Reasons for Proposal
At a time when the digital and untact economy is emerging as a new economic model around the world and a shift towards such an economic model is accelerating, foreign untact companies with innovative technologies emerge, grow rapidly, and get ahead in the global market.
Meanwhile, untact small and medium startups with promising growth potential are also emerging in Korea, and domestic venture capital investment in such startups increases even amid contracting economic situations due to the spread of COVID-19. Untact small and medium startups also demonstrate a better job creation effect than face-to-face companies.
Given their importance, the government needs to shift towards the digital and untact economy as an opportunity to turn the Korean economy from follower to leader, strengthen competitiveness in untact small and medium startups by systematically promoting them, encourage growth and globalization in domestic untact small and medium startups to get ahead in foreign markets, and maximize job creation.
However, there is no agreed definition of untact small and medium startups, support for such startups is scattered across various government agencies and public institutions, and there is a lack of any organization within the government to oversee and coordinate promotion policies for the startups, which makes it difficult to systematically nurture the startups.
In this regard, this Act aims to establish government policies from a holistic and mid- and long-term perspective, which comprehensively considers the characteristics of untact small and medium startups, and build a systematic promotion system that covers the overall ecosystem of the startups. To do so, the Act on the Promotion of Untact Small and Medium Startups is legislated to specify the definition of untact small and medium startups, establish an untact small and medium startup promotion master plan and create an organization within the government to oversee and coordinate promotion policies for such startups, prepare the promotion foundation for the startups such as support for the globalization of startups, select promising and leading untact small and medium startups, and define special cases for the startups.
Details
A. Define terminologies such as untact businesses, untact small and medium startups, promising untact small and medium startups, and leading untact small and medium startups (Article 2)
B. Require the Minister of SMEs and Startups to establish and implement a new master plan every 3 years, which includes basic directions in policies to nurture untact small and medium startups, to systematically promote and globalize untact small and medium startups and the heads of relevant central government agencies to establish and implement annual action plans under the master plan (Articles 5 and 6)
C. Require the Minister of SMEs and Startups to investigate the activity and status of untact small and medium startups every year and disclose the investigation’s results to systematically promote the startups and establish and implement the master plan efficiently (Article 8)
D. Place the Untact Small and Medium Startup Promotion Committee under the Ministry of SMEs and Startups to review promotion and support for untact small and medium startups such as the establishment and implementation of the master plan and the introduction and change of programs related to the promotion of such startups, and establish a working group under the Ministry of SMEs and Startups to support the operation of the Untact Small and Medium Startup Promotion Committee (Articles 9 and 10)
E. Allow the government to provide necessary support to any person who wants to create an untact small and medium startup (“untact small and medium business starter”) to encourage such startups and prioritize untact small and medium business starters in any startup support under the Support for Small and Medium Enterprise Establishment Act and the Act on the Protection of and Support for Micro Enterprises (Articles 11 and 12)
F. Allow the Minister of SMEs and Startups to support projects that facilitate the introduction of untact business in micro-enterprises and the joint use and collaboration of untact business by micro-enterprises and traditional markets, and prioritize micro-enterprises participating in projects that facilitate the introduction of untact business if the Market Promotion Fund for Micro Enterprises under the Act on the Protection of and Support for Micro Enterprises is used as a source of borrowing (Articles 13, 14, and 15)
G. Require the Minister of SMEs and Startups to provide R&D and technical support to facilitate technological development in untact small and medium startups and designate a research institute devoted to the promotion of such startups to effectively pursue R&D required for the startups, and the government to prepare intellectual property protection measures for the startups (Articles 16, 17, and 18)
H. Allow the government and the Minister of SMEs and Startups to prioritize funding for untact small and medium startups in advancing into overseas markets and pursue projects that establish international distribution networks for the startups and support their promotion, sales, and after-sales management to globalize such startups, and provide preferential conditions to the startups if they open and operate dedicated shops for small and medium enterprise-manufactured products under the Act on Facilitation of Purchase of Small and Medium Enterprise-manufactured Products and Support for Development of Their Markets by taking out loans from the Export-Import Bank of Korea under the Export-Import Bank of Korea Act (Articles 19 and 20)
