004b 2013startupconference sbc hyun
DESCRIPTION
Política de promoción o fomento de empresas nacientes en KoreaTRANSCRIPT
September 25, 2013
APEC Start-up Conference Ⅱ
Korea’s Start-up Promotion Policy - Young Entrepreneurs Start-up Academy -
I Korea’s Economic Growth and Role of SMEs
II Importance of Youth Start-ups
III Korea’s Youth Start-up Promotion Policy
Young Entrepreneurs Start-up Academy IV
Contents
- GNI(Gross National Income): (1953) $67 → (2012) $22,720
Korea has transformed from one of the poorest countries into one of the tenth largest economies in just about 50 years of economic development.
The economy has grown 300 times in 60 years since the establishment of Korean government.
’96 ($12,518)
’07 ($21,632)
As i an Ec o n o m ic
Cr is is ($7,607)
1st( `73) & 2nd( `79) Oil S h o c k s
Oly m p ic Ga m e s
( 1988)
5 - Ye a r P la n fo r Ec o n o m ic
De v e lo p m e n t ( 1962~1981) Ko r e a n Wa r
( 1950~1953)
Fin a n c ia l C r is is
( $17 , 041)
Rapid Growth → Economic Stability
(1970s~1980s)
Transition (1990s)
Mature Stage (2000s~)
Industrialization (1960s)
’48 ’55 ’65 ’75 ’85 ’95 ’05 ’12
Fis c a l C r is is (2012)
($22,720)
K orea’s Economi c Growth and Rol e of SMEs Ⅰ.
Devel opment of t he K orean Economy 1
- 1 / 2 1 -
Gov . Establishment
( 1948)
No. of Businesses No. of Employees Added Value
■ SMEs: (1980) 29,779 (96.6%)
→ (2010) 112,897 (99.5%)
* Large Companies: (1980) 1,044 (3.4%)
→ (2010) 618 (0.5%)
■ SMEs: (1980) 1,000,000 (49.6%)
→ (2010) 2,289,000 (77.1%)
* Large Companies: (1980) 1,015,000 (50.4%)
→ (2010) 679,000 (22.9%)
■ SMEs: (1980)KRW 4.2 trillion(35.2%)
→ (2010)KRW 215.7 trillion47.4%)
* Large Companies: (1980)KRW7.7 trillion(64.8%)
→ (2010) KRW 239 trillion(52.6%)
267 422
1,000
1,864 1,962
2,289
135 439
1,015 1,156
690 679
1963 1970 1980 1990 2000 2010
(Unit : thousand)
18 073 23 406
29 779
67 679
97 379
112 897
237 708
1 044 1 193
731 618
1963 1970 1980 1990 2000 2010
SMEs Large Companies
52,8%
28,5% 35,2%
44,3% 52,2% 47,4%
47,2%
71.5% 64,8%
55,7% 49,8% 52,6%
1963 1970 1980 1990 2000 2010
중소기업 대기업
Ⅰ. K orea’s Economi c Growth and Rol e of SMEs
- 2 / 2 1 -
Growi ng St atus of SMEs 2
Source of Technological Innovation
- 3 / 2 1 -
Key to National Economic Growth
R&D budgets of SMEs have grown to a 18.6% of annual average since the year of 2005.
* Much higher compared with large companies (10.5%) and medium companies (9.6%)
Job Creation
SMEs created 320,000 new jobs in a decade (1999~2009) .
(Unit: thousands)
Growth Rate of R&D Budgets No. of Employees (with 5 or more employees) (Unit: KRW 100bn) Added Value (with 5 or more employees)
Added value from SMEs has continually increased in a decade (1999~2009), making bigger contributions than large companies.
* Added value contribution rate (2009) - SMEs: 50.5%, - Large Companies: 49.5%
Rol e of SMEs 3
Ⅰ. K orea’s Economi c Growth and Rol e of SMEs
`99 `09 `99 `09
678
648
1,830
2,150
4.5%↓
Large Companies
Medium Companies SMEs
10.5% 9.6%
18.6%
1,038
1,945
971
1,982 87.4%↑ 104.1%
`99 `09 `99 `09
17.5%
(2005~2010 Annual Average)
Large Companies SMEs Large Companies SMEs
* Large companies saw a decrease of 30,000 jobs
The number of new businesses is on the rise in recent years, but youth start-ups have been slowing down.
