The government will reorganize the functions and structures of agencies under the Ministry of SMEs and Startups as part of a broader overhaul of public institutions. The Korea SMEs and Startups Distribution Center and Public Home Shopping will be merged into a single organization, and three facility management subsidiaries scattered across affiliated agencies will also be combined into one. The Korea Institute for Small Business and Startups will be transferred from the ministry to the National Research Council for Economics, Humanities and Social Sciences under the Office for Government Policy Coordination.
The government announced the plan, titled the "Public Institution Functional Reform Initiative," on the 3rd. The reorganization focuses on consolidating similar and overlapping functions spread across agencies and streamlining small institutions and subsidiaries to improve the efficiency of public services.
The biggest change among agencies under the ministry involves support for small business sales channels. The government plans to merge the Korea SMEs and Startups Distribution Center with Public Home Shopping to establish an entity tentatively named the SME Marketing Promotion Corporation. The distribution center currently handles policy programs aimed at expanding sales channels for products made by small businesses and small merchants, along with online and offline distribution support. Public Home Shopping sells products from small businesses to consumers through TV home shopping as well as mobile and online malls.
By combining the two, the government aims to bring policy support and the operation of actual sales channels under a single system. The move is intended to raise the efficiency of support programs by integrating a structure in which sales-channel policy and the sales channels themselves had been split between separate agencies.
Facility management subsidiaries operated separately by public institutions under the ministry will also be merged. KIBO Mate of the Korea Technology Finance Corporation, KOSME Partners of the Korea SMEs and Startups Agency and Hanyuwon Partners of the distribution center will be combined into an entity tentatively named SME and Venture Management Corporation. Merging the three companies is intended to unify overlapping organizations and cut operating costs. The government also expects the move to reduce blind spots in the oversight of small subsidiaries.
The Korea Institute for Small Business and Startups, which has handled policy research on small businesses, will be transferred to the National Research Council for Economics, Humanities and Social Sciences under the Office for Government Policy Coordination. The Korea Business Incubation Association will be absorbed into the Korea Institute of Startup and Entrepreneurship Development.
The timing and specific methods for carrying out the reform plan have not yet been finalized. The government will require each ministry to quickly draw up a functional reform roadmap for its agencies and plans to convene the Public Institution Management Committee frequently to approve the measures in stages. Matters requiring new legislation or revisions to existing laws will be pursued in consultation with the National Assembly, while cases involving regional interests will be handled in consultation with local governments.
The government said it will guarantee employment and working conditions for staff as much as possible during the merger process. Employees other than executives at the affected institutions will in principle have their employment carried over, and pay systems will be managed so that conditions do not worsen compared with before the mergers. The government is also considering temporary fixed allowances and higher ceilings on selective welfare benefits, taking into account differences in welfare levels across institutions and the timing of the mergers.
