A backbone of Korea’s start-up industryThe spring has come, but many young people cannot enjoy the spring blossoms as they haven’t found the job they want. When other countries are seeking their own interests in the fourth industrial revolution, Korea may be the only one still not with plans.
Statistics show that every year, technology startups create 300,000 new jobs. But in reality, many of the startups don’t last long and close within a few years. Young people are reluctant to start their own businesses, and parents discourage them as well. The OECD average of the startup Death Valley survival rate, remaining in business after five years, is 46 percent, but the rate is only 30 percent in Korea. It is regrettable that many of the companies that even received government assistance fail in the Death Valley.
These companies fall due to shortage of initial funding as they were in the stage of selling products. If companies with competitive technology and high likelihood of survival are screened and provided with sufficient funding, they will be able to create quality jobs. It is similar to the demographic planning to not only boost fertility rate but lower infant mortality rate.
The Korea Technology Finance Corporation is a specialty financing agency that conducts over 560,000 cases of technology assessment. Half of the staffs have engineering backgrounds, and one third have Ph.D.s. The corporation is equipped with outstanding technology evaluation capacity compared to other financial institutions or venture capitalists.
Every year, the government allocates 2.6 trillion won ($2.28 billion) on the direct employment programs such as youth internship, but these jobs are only maintained while budget is provided.
Helping competent technology companies survive the Death Valley would let them create quality and sustainable jobs.
The Korea Technology Finance Corporation guarantees companies 10 times the government assistance, so it will bring greater impact than direct government assistance.
*Chairman of the board, Korea Technology Finance Corporation