"For new venture firms to grow, we need to resolve the technology extortion issue first," he said during a press meeting in Seoul. "Some view this could result in more regulations on big firms, but I think we can solve the problem more structurally."

The progressive economist and former lawmaker said the government should encourage the mergers and acquisitions of conglomerates to achieve the prosperity of both small and large firms.

"If we expand incentives on conglomerates who sign M&A contracts with small firms with technology, the larger companies will more likely cooperate with us, and that is the global trend as well," he said.

The remarks were made amid persistent reports about big companies extorting technology from their subcontractors that have little means to fend off unfair business practices for fear of losing supply contracts.

Some of the key issues to be tackled by the new ministry are helping small businesses that will be hit by next year's minimum wage hike and creating new jobs by encouraging startups.

In July, the government decided to raise the minimum wage by 16.4 percent to 7,530 won ($6.85) per hour next year, marking its biggest jump in nearly two decades.

"Government funds should be funneled into those small businesses to cushion the (minimum wage hike's) impact on them, but I personally think that this has not been done enough so far," Hong said. "The ministry will work on all fronts to minimize the side effects." (Yonhap)