Korea’s entrepreneurship index has been on a declining trend.
Youth joblessness, being twice higher than national unemployment, has become a social issue.
Im p o r t a n c e o f Yo u t h S t a r t - u p s II .
Yo u t h Un e m p lo ym e n t
2.0
4.0
6.0
8.0
10.0
`09 `10 `11 `12.1 `12.6
- 4 / 2 1 -
Ent repreneursh i p Index CEOs i n t hei r 20s and 30s
0
20
40
60
80
0
20
40
60
80
`03 `05 `07 `09 `11
Star
t-up C
EOs
under
30s
(%
)
(Source: SMBA)
(47.6%)
(18.3%)
(53)
(65)
- Young people afraid of failure and taking chances
`00 `09 `00 `09 `00 `09
(11th)
(16th) (19th)
(13th)
(6th)
(3th)
(Source: Donga Ilbo Entrepreneurship Center-Deloitte Consulting)
- Downward in innovative start-ups, but upward in self-employed for a living
Unem
plo
ymen
t ra
te (%
)
(7.6)
(8.1)
(3.6) (4.2)
(Source: Statistics Korea)
- Preference for government jobs and large companies
(7.7)
(3.2)
(8.5)
Inc reas i ng jobs and encouragi ng ent repreneursh i p t hrough yout h s t ar t - ups N
o. o
f st
art-
ups
(thousa
nds)
Break through i n Cur rent Economi c Di f f i cu l t i es 1
Unemployment (Total)
Unemployment (Youth)
No. of start-ups CEOs under 30s
- 5 / 2 1 -
< Empl oyment / St ar t - up Rat i o and L i fet i me Income >
•Annual sal ary of co l l ege- grad- ent ry - l evel jobs : Large f i rms (K RW 3.5m) , Medi um f i rms (K RW 3m) Smal l f i rms (K RW 2.25m) , Government f i rms (K RW 2.8m)
( Job c reat i on)
II. Im p o r t a n c e o f Yo u t h S t a r t - u p s
Dr iv in g fo r c e o f In c o m e a n d J o b Ge n e r a t io n 2
Annual Income
K RW 100m
30 35 40 45 50 55 60 Age
Success fu l s t ar t - up bus i nesses Empl oyment St ar t - up
Empl oyment = Star t - up
Empl oyment
Star t - up
Ret i rement
Fai l ure
Lay - Off
Fai l ure
- 6 / 2 1 -
Nur tur i ng i nnovat i ve ent repreneurs by promot i ng youth s tar t - ups
- Innovat i ve young ent repreneurs : l eaders o f job c reat i on and c reat i ve des t ruc t i on
Inventor
Promoter
Entrepreneur
Manager
Creat i v i t y
High
Low Managerial skills and networks Lo w High
A t h r u s t o f k n o wle d g e / c r e a t ive e c o n o m y ( Ne w Ko r e a n Go ve r n m e n t P o l ic y ) b a s e d o n s c ie n t i fic a n d t e c h n o lo g ic a l a d va n c e m e n t Cr e a t ive s t a r t - u p s e xp lo r in g t h e b lu e o c e a n
Ad va n c in g Ch a lle n g e r En t r e p re n e u r s h ip 3
II. Im p o r t a n c e o f Yo u t h S t a r t - u p s
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III . K orea’s Youth Star t - up Promot i on Pol i cy
Grants Loans Investments
Type Grants for opening a business
and developing technology
Loans for particular policy
(e.g. start-up promotion)
Investments for expected
returns
Repayment responsibility
Low (none) High
(principal and interest) Medium
Period 1 ~ 2 years 3 ~ 10 years 5 ~ 10 years
Key components
- Young Entrepreneurs Start-up Academy - Business Incubation College - Start-up Tailored Program
- Young Entrepreneurs Loan
- Venture Start-up Loan
- Small Merchant Loan
- Young Entrepreneurs Investment
- Start-up Angel Investment
- Hybrid Financing
P o lic y Dir e c t io n
Building infrastructure that harnesses any entrepreneurs with ambition and marketable technology
Creating an environment for advancing entrepreneurship and giving second chances
Programs
Pol i cy Di rec t i on and Programs 1
Realization of S ta rt- up ( KRW 1 2 9 b n )
- 8 / 2 1 -
Start- up
• 16 programs • K RW 187bn
Start- up Training (K RW 11.5bn)
• Teenager Biz School: from elementary to high school students
• Start-up School: prospective entrepreneurs and businesses less
than 1 year old
