● Small businesses constitute a key pillar of the local economy and are closely linked to residents’ daily lives. Along with essential services, they create employment and serve as hubs for community interaction, underpinning local communities.● South Korea’s enactment of the Framework Act on Micro Enterprises in 2020 established an independent institutional foundation for small business policy, providing a framework that extends beyond managerial stability to promote the sustainable growth and development of small businesses. Building on this foundation, the Lee Jae-myung administration aims to cultivate “K-Small Businesses” as part of its national policy agenda.
● At the regional level, small business policy should adopt a growth-oriented and selective support approach. To deliver comprehensive and systematic support, it is essential to establish a growth ladder that integrates stage-specific services and capacity-building programs.
● In Jeonbuk, the budget allocated to growth-oriented small business support accounts for only about one-third of the funding devoted to social safety net programs, resulting in relatively limited resources for promoting small business growth. Moreover, each staff member responsible for small business policy oversees approximately 20,325 businesses, representing a high administrative caseload relative to other local governments.
● The central government and some local governments have established growth-ladder systems that identify high-potential small- and medium-sized enterprises at specific stages of development and offer tailored support packages to help them grow into globally competitive firms.
● Busan has launched the “Busan LICON (B-LICON) Promotion Strategy” to identify innovative, high-potential small business owners and transition them into globally competitive entrepreneurs. This strategy uses a structured stage-based framework spanning start-up, growth, and scale-up, supported by dedicated municipal funds. Through these investments, the city aims to cultivate a supportive growth ecosystem.
● This issue brief highlights the need to restructure small business support policies and outlines key policy measures to transform Jeonbuk’s small businesses into sustainable drivers of the regional economy.
aFirst, this study proposes the establishment of a growth-ladder framework for small businesses. Rather than relying on static statutory definitions or life-cycle classifications, firms aashould be segmented by industry stage, innovation capacity, and growth potential. This allows for differentiated support mechanisms tailored to specific development needs.
Second, a pilot growth package initiative should be introduced. Policy should pivot from fragmented, one-off assistance toward a long-term growth-oriented support model, in which a one-stop support package integrates disparate functions into a cohesive system.
aThird, this study proposes establishing a Jeonbuk Small Business Growth Promotion Fund. Sustained small business growth requires stable funding mechanisms and appropriate institutional arrangements.
aFourth, this study proposes strengthening the institutional capacity of organizations responsible for small business policies. Policy evolution from providing survival assistance to driving entrepreneurial innovation and regional growth requires adequate operational capacity and organizational scale aligned with policy objectives.
aFifth, a governance framework for small business policy should be implemented. To ensure effective policy outcomes, the governance structure must enable multi-stakeholder participation and coordination throughout the policy cycle—from policy formulation to delivery and implementation.
