[Gangnam Perspective] Much Work Remains and the Day Is Not Yet Over

There is a saying, 'Ilmodowon,' which means 'so much to do, so little time left.' This phrase originates from the story of Wu Zixu, a strategist from the State of Chu during China’s Spring and Autumn period, who helped turn the State of Wu into a major power.
A long-standing wish of the small business community has finally been realized with the appointment of a dedicated Vice Minister for Small Business. The new Vice Minister is Lee Byung-kwon. Although it took two months after the announcement to establish this position, it is fortunate that the role can now begin in earnest.
Currently, the situation for self-employed individuals and small business owners in Korea is deteriorating. While some analyses suggest that the domestic economy is showing signs of recovery after a prolonged slump, for many, this remains a distant reality.
Last year, the number of business closure filings, including both individuals and corporations, exceeded one million, starkly illustrating the dire circumstances. According to the Ministry of SMEs and Startups, the average annual revenue per small business dropped from 233 million KRW in 2022 to 199 million KRW in 2023. Operating profit also fell from 31 million KRW to 25 million KRW over the same period.
Outstanding loans for the self-employed soared from 858.4 trillion KRW in 2021 to a record 1,069.6 trillion KRW by the end of the second quarter this year. The delinquency rate among vulnerable borrowers rose from 5.40% in 2022 to 11.16% last year.
With fixed costs such as electricity and rent remaining high and little practical financial support available, many say it is increasingly difficult just to stay afloat. If a business closes, restarting is often not a realistic option, leading to a vicious cycle rather than a virtuous one for the self-employed and small business ecosystem. This is precisely the situation described by 'Ilmodowon.'
When the government established the Vice Minister for Small Business, it announced several key responsibilities: formulating small business policies; supporting and fostering entrepreneurship and market access; promoting cooperation, supporting closures and restarts; and stabilizing small business management. Each of these is essential for today’s small business owners.
However, expecting dramatic changes simply because a new vice ministerial position has been created may be naïve. Since structural problems persist, systemic changes must come first to resolve the current issues.
For example, temporary financial support cannot be a fundamental solution. There is an urgent need to establish a comprehensive safety net for the small business ecosystem. Small businesses play a crucial role in employment within Korea’s economy, yet they are also the most vulnerable to economic shocks. Building a systematic safety net, including strengthening management capabilities and supporting business recovery, is essential for a sustainable ecosystem. In this regard, the Cost Relief Credit Program operated by the MSS is a case in point, as it helps reduce fixed costs such as electricity, gas, and telecommunications.
Improving public perception of small business owners and the self-employed is also an important task. Whenever someone shares their struggles as a self-employed person online, a common comment is, 'Nukalhyeop'—meaning, 'Did anyone threaten you with a knife to do this?' While there are also many supportive comments, the prevailing social attitude is not always sympathetic. It is crucial to raise awareness of the vital role small businesses and the self-employed play in the economy and to emphasize that supporting them is essential for the national economy.
The role of Vice Minister Lee Byung-kwon, Korea’s first dedicated Vice Minister for Small Business, is therefore all the more significant. There are high expectations as he has been actively visiting the field and engaging in communication since his appointment. There is much work to be done for small businesses. I hope that, while there is still time, a sustainable ecosystem for small businesses can be established.
[email protected] Reporter