Is Equity-Financing Always Optimal for Innovative SMEs? --How ...

第 25 期IV. Fundamental Problems Associated with SME Policy Area inKoreaFailure or inefficiency in policy execution comes either when policymaker has morethan one purpose when planning a scheme or program or when too many programs arecompetitively chasing after one policy target. However, in SME policy area both tendenciesare to a degree unavoidable.A several years ago, at the national audit by the congress, a congressman criticizedKOTEC for financing and giving venture certificate to “Grandma Won’s Bossam 27 ,” afranchised food chain store started as a small merchant shop long time ago by an old lady. Itapplied for technology guarantee of KOTEC and venture certificate because it had an R&Dplan.KOTEC staff, after taking due-diligence with two external experts of a patent lawyerand a Ph.D. with food-related technology, approved the venture certificate and also financedthe project because the patent on its recipe was pretty strong and the project was clear: todevelop recipes suitable to young people’s and foreigners’ taste. Technology business ratingalso turned out to be high. However, many people just regarded it as a traditional foodrestaurant.The reason for telling this episode upfront is to explain the origin of such confusion.1. The historical context of Korean SME Policy: Chronological Hierarchy,Nested, and OverlappingIn Korean SME policy area, there exist three conceptual segments that are “nested” and27 Bossam is a Korean traditional food which we wrap a piece of broiled pork with Kimchi. It is yammy.164