The Korean government has taken various measures to promote R&D activities of small and medium-sized enterprises (SMEs) since the 1980s. It has provided a series of financial and tax incentives to reduce their financial burden, and also taken measures to enhance human resources requirements. SMEs’ performance has grown remarkably over the past three decades. Thus, the Korean government’s active promotion of SMEs’ R&D activities has led to significant outcomes. Korea’s experience in R&D promotion of SMEs presents several important policy implications for developing countries.