The new ministry in charge of small and medium-sized businesses officially started work Wednesday amid expectations it will support smaller companies and create new jobs.

Earlier this month, the parliament passed a bill to elevate the Small and Medium Business Administration to a ministry for SMEs, venture startups and micro-businesses, as pledged by President Moon Jae-in during the election campaign.

The Ministry of SMEs and Startups is headquartered in Daejeon, central South Korea, with 431 employees, up from 353 when the ministry was an entity headed by a vice-minister level official. 

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

Earlier in the day, the ministry said it will invest some 870 billion won ($776 million) together with Korea Venture Investment Corp. to support startups run by young entrepreneurs and those related to the so-called fourth industrial revolution, the merging of technologies in the physical and digital areas that brings new opportunities.

The government expects SMEs and startups to resolve the country's high youth unemployment rate.

South Korea's jobless rate stood at 3.8 percent in June, but the unemployment rate for young people aged between 15 and 29 was 10.1 percent. (Yonhap)