Han Seong-sook, the former Minister of the Ministry of SMEs and Startups, has moved to the position of Prime Minister earlier this month, prompting the Lee Jae-myung administration to accelerate the selection of a new minister for the ministry. The incoming minister will face significant responsibilities, including the urgent tasks of normalizing the 'Everyone's Startup' initiative and addressing the Homeplus crisis upon taking office.
According to government sources on July 7, if a ministerial candidate is nominated this month, the new minister is expected to be inaugurated by early August after undergoing a National Assembly confirmation hearing. This will conclude the two-month vacancy in the leadership of the Ministry of SMEs and Startups that followed Han's nomination as Prime Minister on June 7.
The new minister will be tasked with leading the Lee Jae-myung administration's policy shift from merely supporting small and medium-sized enterprises (SMEs) and startups to fostering growth and scaling up these businesses.
One of the most pressing issues is restoring trust and normalizing the 'Everyone's Startup' initiative, which is a flagship project of the Lee Jae-myung administration. Launched this year, the initiative attracted significant interest, with 62,944 applicants in its first round. However, the project faced setbacks when personal data of all 5,000 successful applicants was leaked, leading to a halt in its progress and a postponement of the second round of recruitment originally scheduled for this month.
The new minister will need to swiftly address the data breach while overhauling security systems to ensure the second round of the initiative can launch without further issues and to restore overall trust in the program.
The crisis surrounding Homeplus, which is effectively on the brink of bankruptcy, is also an urgent matter. Following a court decision to terminate the corporate rehabilitation process, Homeplus is facing increasing damage to its supply chain, affecting small suppliers and local businesses. Payment delays have persisted for several months, leaving some partner companies with millions of dollars in unpaid bills, prompting layoffs and even considerations of closure. Industry voices are calling for prompt payment of outstanding debts and liquidity support to prevent a chain of bankruptcies.
Additionally, the transition of manufacturing and local SMEs to artificial intelligence (AI) is a task that can no longer be delayed. As the use of AI becomes a key factor in determining business competitiveness, there is a growing demand for accelerated digital transformation among SMEs.
Addressing the 'K-shaped polarization' among businesses is another challenge the next minister will need to tackle. While large corporations, particularly in the semiconductor sector, continue to grow, many SMEs are struggling with declining profitability and employment due to high inflation, exchange rates, and interest rates. As disparities in growth widen within the SME sector, there are calls for tailored support systems that consider the growth stages and characteristics of different industries.
Kim Dae-jong, a professor at Sejong University, stated, "Our economy is currently undergoing a structural transition both internally and externally. The issues the next minister will face go beyond simple departmental tasks; they are core challenges to restore the backbone of the Korean economy and enhance its growth potential."
* This article has been translated by AI.
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