Small and medium-sized enterprise public software bidding standards expanded to 40 billion KRW... Contract fees and security costs are also affected

The government is promoting institutional reforms to expand the growth foundation for small and medium-sized enterprises (SMEs) and reduce operational burdens. The reforms include increasing opportunities for public software project participation, improving contract discipline requirements, and enhancing safety fee systems at construction sites.

Firstly, the Ministry of Science and ICT has decided to expand the scope of public software projects limited to SME bidding from the previous “below 20 billion KRW” to “below 40 billion KRW.” This move reflects the increasing scale of public software projects and the reality that SMEs are undertaking fewer actual contracts. In fact, the proportion of projects below 20 billion KRW in all public software projects has sharply decreased from 55.4% in 2015 to 35.0% last year. The SME sector had requested to revert the standard to the original level of below 60 billion KRW, but the government stated that this would be a phased adjustment, starting with expanding the scope to below 40 billion KRW and observing the results. Under this standard, the proportion of projects that SMEs can participate in will return to the 48.7% baseline of last year.

Support programs for talent development linked to higher education will also be improved. Previously, concerns were raised that SMEs relocating their headquarters outside the capital region had employees at affiliated research institutes trapped in the contract discipline system. The current regulation only allows contract disciplines at universities within a 50-kilometer radius of the SME’s location. Due to separation between company headquarters and research institutes, workers in the capital region could not utilize this system. In response, the Ministry of Education is advancing institutional reforms that use the location of affiliated research institutes as a basis, including universities within a 50-kilometer radius, with the related revision bill now having completed administrative notice.

The safety management system at construction sites will also be adjusted with SMEs as the focus. Previously, the obligation to allocate industry safety and health management fees was solely borne by the construction contractor. When the main contractor subcontracted the work, the effective enforcement of this obligation weakened. This often resulted in SMEs on-site being unable to secure sufficient safety management funds, making it difficult to effectively manage hazardous factors at work sites. To address this, the Ministry of Employment and Labor is pushing for amendments to extend the obligation to include contractors, with several related revision bills already submitted to the National Assembly and under discussion.

This institutional reform trend is an example of some of the 100 regulatory rationalization tasks submitted by the Central Council for Small and Medium Business to the government, moving into actual policy reflection. The SME community has continuously called for system improvements, emphasizing that easing regulations in key areas such as public procurement, talent development, and industrial safety directly impacts their survival and growth.

This trend is likely to continue towards further enhancing the accessibility and effectiveness of SME policies. Especially as the government shifts focus from one-time support to strengthening the institutional foundation, the overall improvement of the SME ecosystem structure is expected to gradually become evident.