"The results show that the government subsidies play a huge role in getting SMEs to hire more people," the report said.

SMEs have traditionally spent little on R&D, prompting the government to prepare a framework targeting support for SME's R&D activities in 1998, STEPI said. A series of R&D programs have been introduced over the past 20 years with the accumulated expenditure at more than 30 trillion won ($26.49 billion).

Thanks to continuous support by subsequent government administrations' SME R&D-related expenditure, a total of 235 small companies have received over 12.73 trillion won over the past five years, the institute said. (Yonhap)