Seoul Aims to be one of the World’s Leading Startup Hubs by 2020

Seoul Ripe for Startups

South Korea is the world’s 12th largest economy and the fourth biggest exporting nation. Exports comprised 44 percent of the Korean economy in 2018 according to Globaledge. Major corporations have benefited from this substantial increase in exports over the last decade. As a result of this the large predominantly family-run business conglomerates, also known as “chaebol,” have risen to dominate the economy. In addition, they have a great influence on the political scene. To name a few, Samsung, Hyundai, and LG all have grown into behemoths and are international household names. With larger corporations dominating the Korean economic landscape, Korean startups tend to be an afterthought.

Seoul Mayor
Seoul Mayor Park Won Soon

However, earlier this year Park Won-Soon, the mayor of Seoul, stated that the government will invest up to five trillion won by 2022. The aim is to transform Seoul into one of the world’s leading startup hubs. One investment is its innovation academy, which is a series of programs to help develop thousands of IT professionals. Furthermore, funds will also be allocated to supporting and fast-tracking startups through financial assistance. Furthermore, they will allocate office space and the necessary infrastructure at a reduced cost to new businesses. Therefore, this would help address Korea’s high youth unemployment rate and break the cycle of larger venture capital firms focusing solely on ROI (return on investment).

The Korean Government’s Role in Supporting Startups

Traditionally, the funding style in Korea has had a focus on fueling local services rather than more complex technologies (core tech) as the former tends to hit profit targets faster. To allow suitable opportunities for Korean startups to grow, the Korean government will need to support burgeoning startups in their infancy when they are most financially vulnerable. The chaebols reported an average 50% decline in annual profits this year. Therefore the economic landscape of Korea presents fertile ground for South Korean startups to flourish. In addition to this, Seoul’s recent push to become a “smarter” city will certainly make room for new innovative ideas.

Korea’s Smarter Future

The Jeju forum took place earlier this year. One of the key points of discussion was the relationship between smart cities and startups. Ms. Waltraut Ritter, the Founder of the Knowledge Dialogues in Hong Kong, noted that traditionally top-down government perspectives are often used in discussions relating to developing smart cities. She went on to say that the bottom-up approach may be more effective as the “citizens are the core and owners of a city.” She described startups as “Citypreneurs” who play a fundamental role in smart city development. Today’s citizens have a wealth of new technology at their disposal which in conjunction with government cooperation can foster promising results.

Korea’s first smart city

A city gets the classification of “smart” when people try to mitigate the inevitable difficulties that come with living in a city. From traffic flows to pollution volume these problems are analyzed and a solution is created based on data. With Korea’s rising city populations, it’s no wonder they have had a push recently towards developing “smarter” cities and the attractive benefits it presents. South Korea is not alone in this development.

The UN stated that nearly 70 percent of the world’s population will be migrating to cities for economic opportunity by 2050. With this influx of people comes concerns about efficiency and liveability with increasing population densities. In response to this, the Korean government recently brought to life their “city in a box”, formally known as Songdo. Songdo neighbors Seoul and is one of the world’s first truly “smart” cities.

songdo

Smart City: Songdo

Songdo is built on approx.1,500 acres of land near Seoul. It has all the “bells and whistles” that one would expect with a smart city. Some key features include

  • a waste system that sucks garbage from home kitchens
  • a central processing center
  • sensors that monitor the temperature
  • traffic flow sensors
  • bus arrival alerts

The innovations in Songdo took into account the environmental impact. These include a water recycling system that prevents clean drinking water from being used to flush toilets. In addition, there are charging stations for vehicles and renewable energy created from recycling household waste.

To foreign eyes, Songdo may seem like it was pulled out of a sci-fi novel. However, it has certainly set the bar for how to model a “smart city.” Initially, it was met with empty apartments and empty streets, but slowly the city is taking a turn for the better. Therefore, the Korean government’s goal to become one of the leading players in this space will likely lead them to tap into the ingenuity of their best and brightest startups.