Korean government aggressively promoting innovation in ‘economic vitality & work place’ for “Second Venture Boom”

President Moon Jae-in

The Korean government and the ruling party are aggressively putting efforts toward the “second venture boom.” The government’s focus on economic policy has shifted from income-led growth to innovative growth since the second half of  2018. The government intends to mobilize all its policy tools to foster startups and venture companies that will be responsible for future food and jobs. President Moon Jae-in has emphasized on innovation in financial sectors such as bank lending, capital markets and policy financing to stress second venture boom saying, “In order to spread the second venture boom, there should be finance that supports challenges and encourages innovation in addition to efforts by companies and the government.”

The main contents of the innovative financing stressed by President Moon include the reorganization of the existing collateral system, the inflow of venture capital and the epochal easing of listing standards. They say they will induce a venture boom by drastically lowering funding barriers for startups and venture firms. Specifically, the government intends to implement the package collateral system starting this year. It is also planning to create a fund worth 12 trillion won (US$12 billion) by 2022 and actively find promising startups in bio and healthcare, FinTech and ICT (Information Communication Technology). Programs to support startups such as university technology holding companies and TIPS will also be greatly strengthened.

The government seems to be making all-inclusive efforts to revive economic vitality as concerns over the shrinking of small and medium-sized companies and small businesses and job crisis have coincided with the hike in the minimum wage since the second half of last year. The promotion of venture businesses is aimed at both innovative growth and job creation. There are aspects of next-generation ICT such as Artificial Intelligence and big data, response to fourth industrial revolution based on FinTech, and market dominance.

“As it has become difficult to expect growth or fall-off effects through large companies as in the past, fostering venture businesses is necessary,” said an official at the National Assembly’s Strategy and Finance Committee, adding that, “Close consideration will be needed to prevent only being called the belly of startup brokers.” “The government’s emphasis on scale-up is already overflowing with investors,” a Bareunmirae Party expert said. “There is a possibility that it will flow into a show-and-show administration for tangible results in the second half of the term.”

About KoreaTechToday Editor

KOREATECH TODAY, A NEWS PLATFORM FOR KOREAN TECH WITH A FOCUS ON INDUSTRY NEWS AND PROMISING PROJECTS.

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