Gov’t pledges 113.5 billion won for bio start-upsThe Korean government will establish a 113.5 billion won ($102.2 million) fund for start-ups in the bio sector in hopes of attracting more entrepreneurs to the industry and helping them through the early stages of their business.
Prime Minister Hwang Kyo-ahn, currently serving as acting president of the country, finalized the plan at a meeting with government ministers on Monday in central Seoul.
While the government has pointed to biological sciences as an important industry with high potential, it is also one where entrepreneurs have great difficulty attracting investment due to the nature of the business. Research and development usually requires massive long-term costs, but the rate of business success is low, meaning investors face high risk.
A new biological drug, for instance, which takes about 10 to 15 years to develop, requires backing of at least a trillion won. But such an investment could end in vain. Many industry sources say the chances of developing a new drug are less than 3 percent.
“To overcome the unique characteristics of the bio industry, the government is giving support to these start-ups so more entrepreneurs can get into the industry,” Hwang said.
The Small and Medium Business Administration, a government agency, will contribute 75 billion won, and the Ministry of Trade, Industry and Energy will provide the rest. The government said it will likely set aside 30 percent of the fund for early stage start-ups.
A separate fund of 11.4 billion won will help connect doctors at hospitals with researchers in the bio industry to establish start-ups.
The government is considering incentives for large biopharmaceutical companies that establish venture capital funds to support start-ups using their already established corporate infrastructure.
BY KIM JEE-HEE [firstname.lastname@example.org]
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