The global economy has recently entered a revolutionary era driven by rapid advancements in digital technology. Sparked by the spread of IT convergence technology, the Fourth Industrial Revolution highlights the need for continuous innovation for businesses to create high added value products and services to ensure competitiveness.
Ideas for the sustainable growth and innovation of small and medium enterprises (SMEs) are also necessary for innovative growth of the national economy. SMEs are the backbone of the Korean economy, accounting for over 90% of employment. When SMEs engage in a virtuous cycle of growth through voluntary innovation, the national economy is naturally reinvigorated and socioeconomically inclusive growth can also be expected.
Until the 1990s, corporate innovation techniques were implemented with a focus on the perspective of technological innovation based on Joseph Schumpeter’s “creative destruction (Theory of Economic Development, 1912).” However, the Fourth Industrial Revolution and other sudden changes in the global economy have made it impossible to guarantee competitiveness simply by securing technologies. Businesses must establish an organizational culture based on creativity to enable prompt responses to economic changes, and there is a dire need to develop talent to actively manage changes in the market environment. Management innovation, which refers to innovation across all areas of business management, is becoming increasingly important.
Japan, an SME powerhouse, adopted a “management innovation plan approval system” through enactment of the Act on Support for Strengthened Management Capacity of Small and Medium Enterprises, etc., in 2012. It is through this system that Japan is actively handling the advent of the Fourth Industrial Revolution by identifying and intensively nurturing voluntarily innovative businesses. Taiwan, which has a strong SME economy, also enacted the Industry Innovation Act in 2010, defining innovation as a concept that includes both technological and non-technological areas as per the “Oslo Manual (a corporate innovation guideline published by the OECD).”
Accordingly, Korea must also enact laws to enhance and advance SME policies in keeping with the Fourth Industrial Revolution.

Details

A. Prescribe that the purpose of the Act is to formulate and implement policies to support management innovation in SMEs, thereby strengthening the competitiveness of SMEs and contributing to job creation and sound development of the national economy (Article 1).
B. Prescribe that the Minister of SMEs and startups shall formulate 5-yearly SME management innovation support plans to support management innovation in SMEs (Article 6).
C. Prescribe that the Minister of SMEs and Startups shall establish the SME Management Innovation Committee to coordinate and deliberate on matters concerning the promotion of management innovation in SMEs (Article 7).
D. Prescribe that the Minister of SMEs and Startups shall designate specialized agencies to ensure the efficient administration of support for management innovation in SMEs (Article 8).
E. Allow the Minister of SMEs and Startups to take the necessary measures to identify and foster MAINBiz enterprises (Article 17).
F. Prescribe that the Minister of SMEs and Startups shall establish an SME Management Innovation Plan Review Committee to review management innovation plans submitted by SMEs (Article 23).

Statistical survey of management innovation in SMEs (Article 9), revocation of MAINBiz verification (Article 22), application for approval of management innovation plans (Article 25), revocation of approval of management innovation plans (Article 29), reporting and inspections (Article 31), legal fiction as public officials in applying penalties (Article 33)