•Biz Incubation College: prospective entrepreneurs &
businesses less than 1 year old
•Young Entrepreneurs Start-up Academy: entrepreneurs under 39
•Start-up Tailored Program: prospective entrepreneurs and
businesses less than 1 year old
•Research Start-ups: scientist-turned entrepreneur(s)
•Leading Venture Start-ups: prospective entrepreneurs and
businesses less than 1 year old
•Global Youth Start-up : prospective entrepreneurs and
businesses less than 6years old
• Start-up Capability Building Training: prospective entrepreneurs
over the age of 40
• Senior Biz Plaza: prospective entrepreneurs over the age of 40
S enior S ta rt- up ( KRW 1 . 5 b n )
• Start-up Infrastructure: members of business incubators
• Commercialization: one-person business
• App Factory: prospective entrepreneurs and businesses less than 1 yr old
Others ( KRW 4 5 b n )
Gr a n t s 2
Ⅲ. Ko r e a ’s Yo u t h S t a r t - u p P r o m o t io n P o lic y
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Major Star t - up Grants (Real i zat i on of Star t - up)
Purpose Eligibility Total
Budget (2013)
Implementing authorities
Business
Incubation
College
Overview: 18 colleges providing entrepreneurs with packaged
services for each preparation phase to start up a business
Service: business launch; training; mentoring; office space, etc.
* Grants: within 70% of individual project costs, up to KRW 50m
Prospective
entrepreneurs ;
businesses less
than 1 year old
40.2 18 colleges
Young
Entrepreneurs
Start-up
Academy
Overview: a one-stop shop for entrepreneurs under the age of 39
with high technology; and businesses less than 3 years old
Service: business launch; training and coaching; office space;
equipment for product development, etc.
* Grants: within 70% of individual project costs, up to KRW 100m
Prospective
entrepreneurs
under the age of
39; businesses less
than 3 years old
25.4 SBC
Start-up
Tailored
Program
Overview: supporting product/technology commercialization via
colleges and other relevant organizations
Service: prototype production; marketing activities, etc.
* Grants: within 70% of individual project costs, up to KRW 50m
Prospective
entrepreneurs;
businesses less
than 1 year old
50
Colleges and
private
institutions
(KR W b i l l io n )
Ⅲ. Ko r e a ’s Yo u t h S t a r t - u p P r o m o t io n P o lic y
- 1 0 / 2 1 -
Loans for start- ups (KRW 1.43 tri l l ion)
• Venture Start-up (KRW 1.27 trillion): SMEs less than 5 years old
• Young Entrepreneurs (KRW 160bn): Entrepreneurs under the age of 39;
SMEs less than 3 years old
Purpose Eligibility Interest rate
Total budget
Loan Limit
Venture Start-up Loan
Facilities, Equipment and working capital Businesses less than 5 years old
3. 29% 1,270 KRW 3bn
Young
Entrepren
eurs Loans
Flexible
repayment
Working capital
(manufacturing, knowledge-based
services, and cultural contents industries)
Entrepreneurs under 39; businesses less than 3 years old
2. 70% 80 KRW 100m
Matching with
private lenders
Working capital
(manufacturing, knowledge-based
services, and cultural contents industries)
Entrepreneurs under 39; businesses less than 3 years old
2. 70% 80 KRW 100m
Ⅲ. Ko r e a ’s S t a r t - u p P r o m o t io n P o lic y
Lo a n s 3
(K RW bi l l i on)
- 1 1 / 2 1 -
Mechanism of Young Entrepreneurs Loan
Lending up to KRW 100m for start-ups
Failure in business
Bona Fide (Debt relief)
Moral hazard (Credit delinquents)
Success in business Regular repayment (5-year installment plan)
Start-up consultancy
Due diligence for debt relief
Debt-equity swap (if the business is most likely to turn around)
Up to 100% of the principal may be relieved.
