South Korea to restructure SME support programs to save 4 trillion won

The South Korean government has announced a major restructuring of small and medium-sized enterprise (SME) support programs to improve budget efficiency. Out of 671 existing programs across 22 ministries, the government will target 472 programs for optimization, aiming to consolidate or reduce 232 of them.

This restructuring is expected to save approximately 4 trillion won. The savings will be achieved by merging overlapping programs, eliminating small-scale or fragmented support, and cutting low-performance or customary projects. These funds will be reinvested into high-performance core sectors and new growth industries, such as new security, bio-pharmaceuticals, climate tech, and K-consumer goods.

Under the new plan, the government aims to identify 300 innovative companies in these growth sectors annually, providing up to 10 billion won per company over a maximum of five years for R&D, financing, and exports. The support system will shift toward a performance-based model, prioritizing companies with high growth potential in revenue, employment, and AI-based capabilities.

Regarding recent startup trends, data for the first half of 2026 shows a 1.5% year-on-year decrease in total startups, totaling 565,640. While sectors like information technology and professional/scientific services saw significant growth, declines were noted in wholesale and retail, transportation, and personal services.