“Empowering Global Entrepreneurship: Unveiling Korea’s Ambitious ‘Startup Korea’ Initiative”Reading Time: 3 minutes
The Ministry of SMEs and Startups in Korea has unveiled “Startup Korea,” an all-encompassing policy designed to provide mid- and long-term support for startups during the Yoon Administration.
According to Minister LEE Young, the startup landscape in South Korea has grown more dynamic thanks to previous governmental support for entrepreneurship. However, the current landscape necessitates a fresh approach that incorporates digitalization, the AI revolution, and other transformative shifts.
Outlined below are the key strategies of “Startup Korea.”
Beyond Boundaries: The Ministry aims to globalize Korea’s startup ecosystem and enhance connectivity between Korean startups and the global arena.
The Korean government aims to create an inclusive startup ecosystem that welcomes skilled talents from around the world to launch their ventures in South Korea. The startup-friendly immigration system will be revamped, facilitating foreign entrepreneurs’ settlement in South Korea and their collaboration with local startups.
A program called K-Tech College will be introduced, offering software training and job placement opportunities with Korean startups to talented students from developing nations, including Vietnam.
Taking cues from the UK’s Global Entrepreneur Programme (GEP), the Ministry will introduce the K-Scouter program, designed to identify and nurture startups with significant potential for entering Korean and Asian markets. Furthermore, a Space-K hub will be established in the greater Seoul area to foster communication and collaboration among young entrepreneurs globally.
Support will be extended to Korean entrepreneurs launching businesses abroad. For instance, the Ministry plans to lay the groundwork for those who have established businesses outside Korea and have significantly contributed to the Korean economy, offering assistance provided they meet eligibility criteria.
A global fund, totaling approximately KRW 10 trillion (USD 7.5 billion), will be raised in 2024 to attract overseas investments into South Korean startups and aid in their global expansion. The South Korean government established this global fund to attract more investors to Korean startups by investing in foreign funds.
Solidarity: The Ministry plans to encourage private capital participation in venture capital (VC) investments and introduce novel forms of financial support for startups.
In a collaborative effort between the government and the private sector, investments will be made in the Startup Korea Fund, with a target of reaching KRW 2 trillion (USD 1.5 billion) by 2027. This fund will complement existing investments in fund-of-funds initiatives. It will place significant investments in strategic sectors, particularly deep tech fields such as artificial intelligence and semiconductors.
The Ministry will introduce innovative forms of financial support for startups. While previous support primarily involved subsidies, the new approach combines investment and loans. This novel approach aims to expand companies’ options without necessitating additional budget allocations.
Regional Startups, Equal Opportunities, and Open Innovation: The Ministry will invigorate regional startup ecosystems and foster open innovation collaborations between startups and major corporations.
The Ministry’s objective is to establish a virtuous cycle of regional economic stimulation and balanced regional growth by bolstering startup ecosystems in regions that have been relatively marginalized.
As part of this effort, the Ministry plans to create ‘Provincial Space-K’ hubs in areas with dense concentrations of anchor companies, universities, and research institutes, providing a conducive environment for young individuals to settle and innovate.
The Ministry intends to expand Regional Angel Investment hubs to encourage investment in areas beyond the capital. These hubs promote early-stage investments outside the capital region. Moreover, collaborative programs between startups and major corporations will be extended to the top ten emerging industries, such as artificial intelligence and biotechnology.
“Startup Korea” encompasses tailored policies to aid military personnel, youth, university students, researchers, and serial entrepreneurs in launching their ventures.
Minister LEE Young of SMEs and Startups emphasized the collaborative efforts of various South Korean ministries, including the Ministries of Economy and Finance, Justice, and Science and ICT, in developing comprehensive measures for “Startup Korea,” with the overarching goal of positioning South Korea as a prominent startup nation. Minister LEE expressed the Ministry’s aspiration to elevate the number of Korean K-Startups within the top 100 global unicorns to five.
Presently, only one Korean company is featured in the top 100 unicorns, as per CB Insights’ company valuation. The Ministry aims to enhance South Korea’s startup ecosystem ranking through increased VC investments, ultimately aiming for South Korea to become one of the world’s top three startup nations.
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