The APEC Startup conference that just wrapped up in Seoul signaled stepped-up interest within the 21 APEC member nations in policies that promote new firm formation as ameans of “booting up” economies. Interestingly, the drive for this effort is being led not by the United States, but by South Korea which has taken big strides over the past two years to rebuild its own startup ecosystem.
On an earlier visit, I observed that despite Korea’s track record for highly innovative big firms, a negative attitude towards “risk” and “failure” had been blocking the emergence of new innovators. On my trip to Seoul last week to open the APEC meeting, it was clear that a new generation of thinking has emerged focused on making the nation a cultural capital for entrepreneurship.
First, Korea is focused on becoming a leader in entrepreneurship education and I was told last week it is pushing a make-a-job mentality throughout its 128 fully recognized universities. At the national level, the Korea Institute of Startup and Entrepreneurship Development (KISED) is now running various programs and this year, KISED appointed 15 universities as advanced universities for entrepreneurship which will receive support for their activities, ranging from startup training programs to business plan competitions.
At the local level, entrepreneurship training programs have been flourishing—and sometimes competing with federal government activities, according to local entrepreneurship experts. The Seoul Metropolitan Government, for example, runs the Youth 1,000 CEO Project to provide young entrepreneurs with free officespace and grants.
In terms of global outlook, the South Korean government has been seeking diaspora influence through its investors visas, estimated at 35,000 issuances a year. This along with the decision to initiate Startup APEC is clearly designed to facilitate access to more global networks for Korean entrepreneurs.
South Korea’s President Lee Myung-bak’s government has also encouraged more public-private partnerships. Last week I met with the Board of the Korea Entrepreneurship Foundation (KEF), a non-profit organization launched in March 2011 with the leadership of local entrepreneurs and with support from the government’s Small and Medium Business Administration (SMBA), the Asan Nanum Foundation, POSCO, the GO Venture Forum, Angel Leaders Forum, the Student Startup and Venture Networks and many more. Entrepreneur Chul-joo Hwang, KEF’s chairman, hopes to develop KEF into a “Kauffman Foundation” for Korea handling education, research and policy, network building and angel matching funds. KEF will also run the grassroots Global Entrepreneurship Week in Korea to help increase the level of public interest from all Koreans willing to explore their entrepreneurial potential.
Korea’s emerging entrepreneurial ecosystem is made especially interesting to outside observers by the history and performance of its big firms. Companies like Samsung are often cited for their willingness to embrace the Schumpeterian principles of creative destruction as they compete with lean startups set upon disrupting their markets.
Building such a symbiotic relationship is vital in encouraging more new firm formation. It is common to hear the refrain “you don’t compete with the chaebol” (huge conglomerates). Young people I spoke to at Chung-Ang University and Hanbat National University told me that bright Koreans generally prepare for careers in the chaebol or the government but these institutions cannot absorb the young unemployed. The Economist recently reported that 346,000 graduates are currently out of work, up from 268,000 two yearsago. Official figures from the Ministry of Education say that more than 40 percent of college graduates in the past year could not find a job.
The challenge is not one of talent by any standards. According to the OECD, South Korean 15-year-olds rank 1st worldwide in reading and math, and 3rd (behind Finland and Japan) in science while more than 60 percent of Koreans ages 25 to 34 attained higher education. Rather, Korea still needs more public acceptance of entrepreneurs and an environment in which the entrepreneurial path is highly-regarded to fuel a new wave of Korean innovators. Cultural mindsets are hard to change but with the interest of Korean foundations in fostering messy startup communities and other state of the art parts of a strong startup ecosystem, this can change. Korea is already one of the top 10 easiest places on earth for doing business, according to World Bank data. And, like in Singapore, the networks emerging from the general globalization of startup communities are unleashing more risk-taking in South Korea. At lunch with the Korea Entrepreneurship Foundation, I talked to a student, Hee-kyeong Jin, who told me she was off to Stanford to learn everything she could in building better networked Korean university venturenetworks and startup clubs. That day I also met with 14 reporters all writers on entrepreneurship and startups hungry for content on startup culture.
Koreans are already known for their smarts, extraordinary work ethic and competitive spirit. And their leadership on Startup APEC is just one indicator of support for high growth entrepreneurship from the highest levels of government—not to mention the front runner in December’s upcoming Presidential election is an entrepreneur. With the Korea Entrepreneurship Foundation now establishing strong thought leadership on both policy and programs to support more entrepreneurs, I expect we will see more Koreans joining the ranks of the world’s most successful startup junkies.