In a significant stride towards fostering gender equality and economic growth, South Korea’s Ministry of SMEs and Startups has launched an expansive plan aimed at empowering women in business. With a dedicated focus on expanding opportunities and support networks for female entrepreneurs, the ministry’s initiatives signal a transformative step towards inclusivity and sustainable development.

Announced on March 7th, the ministry unveiled this year’s implementation plan to promote women’s business activities. Aligned with the Women’s Enterprise Act, this initiative follows a five-year basic plan established in 2020, with this year marking its final implementation phase. Additionally, preparations are underway for the inception of a second basic plan, slated to commence next year.

Park Jong-chan, Director of Small and Medium Business Policy at the Ministry of SMEs and Startups, emphasized the pivotal role of women in driving sustainable economic development, especially amidst challenges posed by low birth rates and an aging population. “Promoting women’s participation in economic activities is vital for the sustainable growth of our economy,” stated Director Park. “We are committed to implementing robust measures to nurture women’s businesses as the new leaders of tomorrow.”

Key Initiatives to Bolster Support for Women Led Businesses

The ministry’s latest announcement outlines key strategies to bolster support for women-led startups and facilitate their expansion into global markets. Notably, a shift in focus from college students to career-break women highlights a targeted effort to tap into diverse talent pools and encourage entrepreneurship at different life stages. Initiatives such as the Future Economy Women’s Development Project, which has expanded its support to encompass 1,200 students from 30 schools, underscore the government’s commitment to fostering a conducive ecosystem for female entrepreneurs.

Furthermore, a new global accelerating project has been launched this year, offering trade training, consulting, and public relations support. The magnitude of public purchases of women-owned products surged to KRW 12.2 trillion (USD 9.2 billion) in 2023, compared to KRW 900 billion (USD 682 million) the previous year, reflecting a substantial increase in market engagement.

In a groundbreaking move, the Ministry of SMEs and Startups incorporated agricultural cooperatives, previously unrecognized as women’s enterprises, into the fold. With 1,445 agricultural cooperatives led by women, local governments and regions are actively fostering female entrepreneurship, offering preferential funding for women’s businesses. Additionally, in February 2024, the Ministry announced its plans to invest KRW 910 billion (USD 689 million) to raise a venture capital fund of KRW 1.7 trillion (USD 1.2 billion), including specialized funds worth KRW 16.7 billion (USD 12.6 million) for women.

Women Enterprises Survey Findings and Challenges

Meanwhile, according to the results of a 2023 survey announced in February 2024, on the status of women’s enterprises, women’s enterprises had higher profitability. Survey findings from 2023 reveal promising trends among women’s enterprises, with improved profitability, stability, and activity reported. Despite challenges such as declining productivity, women entrepreneurs have shown resilience in navigating competitive landscapes.

The key points from the 2023 survey on the status of women’s enterprises announced by the Ministry of SMEs and Startups in February 2024:

1. Financial Performance: Women’s enterprises demonstrated improved profitability with a net profit ratio increasing from 4.7% to 5.1%. Stability also improved as the debt ratio decreased from 165.1% to 135.2%. However, productivity saw a decline with average sales per person dropping from KRW 232 million (USD 175k) to KRW 205 million (USD 155k).
2. Export and R&D: The proportion of exports to sales of women-owned enterprises increased to 2.6%, up by 0.3 percentage points. R&D investment experience also grew by 1 percentage point, reaching 4.3%.
3. Strengths and Weaknesses: Female entrepreneurs identified ‘delicacy’ as their number one strength. Leadership and integrity also saw increases in responses. However, challenges related to the ‘spirit of challenge’ persisted, with a rise in the percentage of respondents citing innovation and planning ability as weaknesses.
4. Work-Family Balance and Networking: Work-family balance emerged as a significant challenge, with 39.6% of female entrepreneurs feeling disadvantaged in this aspect. Additionally, the perception of limited participation in male-dominated networks increased from 16.6% to 26.6%.
5. Support Needs: Financial support was identified as the most crucial requirement for women’s businesses, followed by human resources, tax, and sales support. Financial support and tax support were perceived to be highly effective.
6. Government Purchasing and Business Factors: Approximately 8.8% of companies had experience supplying government agencies through public purchasing, with an 85.9% response rate indicating its helpfulness. Factors affecting business activities included decreased demand due to an economic recession, increased costs like labor and raw materials, and intensified competition between companies.

Despite challenges such as declining productivity, women entrepreneurs have shown resilience in navigating competitive landscapes. As South Korea continues its commitment to gender equality and economic empowerment, the Ministry of SMEs and Startups spearheads initiatives aimed at leveling the playing field for women in business. By championing diversity, innovation, and inclusivity, Korea is poised to unlock the full potential of its female entrepreneurs, driving sustained economic prosperity for all.

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