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In 2022, there were more than eight million small and medium-sized enterprises (SMEs) in South Korea, up from about *** million in the previous year. The number of SMEs has increased steadily in recent years, particularly in wholesale and retail trade and the information and communications technology (ICT) sector. More than half of the SMEs were located in the metropolitan area of Seoul, Incheon, and Gyeonggi Province (also known collectively as Sudogwon).

Classification of SMEs in South Korea

South Korean SMEs comprise micro, small, and medium-sized enterprises. Each is classified by revenue rather than by the number of employees, which is the case in many other countries. According to this definition, SMEs are for-profit companies and, in some cases, social enterprises and cooperatives whose total assets do not exceed *** billion South Korean won. In addition, they should not be a subsidiary of a large company.
Companies are classified as SMEs depending on their average three-year revenue, with different thresholds depending on the industry. For real estate companies, the threshold is ** billion won or less, whereas, for some sectors of the manufacturing industry, *** billion won or less would be the standard to be categorized as an SME. 

Domestic SME employment

SMEs in South Korea account for about **** percent of all enterprises and have always been a crucial source of job creation. The number of people employed by SMEs in South Korea amounted to about **** million in 2020, accounting for more than ** percent of the country’s total workforce. Most workers were employed in wholesale and retail SMEs, followed by SMEs operating in the manufacturing sector.