The Korea International Trade Association (KITA) released a report on May 29 titled “Export Status and Policy Recommendations for Startups.” According to the report, the export revenue of domestic startups has grown at an impressive annual average rate of 43.8% over the past six years. The data was meticulously gathered and analyzed across various dimensions, including industry, country, and year, focusing on startups that are within their first 7 or 10 years of operation. The findings indicate that startups are emerging as a new dynamic force in Korea’s export landscape as they evolve into global venture businesses.

The report outlines that, from 2017 to 2023, while Korea’s overall exports grew by a modest annual average of 1.6%, startups less than seven years old have seen their export volumes surge by an average of 43.8% annually. In numerical terms, the export value of these young startups increased nearly ninefold from $270 million in 2017 to $2.42 billion in the last year.

The contribution of venture companies and startups to Korea’s total export figures is also on the rise. The share of exports attributable to venture companies increased from 2.1% in 2017 to 3.3% in 2023, with startups showing consistent growth during this period.

Looking at the exports of startups under seven years old, the report highlights that machinery (30.1%), chemical products (25.5%), and electronics (24.8%) together represent 0.5% of the total exports. The export of machinery is predominantly driven by semiconductor manufacturing equipment (22.1%) and automotive parts (13.8%), which are staples of Korea’s primary industries. The chemical sector exports are heavily dominated by cosmetics, accounting for 65.3% of its exports, while electronics are led by semiconductors and electronic devices, comprising 60.1% of the electronics export segment.

China (22.1%), the USA (14.0%), and Japan (13.0%) were identified as the major markets, collectively accounting for 49.1% of the total export volume.

In its report, KITA emphasized that startups are characterized by innovative technologies and business models that spawn new industries and niche markets, albeit with associated risks. It pointed out that, unlike typical SMEs, startups require concrete ‘proof’ of technological and market viability prior to exporting. Accordingly, the report suggests that export enhancement policies for startups should concentrate on supporting this ‘proof of concept.’

One of the standout recommendations is the ‘Testbed Korea’ policy, aimed at utilizing Korea’s high potential market as a global testing ground for startups. This strategy involves creating testbeds tailored to regional characteristics throughout Korea, designed to attract global corporate innovation hubs and foster open innovation between foreign giants and Korean startups.

KITA also recommended refining the highly sought-after startup export vouchers, which are currently geared more towards general SMEs with a focus on obtaining overseas certifications. The report advocates for the inclusion of ‘overseas proof of concept’ support in the voucher system, extending beyond traditional concept verification (PoC) to also support market validity and value verification (Proof of Value, PoV).
Lee Myung-ja, KITA’s Director of Overseas Marketing, commented, “Our survey of 2,000 Korean startups—349 of which responded—indicates that startups continue to face significant challenges in breaking into overseas markets. Customized support policies, such as overseas market validation and domestic testbed development, are crucial for leveraging the rapid growth of startup exports as a new driving force in our export economy.”