Korean start-ups stuck in regulations

Only ten years ago, companies that led the global economy were in the finance or manufacturing sectors. But it has changed completely, and now, top companies are in mostly digital IT businesses.

Traditionally strong American companies and emerging Chinese companies are especially leading the global trend. Venture capital company Kleiner Perkins recently published the 2017 Internet Trends Report, and Apple was ranked first on the list of top 20 global internet companies based on market capitalization, followed by American companies Alphabet, Amazon and Facebook. Seven Chinese companies are in the top 20, with Tencent in fifth, Alibaba in sixth and Baidu in tenth. China is the second-most represented country, after 12 American companies. Yahoo Japan is the only Japanese company on the list, and no Korean company made it.

The core of digital economy is to change the world through innovation. Now, just as internet and the smartphone have done, or at an even faster rate, new technologies like AI, self-driving vehicles, IoT and big data will become ubiquitous in our daily lives. The social and economic atmosphere encouraging innovation and technology-based digital economy should be at the center of Korea’s national strategy.

However, the domestic business environment and the awareness of policy makers have not yet caught up with the trend. Asan Nanum Foundation’s “Start-Up Korea” report pointed out that half of the 100 startup companies that received the most investment in the world wouldn’t have been able to begin operation in Korea due to regulations. Half of the global innovative business models wouldn’t even begin to bud, much less bloom in Korean soil.

Start-up companies are not asking for some grand policy support. Hopefully, regulations wouldn’t discourage innovative and passionate entrepreneurs and frustrate fledgling start-up projects, if we are not as supportive as the United States or China.

*Chairman of the Korea Start-Up Forum

Kim Bong-jin