Young Entrepreneurs Loan → Minimizing the fear of failure
Fixed annual interest rate of 2.7%
Repayment obligation (past-due interest)
Ⅲ. Ko r e a ’s Yo u t h S t a r t - u p P r o m o t io n P o lic y
- 1 2 / 2 1 -
Fund Management Mechanism
Fund of funds
Public org./College/ Research institutes
Angel Investment Matching
Fund
Start-ups
Angel investors
Angel Investment
Support Center
Invest
Matching /Investment & returns
Investment and returns
Follow-up support
Services
In ve s t m e n t s 4
Ⅲ. Ko r e a ’s Yo u t h S t a r t - u p P r o m o t io n P o lic y
Yo u n g En t r e p r e n e u r s In ve s t m e n t Fu n d ( Ko r e a Ve n t u r e In ve s t m e n t C o r p )
Fu n d S iz e : KR W 1 2 0 b n
El ig ib i l i t y : y o u n g e n t r e p re n e u r s u n d e r 3 9
In v e s t m e n t u p t o KR W 0 . 5 ~1 . 5 b n p e r b u s in e s s
An g e l In ve s t m e n t Ma t c h in g Fu n d ( KVIC )
Fu n d s iz e : KR W 3 5 0 b n
El ig ib i l i t y : p ro s p e c t iv e e n t r e p re n e u r s ,
b u s in e s s e s le s s t h a n 3 y e a r s o ld
In v e s t m e n t u p t o KR W 3 0 0 m p e r b u s in e s s
Hyb r id F in a n c in g ( S B C ) Gro wt h - s h a r in g : KR W 4 0 b n (C B p u rc h a s e )
P ro fi t - s h a r in g : KR W 1 1 0 b n
(S u p e r - lo w in t e r e s t r a t e lo a n s u n d e r t h e c o n d i t io n o f
s h a r in g in a s l ic e o f o p e ra t in g p e r fo rm a n c e )
- 1 3 / 2 1 -
Yout h and h i gh- t ech s t ar t - ups have dec l i ned sharp l y despi t e s t eadfas t i nc reases i n s t ar t - ups .
No. of start-up SMEs Venture CEOs in their 20s & 30s
No. of start-ups in high-tech manufacturing
C o m p r e h e n s ive p a c k a g e o f fin a n c e , t r a in in g , c o a c h in g , o ffic e s p a c e , p r o d u c t d e ve lo p m e n t e q u ip m e n t , a n d fo l lo w- u p s e r v ic e s ( m a r k e t in g a n d lo a n s ) is n e c e s s a r y t o o ve r c o m e u n c e r t a in t ie s a t t h e b e g in n in g o f b u s in e s s s t a r t - u p .
Promoting youth high-tech start-ups + Generating jobs for youth + Addressing aging SME CEOs
Young Entrepreneurs Start-up Academy opened in March, 2011.
Ⅳ . Young Entrepreneurs Start-up Academy
Ba c k g r o u n d 1
* Fear of fai l ure dec rease i n youth s tar t - ups ag i ng CEOs of SMEs economi c growth potent i al t hreatened
- 1 4 / 2 1 -
Loans (po l i cy fund)
Providing loans to SMEs - Business start-ups (prospective start-ups, SMEs, venture businesses), new growth, commercialization of R&D results and business conversion loans - Emergency business stabilization, small merchants and hybrid financing
Developing HR for SMEs and promote start-ups by young entrepreneurs - Enhancing management skills of CEOs (CEO course) and capabilities of employees - Running the young entrepreneurs start-up academy
Ma rk e t in g
HR (HR d e v e lo p m e n t )
Supporting early stages marketing and global cooperation - Bolstering local and overseas marketing of SMEs’ products: (domestic) HIT500, (overseas) trade delegations, etc. - Korea Desks(Malaysia, Indonesia), SME Support Center (Qingdao), Industrial Coordinators (U.S., Japan, Germany and Dubai)
Technology (consul tancy, et c .)
