident insurance is a medium- to long-term goal. The ministry set a target of raising the number of enrolled small business owners from the current roughly 110,000 to 200,000 by 2030.

3,000 'national champion' SMEs selected for sustained support

The ministry also plans to designate 3,000 companies — roughly the top 1 percent of the 390,000 small and mid-sized enterprises in the country — as candidates for its national champion growth program. Eligible firms will be grouped into categories: promising small enterprises, companies that have graduated from startup support programs, mid-sized firms with demonstrated growth potential, and candidates for mid-tier company status.

Three tiered programs — Jump-Up 100, Jump-Up 500 and Jump-Up 1000 — will be newly created or expanded to match each stage of corporate growth. Jump-Up 100 focuses on building a growth foundation for promising small firms and startup program graduates. Jump-Up 500 helps growth-proven mid-sized companies enter new businesses and markets, while Jump-Up 1000 supports global expansion for companies on the cusp of mid-tier status.

Selected companies will receive three years of expert mentoring, open vouchers, networking opportunities, and linked loan and guarantee support. Open voucher support is capped at 750 million won ($525,000) per company. Support will be tailored to each firm's circumstances, combining research and development, investment, export and workforce assistance as needed.

Five new growth sectors — pharma-biotech, climate tech, manufacturing AI and more — to receive focused support

The ministry will also concentrate resources on five new growth sectors: new security, pharmaceutical biotech, climate tech, K-consumer goods and manufacturing AI. It plans to select 400 companies per year from these fields and provide up to 40 billion won per company over a maximum of five years.

Support tools will include technology commercialization, research and development, guarantees, loans, export assistance, research personnel and venture investment. The duration and scale of support will be determined by each company's proposed growth path and whether it meets milestone targets at each stage — a structure that ties continued support to verified growth rather than distributing funds on a fixed schedule.

In the new security sector, the ministry will pursue designation of innovative companies, a fast-track procurement system, and expanded defense and public-sector research and development and demonstration projects. For pharmaceutical biotech, it will link research, development and commercialization support with a biotech fund and open innovation partnerships with both domestic and global pharmaceutical companies.

Climate tech firms will receive technology demonstration testbeds, innovation-focused research and development support, and a dedicated fund. In the K-consumer goods sector, the ministry will support overseas expansion and product development for beauty, fashion and food companies. For manufacturing AI, it will advance smart manufacturing research and development, AI agent development and physical AI demonstration projects.

The ministry set a target of nurturing 1,600 new-growth innovative companies by 2030 and increasing the number of deep tech unicorns from the current 28 to 50. Over the same period, venture investment is projected to grow from 13.6 trillion won in 2025 to 40 trillion won, while SME exports are targeted to rise from $120 billion to $150 billion.

Redundant program budgets restructured to free up 4.2 trillion won

Funding for the new growth support framework will come from restructuring existing SME support programs. The ministry aims to cut 4.2 trillion won — 16 percent — from the combined SME support budgets of the ministry and 16 other government agencies. Targets for restructuring include overlapping and duplicative programs, small-scale and fragmented initiatives, and programs with poor execution records or those continued out of habit. The presidential briefing outlined plans to consolidate multiple pre-startup programs under a single initiative called "Everyone's Startup," saving 76.4 billion won, and to cut budgets for poorly executed programs by up to 50 percent.

The savings will be redirected into Everyone's Startup, the five new growth sectors, the AI transformation of manufacturing, the small business social safety net, and regional enterprise support. A system to assess companies' growth potential and prospects will be introduced into the SME support program selection process. After a pilot this year, it will be applied to 35 of the ministry's programs in 2027 and extended to other ministries' programs from 2028 onward.

Differentiated support for regional companies will also be strengthened. The ministry plans to set targets for support outside the Greater Seoul area and develop a system that adjusts the ratio of central government funding based on distance from the capital and regional characteristics. Local governments at the municipal level that create or modify SME support programs will also be required to consult with the ministry in advance.


hong@heraldcorp.com