Ministry of SMEs and Startups builds communication channels with 17 industry groups to ease startup regulations

The Ministry of SMEs and Startups is establishing a communication framework with industry groups to address regulatory burdens facing startups in emerging sectors such as AI, autonomous driving and climate technology. The initiative aims to identify unreasonable regulations based on field feedback and work with related ministries to improve them.

The ministry signed a memorandum of understanding with 17 industry associations and groups — including the Korea Startup Forum, the Korea Venture Business Association and the Korea AI and Robot Industry Association — on Wednesday at the Startup Venture Campus (SVC Seoul) in Mapo-gu, Seoul. The signing was followed by a roundtable where startups shared regulatory difficulties they face in practice and discussed ways to rationalize the rules.

The MOU brings together 17 associations and groups covering emerging industries including autonomous driving, mobility, drones, smart data, AI and robotics, smart manufacturing, climate technology, renewable energy, and biotech and medical devices. The ministry plans to work jointly with the signatories to survey companies struggling with regulations, identify specific barriers, build public awareness and submit recommendations to related ministries.

The ministry will set up and operate a dedicated communication channel with the associations to identify and address unreasonable regulations. Each organization will also cooperate in holding roundtables and forums on regulatory relief and conducting surveys on pain points in their respective sectors.

The roundtable also surfaced the regulatory burden startups face. According to the ministry, most startups struggle to respond to regulations due to a lack of dedicated staff and information, and deregulation ranks as the most urgent policy priority in emerging industries after boosting investment. A Startup Alliance survey last year similarly found that startups ranked deregulation second only to securing funding and boosting investment as the top issue the government should address first.

While the government has supported the testing of new industries through regulatory free zones and regulatory sandboxes, startups still face difficulties with individual laws, licensing requirements and a range of other regulations during the commercialization process. The agreement establishes a system for continuously gathering regulatory needs from the field through sector-specific associations and connecting them to the relevant ministries — a structure the industry has lacked. Whether the initiative will translate into actual regulatory reform remains to be seen.

"New-industry technologies such as AI and autonomous driving are advancing rapidly, but existing rules and regulations have not been keeping pace with the speed of change," said Noh Yong-seok, first vice minister of the Ministry of SMEs and Startups. "We will actively identify regulatory barriers through public-private collaboration and pursue regulatory rationalization through pan-government cooperation."