Fostering the entrepreneurial spirit

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Fostering the entrepreneurial spirit

Go Young-ha is an iconic figure in the Korean venture industry. The 61-year-old is chairman of the Go Venture Forum, a network of start-up companies, as well as the Korea Business Angels Association. When he was young, he aspired to become a doctor. But the course of his life was changed by student demonstrations against the dictatorship of President Park Chung Hee that was prolonged by Park’s arbitrary constitutional reforms of 1974. He was detained by the police while he was a medical student at Yonsei University and served a year in prison. After he was released, he couldn’t return to his alma mater, so he started his own business. He sold food items on the streets and worked as a trade agent.

He entered politics along with student activist peers who are now Democratic Party representatives Yoo Ihn-tae and Kim Boo-kyum. But he lost elections in 1992 and 1996. He turned his attention to start-up ventures in the 2000s. He founded Hana TV out of the conviction that the Internet could change the world. He sold the digital TV company to SK Telecom and focused on incubating young talent for venture enterprises and on fostering new innovations through angel investments. He first gathered seven young people by offering to buy them a meal. The group has mushroomed to 300 today.

He was recruited as a member of the advisory board of the Ministry of Science, ICT and Future Planning to draw up a road map for building a “creative economy,” a campaign pledge of the Park Geun-hye government.

But despite Go’s presence, the ministry, which was created by the new administration, faced an identity crisis even before it got off the ground. A Web site created to spark an online explosion of creative economy-based ideas came down just a day after it went up and has been mocked and criticized by the media for the lack of preparation that went into it. The seeds of the creative economy - President Park’s ambitious vision for a new growth engine that could lead the country into the future - are being planted in unstable ground.

The concept was ambiguous from the start, despite the government having taken the right approach. The Korean economy can’t run forever on the overused engine of exports. But the government, nevertheless, is immature and unskilled at finding the means to achieve its goals.

First of all, there is no adequate crew on the ship. Public officials programmed to work in the bureaucratic order are unfit to navigate toward this new future. There are too few who have sufficient experience in the venture industry. They’re learning through books and hearsay. Few of them have heard about “Geeks on a Plane,” an international network of startups, investors and executives, or the “Startup Alliance,” a peer group of active start-up founders and executives helping one another to maximize their businesses. Geeks on a Plane stops in various countries and invites entrepreneurs and venture capitalists onto the plane, providing a unique atmosphere for networking. A local branch of the Startup Alliance, which fosters such enterprises, incubated its first start-up earlier this month.

Bureaucrats must be passionate if they are committed to the goal of creativity and innovation. They must not pore over books but be engrossed in the work of innovation. They should refrain from holding unnecessary seminars. Instead of suddenly calling in people from the industry, they must visit venture executives and pick their brains. We may have to emulate the training program China had for its bureaucrats in which Mao Zedong ordered party members and government officials to spend a certain period of time in rural communities and factories to get the feel for how things worked.

Second, there’s a critical lack of a network to promote start-ups, which is essential for the success of the creative economy. The government announcement on measures to stimulate ventures and startups in May was well-intentioned. Startups must be bred in a virtuous business cycle. A start-up enterprise - once its commercial merits are proven - needs to be sold for a good price so that money can become the seed for another start-up.

In America, mergers and acquisitions of venture firms are happening actively. Young people invest and work on new innovation based on the venture stake they sold to a larger company. Some of the founders of Facebook in 2004 did just that. Dustin Moskovitz and Chris Hughes, who co-founded the social networking site with Mark Zuckerberg, sold their shares and started anew because they couldn’t suppress their entrepreneurial spirit.

The government needs to focus on exactly this - helping the entrepreneurial spirit circulate in the venture industry. It must act as the control tower to create a fertile venture habitat - where startups can easily begin, grow, invest and reinvest. Different government offices are creating venture funds, but there’s no commander. We may end up having just a list of funds without any meaningful outcome.

The Ministry of Science, ICT and Future Planning isn’t really living up to its name; neither is the office for future strategy at the Blue House. The ministry can’t stretch into fields like tax incentives but it needs to command the work of promoting startups. If it can’t handle the job, it should pass the helm to the Small and Medium Business Administration, which is more experienced in business promotion.

*The author is business editor of the JoongAng Ilbo.

by Chung Sun-gu
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