Resolving problems through company diagnosis and mismatch of jobs for SMEs - Providing tailored support through company diagnosis (consulting, foreign employment support, etc.) - Addressing job mismatch by improving likability of SMEs to young job seekers (Smile Story)
SBC’s 33 ye a r s o f e xp e r t is e in S ME s u p p o r t Ze r o in o n yo u n g e n t r e p r e n e u r s s t a r t - u p s
Ⅳ. Yo u n g En t r e p r e n e u r s S t a r t - u p Ac a d e m y
- 1 5 / 2 1 -
Establishment
Research projects
Helping start-ups head off Death Valley
Success rate of R&D commercialization in Korea: 10-40% (past 2 years: 37.7%)
(UK: 70%, USA: 69.3%, Japan: 54.1%)
Overcome Deat h Val l ey
< Young Entrepreneurs Start-up Academy > •Technology development & loans
•Specialized training & 1:1 coaching
• One-stop services for
Marketing & HR management •Government fund
- Loan: K RW 3.8t r i l l i on - Guarant ee: K RW 57.2t r i l l i on
•Inves t ment •Pr i vat e funds
•Government R&D (KRW 16 trillion) •P e r s o n a l In ve s t m e n t (KRW 30-100m)
Fi nanc ing
Easy
Di f f i cu l t Devel opment / pro t ot ype Commerc i al i zat i on Bas i c research
Rol e o f Young Ent repreneurs Star t - up Academy 2
Ⅳ. Yo u n g En t r e p r e n e u r s S t a r t - u p Ac a d e m y
- 1 6 / 2 1 -
Budget
Eligibility
K RW 25.4bn for 2013 (K RW 20bn i n 2012)
Ages under 39; CEOs whose s t ar t ups are 3 y rs or l ess * Te c hno log y - inte nsive SMEs tha t stre ng the n job a nd va lue c re a tion (ma nufa c turing a nd knowle d g e se rvic e s)
Support
System
Operat i on and Process 3
Ⅳ. Yo u n g En t r e p r e n e u r s S t a r t - u p Ac a d e m y
70% of the total expenses up to KRW 100 mil
R&D Grants
Office, R&D rooms, etc.
Space
Entrepreneurship + practical skills
24 Experts 1:1 coaching
Loans, investment, marketing, etc
L i nk s Educat i on Coaching
- 1 7 / 2 1 -
K orea’s a n u n p a r a l le le d one- s top (one- roof) s t ar t - up suppor t pack age
for young ent repreneurs - Prov i d i ng comprehens i ve suppor t i ng t ool s t o i nc rease h i gh- tech s tar t - up and
i mprove t he success rate
Focus on fos t er i ng qual i f i ed ( fu t ure- or i ent ed) young CEOs - Zoomi ng i n enhanc i ng CEOs ’ at t i t ude and abi l i t i es as wel l as t hei r success i n new produc t devel opment
A dropout sys tem ( t wo m i d- t erm t es t s , bot t om 10% of t rai nees depar t ed)
- Guaranteei ng t he fu l l i ndependence t o t rai nees but ru l i ng out undevoted t rai nees by
i n t er i m eval uat i on
eval uat i ons Fol l ow up Serv i ces - Cont i nui ng pos t - graduate suppor t s Trac i ng bus i ness records i n a span of 5 years af t er graduat i on * Reward i ng d i s t i ngui shed graduates wi t h an addi t i onal l oans up t o K RW100 mi l for one year
Bo
ostin
g su
ccess rates
Diffe r e n t ia t e d Fe a t u r e s 4
Ⅳ. Yo u n g En t r e p r e n e u r s S t a r t - u p Ac a d e m y
- 1 8 / 2 1 -
- Regi onal expans i on: ( ’11) An s a n a c a d e m y ( ’12) Gwa n g u , Ky e o n g s a n , Ch a n g wo n
Class 2011 Class 2012
Ansan center 188 167
Regional centers 24 46
Total 212 213
Ma jo r a c h ie v e m e n t s fo r t h e p a s t t wo y e a r s
No. of start-ups 212 213
Revenues KRW 47bn KRW 14.1bn
No. of new jobs 757 686
No. of new intellectual property rights
793 584
- All g r a d u a t e s h a ve s t a r t e d u p t h e ir b u s in e s s e s , p o s t in g s t r o n g r e ve n u e s a n d c r e a t in g n e w jo b s .
