Han Sung-sook's nomination signals rising clout of SME ministry

The nomination of Ministry of SMEs and Startups Minister Han Sung-sook as prime minister candidate has sent ripples through the ministry. Her selection as a former Naver chief executive and prominent businesswoman carries its own significance, but the reaction inside and around the ministry centers on a different point: that the SME ministry has produced a candidate for the country's second-highest office.

Han arrived Monday at her confirmation hearing preparation office at the Financial Supervisory Service training center in Jongno-gu, Seoul, where she told reporters that "the people's livelihoods are in a state of emergency" and pledged to "make every effort toward an economic recovery that citizens can feel."

Han, who served as chief executive of Naver before becoming minister of SMEs and Startups, is widely regarded as someone who combines hands-on corporate management experience with policy execution. She will now go through a National Assembly confirmation hearing, and if the motion for her appointment passes, she will take office as the inaugural prime minister of the Lee Jae Myung administration.

Her nomination carries particular weight inside the ministry. The Ministry of SMEs and Startups was elevated from the Small and Medium Business Administration to a full ministry in July 2017, shortly after the launch of the Moon Jae-in government. Compared with traditional powerhouse ministries — the Ministry of Economy and Finance, Ministry of Foreign Affairs, Ministry of Justice, Ministry of Interior and Safety and Ministry of Trade, Industry and Energy — it has a short institutional history. In the official ordering of government ministries, it ranks after the Ministry of Oceans and Fisheries, placing it near the bottom of the cabinet hierarchy. That is why the ministry has long been known in government circles as the "youngest ministry."

That same ministry has now produced a candidate for prime minister, the second-most powerful position in government. If Han clears the confirmation hearing and approval process, she will become the first prime minister to have served as minister of SMEs and Startups. Inside the ministry, the prevailing interpretation is that "this is a symbolic moment — policies for small businesses, venture companies and the self-employed have moved to the center of national governance."

Past prime ministers have frequently come from ministerial backgrounds, but their home ministries were almost always traditional heavyweights — Interior and Safety, Foreign Affairs, Justice or Trade and Industry. Former Prime Minister Kim Boo-kyum served as minister of interior and safety; former Prime Minister Han Seung-soo as foreign minister; former Prime Minister Hwang Kyo-ahn as justice minister; and former Prime Minister Chung Sye-kyun as minister of commerce, industry and energy. No one from the SME ministry — or even from its predecessor, the Small and Medium Business Administration — has made a direct move to the prime ministership.

The ministry's institutional footprint has also grown considerably. Since its elevation to full ministry status, it has expanded its organization and budget and now operates with both a first vice minister and a second vice minister. By contrast, the Ministry of Trade, Industry and Energy, under which the old SME administration once sat, operates with only one vice minister. The SME ministry's policy remit now spans SME policy, venture and startup policy, self-employed business policy, technology protection, the supply-price linkage system and traditional market policy.

The presidential office cited "competence" as the reason for Han's selection. When Chief of Staff Kang Hoon-sik was asked at the nomination announcement about the decision to appoint a female prime minister, he said, "The personnel philosophy of this administration is strictly centered on ability and competence," adding, "If you are asking why a woman — that does not seem like an appropriate question for 2026."

If the presidential office's explanation is taken at face value, the appointment rests less on the symbolism of Han being a woman or a business executive and more on the policy drive she demonstrated as minister. Since taking office, Han championed a "startup project for everyone" initiative aimed at broadening the base of entrepreneurship. She also maintained an active presence on the ground in areas including the supply-price linkage system, responses to technology theft, and policies for the self-employed and traditional markets. In government circles, a moment from a "Dialogue with SME Leaders" event in March — when President Lee Jae Myung publicly turned to Han and said "You're doing well, aren't you?" while leading applause — was widely read as a sign of presidential confidence.

Expectations inside the ministry are running high. "Policies for small businesses and the self-employed have often been pushed to the back of the queue even within economic ministries," one SME sector official said. "If a prime minister comes from the SME ministry, the policy weight in budget and regulatory coordination could be very different." Another official said, "Given that the ministry started out as a subordinate agency, the symbolism is not small."

The nomination also creates a personnel gap risk for the ministry. Once Han enters the confirmation hearing process, her ability to carry out her duties as minister will inevitably be constrained. The ministry said in a statement issued under the spokesperson's name that "following the nomination as prime minister candidate, all media response and related support for the nominee will be handled by the Prime Minister's Secretariat."

Leadership appointments at affiliated agencies add another layer of uncertainty. At the Korea Technology Finance Corporation, President Kim Jong-ho's term ended in November 2024, but two rounds of successor selection have fallen through, leaving him in place. The agency relaunched a public recruitment process for its next president last month. Appointment timelines at other SME ministry-affiliated bodies — including the Korea Intellectual Property Strategy Agency, Korea Venture Investment, the Korea Startup Agency and the Korea Federation of Small and Medium Business — could also shift depending on when a new minister is named and how quickly the presidential office completes its vetting.

Lee Tae-sik, head of Hanyuwon, has also remained in his post after his term expired in April with no successor named. The standard process for appointing heads of public institutions involves forming a candidate recommendation committee, opening a public application period, conducting document and interview reviews, a ministerial recommendation and presidential office vetting. If the ministry's internal decision-making chain is disrupted while the minister transitions to the prime minister nomination process, appointment schedules will naturally slip.