Small and Medium Enterprise Policy and Support Systems
What this domain tests
This domain tests your working knowledge of how an SME is legally classified, which support instrument fits which problem, and what eligibility and duplication rules govern access to public programmes.
Core rules
- Classification. The Framework Act on SMEs defines an SME by size standards set per industry in the Enforcement Decree, using employee counts and average revenue or assets. Within SMEs, a small enterprise band and a micro band apply; small merchants (sangin) are defined separately by employee thresholds that are lower in non-manufacturing sectors.
- Instruments. Policy funds (direct loans and interest subsidies), credit guarantees through the credit guarantee institutions and local guarantee foundations, tax reductions, public procurement set-asides, export and marketing vouchers, consulting vouchers, and smart-factory grants.
- Venture and innovation certification. The venture route can be met through venture investment, R&D intensity, or technology evaluation; innovation-type certification assesses technology and commercialisation. Each route has its own evidence requirements and validity period.
- Duplication. Most programmes bar double funding of the same cost item - always check the restriction before stacking support.
Worked example
A four-year-old manufacturer with 25 employees and KRW 8bn revenue is comfortably inside the manufacturing size band. It spent KRW 350m on R&D, which is 4.4% of revenue - below the R&D-intensity route if the applicable ratio is around 5%. The investment route needs qualifying venture capital plus an equity stake; the technology-evaluation route needs a minimum guaranteed or loaned amount. Correct answer structure: state that the R&D route fails on the ratio, name the alternative routes and their documentary evidence, and note that exact thresholds must be checked against the current enforcement decree. Recommendation: pursue technology evaluation and align the next R&D budget to clear the ratio.
Traps that cost marks
- Conflating small enterprise with small merchant.
- Treating certification as the goal rather than market access.
- Assuming all support is a grant rather than a loan or guarantee.
- Ignoring duplication restrictions across programmes.