AUDIE LAYARDA WRITES — Seoul will invest $1.7 billion through 2022 to become one of the world’s top five technology start-up hubs. Seoul Mayor Park Won Soon said, “I will improve the structure of Seoul economy and make a “miracle of startup.” Seoul, now one of the top 20 startup ecosystems in the world, benefits from a government which has created a welcoming environment for new talents and businesses.
South Korea’s startup ecosystem has proven that a state does not have to survive solely on a conglomerated economy, with just a few businesses dominating the scene, such as Samsung, LG and Hyundai. Currently, Korea has 12 unicorns (to qualify as a unicorn, a privately owned startup has to have a valuation of over $1 billion). This has put Seoul on the map as a global startup hotspot. At number 1, the most valuable startup, Coupang, is known as South Korea’s Amazon.
It all began in 2013, when President Geun-Hye Park wanted to create jobs through government-driven startup developments by establishing a ‘creative economy’ policy aimed at improving per capita income. Although government funding is crucial to crowning investments and providing ample ground for startups, no other Asian country has such funding. Instead, some of the most common startups are established by way of grants and other incentives to motivate companies.
What’s more, while government policies favor local South Korean investors, even foreign startups have been given room to grow. Subsidized working spaces enable local and foreign startups to thrive. The Ministry of SMEs and Startups (MSS) has helped elevate public awareness regarding how startups can reap the best revenue. For example, it has created programs like the “Tech Incubator Program for Start-up (TIPS),” which provides R&D funds for select startup teams with investments from venture capitalists, and “Smart Venture Start-up Schools” that teach software and content development.
In fact, Koreans have their own Silicon Valley, called Pangyo Techno Valley (an industrial complex). The return of native Koreans and Korean-Americans to the startup ecosystem means a fresh set of eyes on management and strategy. Such cultural migration and multicultural workspace have helped Silicon Valley, so perhaps it can do the same for South Korea.
Publicity helps. The recent K-Drama Start-Up, a romantic comedy-drama about entrepreneurship, has shed light on this growing startup ecosystem. In addition, South Korea has introduced a Startup Visa called the Oasis Visa (D-8-4), equivalent to U.S H-1B Visa, for foreign entrepreneurs who want to start their businesses in South Korea. The same holds for programs for foreigners like the K-Startup Grand Challenge. With the help of local and foreign efforts, South Korea is slowly on its way to becoming Asia’s Silicon Valley.