SMEs Feel Regulatory Burden in Order of 'Labor, Capital, Environment'

Jungjingong Publishes Report on 'SME Regulatory Burden Perception and Necessary Improvement Tasks'

Domestic small and medium-sized enterprises (SMEs) feel the burden of regulations in the order of workforce and employment, financing, and environment, according to a survey. The Small and Medium Business Corporation (SBC) announced on the 14th that it has published the "SME Regulation Perception and Improvement Tasks," which investigates the perception of the domestic regulatory environment and related difficulties.

This survey was conducted targeting about 2,000 SMEs to understand the regulatory burdens felt by SMEs and to seek practical improvement measures reflecting voices from the field.

According to the report, a majority (43.7%) of the respondent companies answered that improvement of the domestic regulatory environment is necessary. The reasons cited included "there are more newly established regulations than regulations being resolved (42.4%)," followed by "lack of willingness for regulatory reform in the public sector (22.6%)," and "insufficient improvement of core regulations (16.4%)."

Small and Medium Business Corporation

Nevertheless, companies showed a positive perception of the regulatory environment increased by 2.7 percentage points compared to the previous year, while negative perception decreased by 9.5 percentage points, confirming gradual changes.

The areas where SMEs felt the regulatory burden most were workforce and employment (43.7%), financing (41.7%), environment (29.9%), and technology and certification (22.7%) in that order.

In particular, the issue requiring a flexible regulatory response environment was identified as the "Serious Accident Punishment Act (28.6%)," followed by "excessive environmental regulations (15.3%)," and "uniform application of the minimum wage system (14.8%)."

Additionally, about 4 out of 10 respondent companies (39.5%) experienced difficulties due to regulations within the last three years. Among companies that experienced regulations, the biggest difficulties were costs incurred (41.9%), sales decline (20.6%), and delays in technology development (15.6%) in that order.

As for domestic regulatory improvement measures, companies most preferred "expansion of temporary regulatory suspension measures and creation of a flexible regulatory environment (38.0%)," followed by "reduction in the quantity of regulations such as removal of overlapping regulations (32.8%)," "expansion of regulatory communication channels (14.6%)," and "promotion of regulatory improvements focused on new industries (11.6%)," which were seen as having a positive impact on corporate innovation.

Kang Seok-jin, Director of SBC, said, "For our small and medium venture companies to boldly challenge and leap into new industries, an environment free from regulatory constraints and customized support considering field conditions are essential." He added, "SBC will serve as a regulatory communication channel by holding the 'SME Ombudsman' and 'SME S.O.S Talk' every month, and will continue efforts to reduce corporate burdens, such as recently introducing the 'SME Employee Preferential Savings Deduction' with the Ministry of SMEs and Startups to resolve workforce difficulties."

This content was produced with the assistance of AI translation services.