The Status of SME Structural Changes and Policy Tasks

The concept of industrial structural upgrading is defined differently by each researcher, but it generally means changing from low-technology/low-value-added industry to high-technology and high-value-added industry. In the progress, innovative activities lead to higher productivity, which accelerates economic growth overall.As we all know, the Korean economy has been advanced since the industrialization in heavy and chemical industries in the 1970s. Particularly since 2000, the economy has improved its innovative capacity, thereby transforming its focus on knowledge and technology-intensive industries.In the case of SMEs, in response to the trend of increasing industrial upgrading in the Korean economy, the structure has been promoted from labor-intensive industry to technology and capital-intensive industry. In the upgrade process, SMEs perform dual functions of a leader role and a latecomer. In order to maintain steady economic growth, SMEs should play a leading role in industrial structure upgrading.Although SMEs’ R&D investment has increased since the 2000s, in recent years there has been a socalled ‘Innovation Paradox’ phenomenon in which SMEs’ value-added productivity growth is negative ( - ).This paper first examines the structural changes in SMEs, delving into industrial structure, market structure (sales structure), financial structure, technological innovation structure, productivity structure, and export structure separately. Secondly, the characteristics of the SMEs are analyzed and the policy implications for SMEs to play a leading role in the industrial adjustment process are presented