The Role of Small and Medium-Sized Industrial Enterprises in Supporting Industrial and Economic Security: The Korean Experience as a Model

Abstract

Achieving industrial and economic security has become a central issue in contemporary economic development, particularly in light of the rapid transformations occurring in the global economy, along with associated economic and geopolitical crises, supply chain disruptions, and increasing interdependence among economies. The concept of economic security is no longer limited to a country's ability to provide financial resources or achieve high growth rates. It now also encompasses its capacity to build a diversified production base, secure its basic needs, reduce its vulnerability to external shocks, and enhance its ability to sustain production under exceptional circumstances. This paper aims to analyze the role of small industrial enterprises in achieving industrial and economic security, drawing on the South Korean experience. Small industrial enterprises play a pivotal role in enhancing industrial security by diversifying the production structure, strengthening the resilience of supply chains, and reducing reliance on imports. In the Korean context, these enterprises have effectively contributed to supporting large industries through subcontracting networks, technological development, and innovation-led growth. The study highlights South Korean government policies, such as financial support, technology transfer, human capital development, and institutional coordination, that have enabled small industrial enterprises to improve productivity, enhance competitiveness, and integrate into global value chains. The paper concludes that empowering small industrial enterprises strengthens economic security by creating jobs, increasing the added value of production, and achieving balanced regional development. The findings suggest that adopting the lessons learned from the Korean experience can help developing economies strengthen their industrial base and achieve sustainable industrial and economic security.