The Startup Ecosystem of South Korea

South Korea is a nation with a proven track record of building outstanding global corporations while also creating an impressive amount of tech unicorns, such as the ecommerce site Coupang. The country’s biggest advantage is global companies (such as Samsung and LG) that have given the country a leading position in manufacturing and in industries that require hardware engineering. These large companies also provide investment and support to local entrepreneurs. For example, in 2023 Samsung’s support manifested in the opening of an AI startup incubator in Gwangju. International companies have also recognized the startup potential of South Korea and established a presence with initiatives such as Google Campus and Innovation Lab Korea, powered by Facebook.
On the other hand, the corporate culture paired with an abundance of high quality, respectable jobs might also keep potential entrepreneurs working as employees instead of venturing to build their own startups. The government is well aware of this challenge, and is investing heavily in startups, as well as creating regulatory sandboxes that decrease legal risks for entrepreneurs. Second chance startup initiatives have also been established as a measure of minimizing the cost of failure for entrepreneurs and providing support through incubation and mentorship. South Korean startups benefit from some of the most forward thinking and comprehensive government support in the world. Foreign entrepreneurs looking to benefit from this support are welcomed and encouraged by the OASIS Visa and by a number of dedicated support facilities. The Government’s long established Korean Fund of Funds is worth billions, and has become a critical component of the startup ecosystems of South Korea. Moreover, in 2023 the public sector announced a new fund of 50 billion South Korean Won for space startups. At the same time, the private sector is doing its share; VCs are investing more every year.
The country prides itself on several strong startup hubs, most notably in Seoul and Busan. With support from their local governments (The Seoul Metropolitan Government and Busan Metropolitan City), as well as organizations such as the Busan Economic Promotion Agency, we have seen the two cities gain more and more international recognition over the past few years. While steps have been taken in the right direction, the main challenge for South Korea remains encouraging potential entrepreneurs to embrace risk and create startups as an alternative path to the norm of climbing the corporate ladder. South Korean startups are finding it difficult to target global markets, and until this changes, it will be hard for the country to reach its massive startup potential.