Ma jo r Ac h ie v e m e n t s 5
Ⅳ. Yo u n g En t r e p r e n e u r s S t a r t - u p Ac a d e m y
Ⅴ. Case Study
The Hi ve 1
Company Profi l e Produc t : El ec t r i c sc rewdr i vers
Pres i dent : Sang- mi n Lee (27, jun i or year i n co l l ege)
Es tabl i shed: Jan 3, 2012
Jobs c reated: 19
Sal es : $1.8 m i l (2012) $ 4 . 6 m il ( 2 0 1 3 ) $ 9 . 2 m il ( 2 0 1 4 )
P ro d u c t la u n c h e d in : J a p a n , Ko re a
Achi evements
In v e s t m e n t a t t r a c t e d : $ 4 6 2 , 0 00 (S B C g ro wt h s h a r in g )
C u t e p ro d u c t d e s ig n
R e c h a rg e a b le b y US B c a b le ( la p t o p s , c e l l p h o n e c h a rg e r s , c a r s , a t h o m e )
Success Factors
At t r a c t iv e p r ic e s ($ 3 0 wit h l i t h iu m p o ly m e r b a t t e r ie s , J a p a n e s e Ma b u c h i m o t o r )
Hig h p e r fo rm a n c e ( s c r e w/ u n s c re w 4 0 0 s c r e ws t h ro u g h 9 0 - m in u t e r e c h a rg e )
- 1 9 / 2 1 -
JD Sound 2
Company Profile P ro d u c t : P o r t a b le DJ in g e q u ip m e n t
P re s id e n t : He e - c h a n Kim (3 7 , c o l le g e g ra d u a t e )
Es t a b l is h e d : Ap r i l 2 2 , 2 0 1 1
J o b s c r e a t e d : 8
S a le s : $ 1 m il ( 2 0 1 2 ) $ 4 . 6 m il ( 2 0 1 3 ) $ 1 3 m il ( 2 0 1 4 )
P ro d u c t la u n c h e d in : US A, C a n a d a , La t in Am e r ic a , EU
Achievements
In v e s t m e n t a t t r a c t e d : $ 4 6 2 , 0 00(S B C g ro wt h s h a r in g )
On e o f t h e wo r ld ’ s fi r s t p o r t a b le DJ in g e q u ip m e n t
Success Factors
IF De s ig n Awa rd (2 0 1 2) , Go ld Me d a l a t t h e US A In t e rn a t io n a l In v e n t io n Fa ir ( 2 0 1 2 )
Glo b a l d is t r ib u t io n a g re e m e n t wi t h US Mo n s t e r Gro u p ( J u ly , 2 0 1 3 )
R e c h a rg e a b le b a t t e r ie s , S D- c a rd r e c o rd e r , n o n - p ro fe s s io n a l DJ in g e q u ip m e n t
Ⅴ. Ca s e S t u d y
- 2 0 / 2 1 -
Publ Stud i o 3
Company Profile P ro d u c t : Ed u c a t io n a l g a m e s , in t e r a c t iv e b o o k a p p s
P re s id e n t : Ha e - wo n Le e (3 4 , c o l le g e g ra d u a t e )
Es t a b l is h e d : Ap r i l 1 8 , 2 0 1 1
J o b s c r e a t e d : 2 6
S a le s : $ 2 7 7 , 00 0 (2 0 1 2 ) $ 1 . 8 m il ( 2 0 1 3 ) $ 1 8 m il ( 2 0 1 4 )
Ma jo r c l ie n t : F in la n d ’ s R o v io
Achievements
In v e s t m e n t a t t r a c t e d : $ 0 . 9 m il ( v e n t u re c a p i t a l )
In t e r a c t iv e fe a t u re s , u n l ik e o t h e r e - b o o k s
Success Factors
P a r t n e r s h ip a g re e m e n t wi t h Fin la n d ’ s R o v io (Ma rc h , 2 0 1 3 ) De v e lo p e d c o n t e n t s fe a t u r in g An g ry
B ird s c h a ra c t e r s P u b l is h e d b y R o v io
B e s t - s e l l in g p a id e d u c a t io n a p p in Ap p le ’ s Ap p S t o re ; 5 t h p la c e in a l l a p p s in t h e s t o r e
S t r a t e g ic a r t is t s a n d c r e a t iv e p ro g ra m m e rs ; C EO wh o s t u d ie d fi lm in US A
Ⅴ. Ca s e S t u d y
- 2 1 / 2 1 -