Government should use some creativity
It certainly has a good cause, but I’m still leery. I’m talking about the Center for Creative Economy and Innovation that the government is promoting. Seventeen centers are to be established by early 2015 to support aspiring entrepreneurs. It’s a great idea for sure. But ...The government assigned 15 companies to be in charge of the 17 centers, Samsung and Hyundai Motor overseeing two. The corporate giants are asked to mentor start-ups, and their involvement would mean spending money on the center, as well. The conglomerates certainly can afford to sponsor one center, but the idea leaves a bitter taste.
Companies feel pressured. “We got a sudden notice, and before we knew it the plan was announced,” said an official at one. “We don’t even know what to do with it.” When Google created Google Campus, there never was an order or demand from the government.
And Korean conglomerates are not so free to be start-up mentors. In reality, they must pursue innovation and creative ideas themselves in order to survive.
Removing the shackles on conglomerates would be more effective for the creative economy the administration so ardently desires. “When conglomerates are allowed to acquire promising small- and medium-sized companies and entrepreneurs can use the money from the sale as seed money to start up again, a win-win cycle can be created,” said one executive. “But if it happens, the conglomerate is seen as a shark killing small companies.” Samsung Electronics acquired or invested in stakes of 18 foreign companies since 2011, but acquired or invested in only two Korean companies, Medison and Pantech.
I have another suggestion for the creative economy. The government should stop giving money to start-ups and small and midsize companies. Next year, the government has allocated 8.3 trillion won ($7.99 billion) for creative economy, 17 percent more than this year. But doling out money would only make the fledgling company an immature, impertinent man-child who doesn’t understand the real world. No one has heard of any government financial support for China’s Alibaba.
Instead, the government should drastically remove regulations to allow private capital to flow into companies. Crowdfunding, raising venture capital through contributions from a large number of individuals, also should be permitted. When your money gets involved, you become more vigilant and attached. Naturally, companies that get more attention and care will make more efforts. When talking about innovation and creativity, let’s stop playing the same old song.
The author is a deputy business news editor of the JoongAng Ilbo. JoongAng Ilbo, Sept. 24, Page 34
by KIM JUN-HYUN
with the Korea JoongAng Daily
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