SME Finance and the Creative Economy in Korea

Abstract

The Park Geun-hye administration put forward the “creative economy” as a new growth strategy for the sustainable growth of Korea. To achieve this goal, SMEs and start-ups are regarded as key players in fostering the creative economy ecosystem, and new policy directions and alternative policy measures need to be addressed.

The creative economy agenda is aimed at switching the ‘catch-up type’ strategy to a new growth strategy founded on innovation, technology and creative ideas. A more concrete concept of the creative economy is required and essential for policy implementation, as well as coordination with the Korean economic environment and policy demand.

In order to foster a creative economic ecosystem, the active role of SMEs is critical; this will be achieved by SMEs’ business ‘growth strategy’ and ‘tools’. Their growth strategy should aim to boost exports and trades in both global and domestic markets, and the tools would be backed up by their specialization and knowledge management in businesses.

The ongoing SME policies and direction in Korea need to be carefully addressed in order to encourage SMEs to play a key role in the creative ecosystem. In coordinating SME policies, structural conformity with the elements of the creative economy and that of SME policies needs to be stressed. In addition, more creativity is required in the new SME policymaking process.

From the perspective of the creative economy, this article reviews the current financial environment faced by SMEs and related on-going policy measures and programs in Korea. It also discusses policy directions to support the ‘creative economy action plan’.

Keywords: small and medium-sized enterprises, SMEs, SME policy, creative economy, SME innovation, SME innovation policy, innovation policy, SME growth policy, SME growth, creative ecosytem, SME financing, SME accounting

JEL Classification: G38, L25