Invest KOREA

In January 2018, the South Korean government vowed to launch a KRW 2.6 trillion (USD 2.45 billion) investment fund for start-ups. The government also pledged to reduce taxes on profits gained from stock options for start-ups. Additionally, broader financial support for these new businesses was promised recently as a part of the government plan to help reduce the youth unemployment rate. Drawing from recent news, it is not an exaggeration to say that the government is making all-out efforts toward the growth of start-ups. In hopes of becoming a leader of The Fourth Industrial Revolution, South Korea as well as other advanced nations are increasingly seeking to nurture start-ups as they are proving to be the next growth engine.

Though South Korea has the reputation of being one of the world’s most high-tech countries, it has had a subpar start-up ecosystem up until now. Most of the promising Korean start-ups were e-commerce based, with only two considered as “unicorns”, or start-ups valued at over USD 1 billion. This is a small number for such a technologically advanced country, especially in comparison to its neighbor, China, who hosts more than 50 unicorns. It was time for South Korea to take a more active role in diversifying and supporting its start-ups.

Better late than never, though, as positive changes are being made in the country with the government pledging financial and administrative support and as the nation’s vast technological resources and human resources continue to develop. Provinces are also making individual efforts to host and foster start-ups. Gyeonggi-do, a province surrounding Seoul, has emerged as an ideal location for those looking to start a business because it offers fairly affordable living costs while providing easy access to the nation’s capital at the same time.

Gyeonggi Content Agency is actively taking part in promoting the province as the nation’s leading start-up zone. One of its ventures is the Cultural Creation Hub, referred to as “G-Hub.” Since 2014, the Cultural Creation Hub enterprise has been expanding to four regions within Gyeonggi-do: Pangyo, Gwanggyo, Euijeongbu and Siheung. Not taking into account the Siheung hub, which just opened, the three hubs have generated over 270,000 visitors, 943 new businesses, 2,567 jobs, and have attracted KRW 29 billion of foreign investment for 43 start-ups.

Pangyo

The first Cultural Creation Hub is located in Pangyo. Covering 4,254 square meters of land, the hub has generated approximately 500 new businesses and supported about 8,000 start-ups since 2014. It has 22 open spaces, which are provided to start-ups for the duration of six months to two years. The hub’s signature G-Start program is divided into five stages which businesses are to follow according to their varying levels of development. Stages A and B are mostly educational programs and mentoring sessions that help realize ideas and suitable for business. The following stages C, D and E consist of extensive programs that range from networking and financial support for growth to overseas expansion.

In addition to the Cultural Creation Hub, Pangyo opened Pangyo Techno Valley in 2011, which is often dubbed as Korea’s Silicon Valley. With more than 1,300 companies, the complex has been growing rapidly, with an annual economic output in 2016 estimated at KRW 77 trillion. To sustain this start-up momentum, the Second Pangyo Techno Valley is expected to finish construction by 2022. As a way to accomodate the estimated 1,200 startups, the center proposed the establishment of a Software Dream Center, ICT Fusion Center and a Global Biz Center. Like its predecessor, the Second Pangyo Techno Valley will offer affordable rent prices—80 percent of the average commercial rent price in South Korea—for start-ups that are three to seven years old. Furthermore, the Pangyo Start-up Campus was launched in 2016 to serve as a supporting facility for Pangyo Techno Valley by offering workspace and consulting services for more than 200 big data, FinTech, IoT and mobile technology start-ups.

Gwanggyo

Gwanggyo, the location of the second Cultural Creation Hub, has been concen trating on fostering Virtual Reality (VR) and Augmented Reality (AR) start-ups. Since its establishment in 2016, it has supported over 370 start-ups and trained over 500 individuals. It proudly operates the NRP (Next Reality Partners) Program, in which start-up companies with growth potential are selected through an audition and are guided through well-designed acceleration programs for six months. Consisting of legal consultation, mentoring, business classes and VR/AR classes, this program consists of five stages similar to that of Pangyo. Meanwhile, Gwanggyo is seen as the next bio start-up hub. A bio start-up campus is to be completed this year, taking advantage of the fact that one-third of South Korea’s bio industry and 51% of the nation’s ICT companies are concentrated in Gyeonggi-do.

Clearly, Gyeonggi-do is determined to create a stable and productive start-up ecosystem. Aside from creating thousands of new jobs for young workers, thus vitalizing the nation’s economy, the G-Hub, start-up campuses and Techno Valley will be the core engines for South Korea to emerge as a leader in The Fourth Industrial Revolution. With such support and excitement over start-ups, it is not farfetched to say that Gyeonggi-do might be home to the next Korean unicorn.