A research initiative to measure the production and value added generated by South Korea's small and micro businesses — modeled on how GDP tracks national output — is now formally underway.
The Small Enterprise and Market Service announced Friday that it launched an expert advisory panel at Dream Square in Mapo, Seoul, to begin building what it calls the Small Business Gross Domestic Product indicator, or S-GDP (provisional name).
The S-GDP research aims to systematically measure the production and value added that small and micro businesses contribute to the national economy, using the System of National Accounts as its methodological framework. The agency said the findings will allow it to objectively quantify the economic value of small businesses and lay the groundwork for evidence-based policy development and evaluation.
The advisory panel includes experts from the Bank of Korea, the Ministry of Statistics, the Korea Development Institute, the Korean Economic Association and the Korean Applied Economics Association. At Friday's inaugural meeting, participants shared research findings to date and discussed the indicator's conceptual framework, measurement methodology, consistency with national statistics and potential policy applications.
The research is one of the action items under the "Small Business Value Partnership Project," which agency president In Tae-yeon announced at a press briefing marking his first 100 days in office. The agency has outlined a vision to reposition small businesses as core economic actors and to systematically identify and promote their economic, social, cultural and ecosystem value.
This research represents the first step in objectively measuring the economic dimension of small-business ecosystem value. The agency plans to expand the research in stages to cover social and cultural value as well.
"Small businesses are an ecosystem that drives our economy and local communities," In said. "We will use data to show who is producing the Korean economy, objectively measure the economic value that small businesses create, and build a policy foundation that citizens can actually feel."
Once the research is complete, policymakers are expected to be able to quantitatively analyze the broader economic impact of small-business policy — going beyond the number of businesses, employees and sales figures that have traditionally defined the sector. Industry observers say that objectively assessing small businesses' share of the national economy and the effectiveness of policy measures would also help prioritize budget allocation and support programs.
boo@heraldcorp.com
