Korea’s start-up scene is starting to look a little less Korean
Monroe was one of 78 foreign stat-ups from 32 countries that pitched business ideas at a four-day event held last month by the Ministry of Science, ICT and Future Planning and the Korean National IT Industry Promotion Agency at a so-called start-up campus in Pangyo, Gyeonggi’s IT and start-up hub.
Most of the participants were in their 20s and 30s and start-ups from the U.S. were the largest segment, accounting for 21 percent, followed by Indian start-ups with 10 percent. The audience was representatives of start-up incubators.
In November, 20 companies will be selected for support in either starting a business in Korea or opening a branch here. The support includes visas, office space and 40 million won ($36,400) each.
The Korean government’s first foreign start-up event attracted more than 2,400 applications from 124 countries. This is considered a big success: similar events in other countries attract an average of 1,000 applications.
“We were genuinely surprised,” said Jung Jae-shik, an official at the science, ICT and future planning ministry. “We thought it would be a success if we were able to attract 500 applicants.”
Clay Lee, Pulzze Systems’ chief strategy officer, said the IoT company heard of the Korean government start-up competition from the Korean IT promotion agency’s U.S. office, and said it attracted a lot of interest in Silicon Valley.
“The atmosphere was great,” said Lee. “We’ve been to other similar start-up events but there was a lot of passion and the quality of the presentation was really high.”
Pulzze Systems has participated in start-up competitions in different countries including the G-Startup Worldwide competition held in Tokyo.
Lee said the main prize at other major start-up events is a substantial sum of money. The Korean event offered more practical benefits that start-ups desperately need.
“The Korean government’s event not only offered a good program, with free lectures and one-on-one opportunities to meet with accelerators, which is what start-ups really need,” Lee said. Other perks provided by the Korean government included free flight tickets, assistance with visas as well as helping participants find lodgings, which is why so many start-ups applied.
Another key factor was the opportunity for start-ups to meet with officials from major Korean business houses including Samsung Electronics, SK, Naver and KT.
With this year’s event seen as a success, the science ministry is planning to raise the number of applications it will accept next year.
The central government is not alone in trying to attract talented foreign start-ups. The Seoul metropolitan government last month selected 50 finalists in a competition to become residents of the Seoul Global Startup Center, which Seoul will finance and start-up incubator Rehoboth will manage. The 40 ultimate winners will have access to various support programs including office space at the start-up center and consulting by experts.
Seoul is trying to promote itself globally as the new, hip and most technologically advanced city in Asia. That is drawing foreigners to try and do IT business here or expand their current businesses to Korea. In the past, most foreigners working in Korea were in factories or teaching.
“The other start-ups that I’ve talked to share a similar keen interest in Korea,” said Pulzze System CSO Lee. “Korea’s overseas image has become favorable especially with its strong IT infrastructure including high-speed broadband services and wifi connections. But also because of diverse and unique businesses and products generated by leading IT companies like Kakao.”
The Science, ICT and Future Planning Ministry said many contestants in the K-Startup Grand Challenge considered Korea the perfect test bed thanks to its advanced IT infrastructure and the country’s large number of tech savvy early adaptors. The Korean government also encourages companies to view Korea as a bridge in expanding to other Asian markets and has shown strong interest in cooperating with leading Korean companies.
The trend is expected to grow since the number of foreigners living in Korea has steadily risen, reaching 2 million for the first time this year. As of July there were 2.03 million foreigners living in Korea with 73 percent living here for longer than 90 days.
“Compared to six or seven years ago, a lot of foreigners are drawn here as a result of Korean cultural products,” said Ben Hough, co-founder of Shuttle Bus, a food delivery service in Korea. “They come here to study or teach but what they actually want is to do something [a business] here.”
Foreign start-ups admit that trying to create a business or expand into Korea isn’t easy, especially due to the complicated and difficult visa system. This issue was raised by experts in early 2013 when President Park Geun-hye’s administration kicked off its so-called creative economy initiative, whose goal is to wean the Korean economy away from traditional manufacturing and exports and push it into more advanced high-tech areas.
Visas are not the only problem. Other serious issues include the consistent problem of ActiveX, a Microsoft software framework that has prevented other web browsers or mobile device users accessing various Korean websites.
BY LEE HO-JEONG [email@example.com]
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