South Korean President Park Geun-hye has made the country’s focus on next-generation innovation and technology quite clear with her announcement of the ‘creative economy’ agenda. The country’s first woman president is leaving no stone unturned to bring the glory of startups to South Korea. The Ministry of Science, ICT and Future Planning has unleashed massive support to early-and mid-level startups with an eye on those who have the potential to make it big globally.This support becomes even more crucial given that 70% of South Korean jobs are generated by SMEs(and startups).
Earlier this month, YourStory(in association with AVING News) spoke to officials from NIPA(National IT Industry Promotion Agency) and the Ministry to know more about their policies for startups and their perspective on the Indian market(and its entrepreneurs). While a series of articles on the South Korean startup landscape is in the works, this article focuses on initiatives by Smart Content Center, a government-supported incubator.
Smart Content Center(SCC) for smart startups
The SCC offers incubation, infrastructure and funding support to homegrown South Korean startups. About 40 startups are incubated at the Anyang-based incubator, which enjoysrobust support from private investors as well as the government.
Hyo-Jin Kang, Director of the SCC, told Yourstoryabout the free tenant facilities (and a 50% discount on utility fees) provided to the startups being incubated at the center. There’s KRW 50 billion (~$43 million) available for investment in these companies. At the same time, to encourage more private investors, the government has committed to match private investment (up to a fixed maximum amount) when startups raisecapital.
SCC is unique in its approach to ‘zombie’ companies. These are firms that received funding some time back, but aren’t going anywhere. While many others would write them off, the SCC wants to bet on their rebirth and eventually doing well owing to their market knowledge.
Challenges faced by Korean startups
According to Hyo-Jin, Korea’s limited market size and the differences in culture across geographies(vs Europe, the US, and the Indian subcontinent) is a major hindrance for Korean startups to get to the next level. The unification of offline and online gaming is in among the department’s top priorities, and itis keen to work on it starting 2016.
The India-Korea story
Hyo-Jin believes that the India-Korea story has a long way to go because of the following factors:
- IP protection and regulations in India for Korean companies can be further simplified
- Though an Asian country, India’s culture is drastically different from that of Korea, Japan or China.
- The massive size and variety of consumers in India,where exposure to technology is relatively new, makes it a very different market from Korea, which has been at the forefront of technological development
Under the current circumstances, the Korean government and policy makers believe that Europe is the next big market after the US and China for their startups, but they are equally positive about rewriting their plans to give India higher priority.
YourStory is optimistic that India and Korea will eventually share more than just their Independence Day – may startups lead the way on that front.
(We’ll be back with more content on Indo-Korean startup ecosystem. Stay tuned.)