'SMEs in Gyeonggi Province Account for 26.7% of National Total'...GESPA Releases Trend Report

On June 2, Gyeonggi-do Economic Science Promotion Agency published the '2026 Gyeonggi-do Small and Medium Business Trend Report,' which analyzes changes in the industrial structure, operational difficulties, and growth limitations of small and medium-sized enterprises (SMEs) in the province. The report highlights the need to shift policy focus toward restoring manufacturing competitiveness and promoting scaling up in knowledge-based service industries.

The report uses the latest available official statistics to provide a multidimensional analysis of the SME ecosystem in Gyeonggi Province, covering the number of SMEs and employees, industrial structure by sector, business births and closures, research and development capacity, venture company trends, exports and productivity, and labor shortages.

It also offers a comprehensive assessment of major industry trends in manufacturing, information and communications, and professional scientific services; the distribution of SMEs by region; and growth indicators. In addition, it proposes policy tasks in response to industrial structural changes and suggests regional growth strategies.

The analysis shows that Gyeonggi Province has maintained its status as the largest SME cluster in the country. As of 2023, there were 2,216,650 SMEs in the province, accounting for 26.7% of the national total. The proportion of employees stood at 26.6%, with sales accounting for 28.2% of the country’s total.

However, the average number of employees per company decreased from 2.49 in 2020 to 2.30 in 2023, and average sales per company also declined, indicating a deepening trend toward smaller-scale operations.

Changes in industrial structure were also significant. The number of manufacturing companies and their total sales both declined, reflecting reduced vitality. In contrast, the information and communications industry and professional scientific services grew rapidly.

SMEs in the information and communications sector grew at an average annual rate of 18.6% from 2020 to 2023, while the professional scientific services sector recorded 15.0% average annual growth, indicating a shift in the industrial structure toward knowledge-based service industries.

However, both sectors revealed structural weaknesses, as the average number of employees and sales per company declined, demonstrating that the increase in new businesses did not translate into scaling up.

The report also pointed out a weakening of overall dynamism within the SME ecosystem as a major concern. The business birth rate fell from 16.8% in 2020 to 13.0% in 2024, and the manufacturing sector’s birth rate of 5.7% was lower than its closure rate of 6.2%. Both dedicated R&D organizations and in-house corporate research centers showed a downward trend, and the proportion of high-growth companies was below the national average.

'2026 Gyeonggi-do Small and Medium Business Trend Report' published by Gyeonggi-do Economic Science Promotion Agency on the 2nd

Export growth rates also fell short of the national average, and both operating profit margins and interest coverage ratios for SMEs continued to decline. Since 2024, the unfilled vacancy rate for firms with fewer than 300 employees has remained in the 8% range, and companies in manufacturing, information and communications, and professional scientific services have all faced difficulties in securing talent.

To address these issues, the agency recommended shifting the focus of SME policy from quantitative expansion to qualitative growth.

It emphasized the need for policy design based on qualitative indicators such as sustained sales growth, continuity in research and development, and the proportion of high-growth companies. To restore manufacturing competitiveness, the report called for accelerating the transition to advanced manufacturing, strengthening capabilities to respond to next-generation industries such as advanced semiconductors, future mobility, bio, and robotics, and expanding support for manufacturing startups.

Additionally, it proposed strengthening R&D and demonstration, overseas expansion, talent development, and follow-up investment connections to support scaling up in the information and communications and professional scientific services sectors. The report also stressed the need to expand industrial infrastructure and support systems for enterprises in the growth regions of northern Gyeonggi Province.

Hyun Changha, Executive Director of the Future Industry Division at Gyeonggi-do Economic Science Promotion Agency, stated, "SMEs in Gyeonggi Province have experienced quantitative growth, but there are clear limitations in terms of growth potential and innovation capacity. We will strengthen policy support centered on restoring manufacturing competitiveness and scaling up knowledge-based service industries."

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