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FEATURES ECOSYSTEMS
Introduction to the Korean Startup Ecosystem A thriving startup hub that’s coming into its own By STEVE CERVANTES
36
Jumpstart Magazine
April 2020
K
orea’s startup ecosystem is showing the world that it is no longer solely a conglomerated economy, where a few global luminaries dominate the scene. The country has 11 unicorns and counting, ranking fifth globally behind the U.S., China, the United Kingdom, and India. No other startup ecosystem has reached the ten-unicorn threshold as quickly as Korea–if you consider that it began earnestly in 2013. That year, former President Geun-hye Park instituted the ‘creative economy’ policy as a surefire way to create jobs through government-driven startup development. The Korean chaebol (conglomerate) had started to run its course in terms of being the sole growth engine. In previous eras, the chaebol provided one of Asia’s highest standards of living. But outsourcing and automation have caused widespread early retirement and one of the OECD’s highest youth unemployment rates in recent years. Elected in 2017, President Moon Jaein’s administration set out to do much the same, aside from renaming the ‘creative economy’ to the ‘peace economy’ and exponentially raising funds from 1 to 4 billion U.S. dollars annually. Moon’s administration doubled down on its commitment toward growing and developing startups, where they would ultimately become an economic cornerstone. The creative and peace economies’ crowning achievements are providing ample seed funding for early-stage startups. There is no Asian or global comparison with regards to the amount of government funding; through its grants and other schemes, the government invested seven won for every won that private lending institutions invested. In a similar vein, peace economy policies sponsored government and private growth by organizing accelerators and incubators in co-working spaces. They have enabled Korea to become the undisputed per capita Asian leader in numbers—there are over 300 co-working spaces in Seoul alone and 170 incubators or accelerators nationwide. What’s more, the policies haven’t endowed only Korean startups with support. Foreign startups also enjoy vis-à-vis funding, subsidized co-working space use, and targeted acceleration programs for foreigners like the K-Startup Grand Challenge. The program accelerates 40 qualified foreign startups for 3.5 months, with the possibility of an additional 3.5 months based on the startup’s performance, which
