SMEs account for 60 percent of total employment in OECD countries and generate up to 60 percent of added value, the report, dated May 15, points out.

As of 2014, South Korea's SMEs ranked 33rd among the 34 surveyed countries in terms of recognition of entrepreneurial opportunities, with only Japan placed lower. Compared to 70 percent of adults in Sweden who saw good opportunities in starting a business, less than 20 percent were able to do so in South Korea and Japan. 

Such reservations can impede their growth and contribute to the economy as a whole.

Some 40 percent of South Korean adults said they were hesitant to start a business out of fear of failure, placing the country at seventh in the category. Greece, Japan and Israel were in the top three.

On accessibility to training on starting or growing a business, South Korea ranked at 23rd. Finland, New Zealand and Australia filled the top three.

South Korea had the best information, communication and technology infrastructure and energy costs among the surveyed countries. With a 26.8 percent of the population connected to high-speed internet, the highest among OECD member states, South Korea has a strong foundation to be able to provide e-commerce platforms at low costs, the report said.

Electricity prices for South Korea's SMEs were second-lowest after Norway, allowing them room for better earnings, it said.

"The government is making efforts to ease regulations on startups, but youths with ideas and technology-capable middle-aged people are still reluctant," Noh Min-sun of Korea Small Business Institute said. "The perception still runs strong that business failure will ruin the entire household. There has to be support not just for starting a business but programs for a second try after failure, and reinforcement of education for the entrepreneurial spirit." (Yonhap)