Non-refundable and co-financing instruments: Promoting export innovation among SMEs in the Republic of Korea

In the Republic of Korea, public export support programmes for small and medium-sized enterprises (SMEs) have played a significant role in the internationalization process of such firms. Multiple non-reimbursable and co-financing instruments that promote export innovation among SMEs have contributed to their export success which, alongside large firms, made the Republic of Korea the world’s fifth largest exporting country in 2015. This study summarizes these support programmes and some key factors in relation to their implementation, some of which may be useful for those responsible for formulating and implementing similar programmes in Latin America and the Caribbean. First, the authors highlight the continuity of these policies since the 1950s. Second, the Republic of Korea has a unique set-up of institutions supporting SMEs exports, including the Ministry of Small and Medium Enterprises and Startups, the Korea Trade-Investment Promotion Agency (KOTRA) and the Korea International Trade Association (KITA). Third, some new initiatives have been introduced recently to accelerate SME internationalization, including a voucher scheme, in which eligible SMEs can select specific types of support of their own choice. Fourth, many programmes focus on the integration of SMEs into global value chains, particularly in the case of suppliers of parts and components to large Korean firms.