Capital-impaired SMEs are allowed to participate in government-led R&Ds

Capital-impaired companies can now receive government R&D support as long as they prove their research capabilities.

The Ministry of SMEs and Startups held a meeting on Thursday with representatives of small- and medium-sized enterprises and R&D experts at the Korea Press Center in Seoul's downtown and announced plans for R&D support scheme reform.

The Ministry will do away with eligibility requirements for R&D support such as "a debt ratio of 1,000% or below" and no capital impairment. That means as long as a company is determined to have development capabilities even if it is in financial trouble, it will be given support funds. The new guidelines will be applied first to projects worth less than 500 million won and will be expanded later for those worth 500 million won or more.

"Our nation's budget for R&D relative to GDP is ranked second in the world and the success rate reaches as high as 95%, but the actual commercialization ratio is only in the single digits," Minister Lee said at the meeting, adding, "Let's fix this problem in ways to make it easier to challenge and do R&D more freely."

In addition, business plans will be simplified by reducing the number of documents to submit from the current 29 while also cutting the length from 30 to 40 pages to fewer than 20 pages. The government will accommodate companies that engage in highly uncertain R&D projects by accepting qualitative claims in addition to quantitative figures.

In order to guarantee free research of R&D-performing companies, the way business plans are modified will also be changed from pre-approval from the Korea Technology & Information Promotion Agency for SMEs (TIPA) to after-the-fact notification.

At the meeting, six corporate representatives including SemiFive CEO Cho Myung-hyun, Oncocross CEO Kim Yi-rang, H2, Inc. CEO Han Shin, Cloudbric CEO Jung Tae-jun, Daemo Engineering CEO Won-hae Lee, YC Chem CEO Seung-hoon Lee, as well as Seoul National University Professor Lee Hyuk-jae, Korea Advanced Institute of Science & Technology Professor Noh Jun-yong, and TIPA President Lee Jae-hong were in attendance.

Write to Hyung-Chang Choi at calling@hankyung.com