'Ministry of SMEs and Startups Affiliates Trembling': Empty Announcement Causes Only 'Confusion'

[Financial News] Although the government has embarked on functional reforms targeting agencies under and affiliated with the Ministry of SMEs and Startups, there are still significant challenges to overcome before actual integration and transfer can be completed. While the direction to reduce redundant functions and increase efficiency is clear, specific implementation plans are expected to determine the success or failure of the reform, as governance structures, functions, and wage systems vary among the agencies.
According to the government's "Plan for Promoting Functional Reform of Public Institutions" announced on the 6th, the Korea Small and Medium Venture Business Distribution Center (Korea SMEs and Startups Distribution Agency (HanYuwon)) and Public Home Shopping Co., Ltd. will be merged into an entity tentatively named the "SME Marketing Promotion Corporation." The plan envisions creating an integrated distribution platform where a single agency handles everything from discovering SME products to consulting, store entry, sales, and performance management.
While both organizations support the expansion of sales channels for small and medium-sized enterprises, HanYuwon places greater emphasis on executing policy projects, whereas Public Home Shopping Co., Ltd. focuses on operating sales channels. The government's purpose in this integration is to combine previously separate support functions to enhance connectivity between projects.
However, for the actual integration to proceed, the governance structure must first be sorted out. While HanYuwon holds a 50% stake in Public Home Shopping Co., Ltd., NongHyup Agribusiness Group Inc. holds 45% and the National Federation of Fisheries Cooperatives holds 5%. Accordingly, not only must it be determined which organization will be the surviving entity, but also the detailed method must be decided, such as whether to convert the shares of NongHyup Agribusiness Group Inc. and the National Federation of Fisheries Cooperatives into shares of the integrated entity or settle them in cash.
Compensation and the job classification system are also subject to adjustment. According to the public institution management information disclosure system 'ALIO,' the average compensation per person based on this year's budget is 78,888,000 won for Public Home Shopping Co., Ltd. and 70,128,000 won for HanYuwon, resulting in a difference of 8.76 million won. Along with the cost-saving effects of functional integration, it is also necessary to examine how personnel costs and organizational operating expenses will actually change.
Another task is the plan to transfer the Korea Small Business Institute (KOSBI) to the National Research Council of Economics, Humanities and Social Sciences under the Prime Minister's Office. The government intends to incorporate the research institute into a pan-government research system to enhance research connectivity between ministries. However, there are concerns that separating it from the Ministry of SMEs and Startups could weaken the expertise and policy linkage of research on SME and micro-enterprise policies. Conversely, there are expectations that the scope of research can be expanded through joint research with other state-funded research institutes.
The implementation process is also the key factor in the plan to integrate Kibo Mate, a subsidiary of the Korea Technology Finance Corporation (KOTEC), KOSME Partners, a subsidiary of the Korea SMEs and Startups Agency (KOSME), and HanYuwon Partners, a subsidiary of HanYuwon, into an entity tentatively named 'SME Venture Management Co., Ltd.'
The government plans to consolidate agency-specific duties—such as facility management, disaster prevention, electrical and mechanical equipment, and cleaning and sanitation—into one place to establish a dedicated safety management organization and a standardized inspection system. However, given that each company operates business sites in different regions like Busan, South Gyeongsang Province, and Seoul, detailed planning is required regarding how to allocate organizations and personnel after integration, as well as whether cost-saving management effects will actually materialize.
"An official from the SME sector stated, 'It is more important whether policy effectiveness and management efficiency actually improve after the merger than the merging of the agencies itself,' adding, 'How detailed issues such as equity stakes, wage systems, and workplace operations are resolved will be the key to future functional reform.'"


[email protected] Kim Hyun-chul Lee Ju-mi Reporter