What Is Structural Innovation R&D
For SMEs that have received approval for business conversion — a formal business realignment plan — the biggest hurdle in moving into a new industry or product line is technology. The capabilities built up in an existing business area rarely translate into competitiveness in the new field a company is pivoting toward. The Structural Innovation R&D track, part of the Ministry of SMEs and Startups' SME Technology Innovation Development Program (Promising SME Technology Development), was created specifically to close this gap. Unlike standard R&D programs, it carries a unique precondition: eligibility is limited to companies that have already received business conversion approval.
Key Details of the 2026 Second-Half Round 1 Plan
Under the 2026 second-half round 1 implementation plan, Structural Innovation R&D offers support for up to two years, with government funding capped at KRW 500 million, and a government support ratio of up to 75% of total project cost. Eligibility is restricted to SMEs that received business conversion (business realignment) approval within the past two years, making the approval date the central qualifying criterion. Projects can be carried out solely by the applicant company or jointly with another SME, while universities and research institutes may participate only as consigned research institutions, not as lead organizations — the company that received conversion approval must remain the substantive driver of the technology development.
Aligning Conversion Approval with R&D Project Design
The most commonly overlooked issue in applications is timing. If the business realignment plan is still under review, or if more than two years have passed since approval, the company is simply ineligible to apply — so the conversion approval process and R&D project planning need to move forward in parallel. Reviewers also scrutinize whether the direction of the business conversion (for example, shifting from conventional manufacturing to eco-friendly materials, or from traditional parts to EV components) is logically connected to the technology described in the application. If the new business item stated in the realignment plan points in a different direction than the R&D project's target technology, it becomes a clear point of deduction.
What to Prepare Before Applying and How to Handle Evaluation
The business plan needs to go beyond describing the technology itself — it must make a concrete, numbers-backed case for why the technology qualifies as "structural innovation" and how it will establish a market position after development. This typically includes target market size, differentiation from competing technologies, and a three-year post-commercialization revenue plan. Common reasons for rejection include ① weak linkage between the conversion plan and the R&D goals, ② insufficient proof of innovation relative to the company's existing technology, and ③ a commercialization roadmap that lacks specificity. Avoiding these pitfalls requires analyzing similar approved cases in advance and having the business plan reviewed from an evaluator's perspective before submission.
How KITIM Supports Applicants
The Korea Institute of Technology Innovation Management (KITIM) provides one-stop support spanning from drafting the business realignment plan through the Structural Innovation R&D application itself. We design the conversion direction and the technology development project as a single coherent narrative, and prepare both the business plan and the evaluation response strategy together to improve selection odds. If you are considering applying for the 2026 second-half round 1 Structural Innovation R&D program, consult with a KITIM expert now to review your preparation strategy.