korea’s incubation policy - oecd

Korea’s Incubation Policyfor the

Environmental Venture Companies

Dr. Soung-An, Kwon

Korea Environmental Industry and Technology Institute (KEITI)

| Green Growth Korea |

| 2009 OECD Global Forum on Eco-Innovation, November 4-5 |

Contents

Environmental Industry Overview

Environmental Industry Policy

Comprehensive Support System (KEITI)

Green Industry Complex Cluster

1

2

3

4


Definition of the Environmental Industry1-1

Status of the Environmental Industry1-2

Environmental Venture Companies1-3


1. Environmental Industry Overview in Korea

1-1 Definition of the Environmental Industry

Definition of the Environmental Industry

Category of the Environmental Industry (OECD/Eurostat)

• The Goods and Service that Can Measure, Prevent, Control, and Minimize the

Environmentally Hazardous Factors [Air Pollution, Water Pollution, Waste,

Noise pollution, Soil Contamination, etc]

• The Goods and Service Minimizing the Environmental Hazard, Pollution, and

Resource Use

• Pollution Management Group

- Manufacturing, Construction, Distribution, Service

• Cleaner Technologies and Products Group

- Manufacturing

• Resource Management Group

- Manufacturing, Construction, Distribution, Service


1-2 Status of the Environmental Industry

Year 2003 Year 2005 Year 2006 Year 2007Year 2004

Korea’s Environmental

Industry Market

(CAGR :15.8%)

Korea’s G D P

(CAGR : 5.9%)


25,018 EA

26,504 EA

28,198 EA

23,036 EA

No. of Company

(CAGR : 11.8%)

767.1 billion

826.9 billion

865.2 billion

908.7 billion

975.0 billion USD

21.4 billion

23.9 billion

29.2 billion

34.1 billion USD

19 billion

• Environmental Ventures Take Up 2.1% (416) of the Total Ventures (19,068)

• The Sales Revenues of the Most Environmental Ventures are

Between 1 million USD and Less than 5 million USD

Environmental Venture Companies Overall Venture Companies

13 8

73

38

217

38 29

0.00

50.00

100.00

150.00

200.00

250.00


2635

311

2097 2311

7401

2112 2201

0

1000

2000

3000

4000

5000

6000

7000

8000Co

mp

an

y N

o

Co

mp

an

y N

o

Sa

les

• Less than $50,000 : 13 Companies

• $50,000 - $100,000 : 8 Companies

• $100,000 - $500,000 : 73 Companies

• $500,000 - $1,000,000 : 38 Companies

• $1,000,000 - $5,000,000 : 217 Companies

• $5,000,000 - $10,000,000 : 38 Companies

• Over $10,000,000 : 29 Companies

• Less than $50,000 : 2,635 Companies

• $50,000 - $100,000 : 311 Companies

• $100,000 - $500,000 : 2,097 Companies

• $500,000 - $1,000,000 : 2,311 Companies

• $1,000,000 - $5,000,000 : 7,401 Companies

• $5,000,000 - $10,000,000 : 2,112 Companies

• Over $10,000,000 : 2,201 Companies

1-3 Environmental Venture Companies

Sa

les

Trend of the Environmental Industry Policy2-1

R&D fund (Eco-Technopia 21 Projects)2-2

Environmental Venture Fund2-3


2. Environmental Industry Policy

Environmental Technology Business Incubator (ETBI)2-4

• R&D fund (Eco-Technopia 21 Projects, 2001-2010)

• Environmental Venture Fund (Since 2001)

• Environmental Technology Business

Incubator(Since 2001)

• KEITI established(2009.4)

* KEIST is Merged with KOECO *

• Environmental Industry Promotion Fund

( 8million USD, 2009 ~ )

• ‘Green’ Family Loan (2::9 ~)

• Export Promotion Support (2008 ~ )

2-1 Trend of the Environmental Industry policy


Since 2001 Since 2008 -

Past Present

• Issued Strategy for the Promotion of the ET Export (2005.12)

• Green Growth Policy Launched (2008.8)

2-2 R&D Fund : Eco-Technopia 21 Projects


Project Overviews

• Goal : Supporting the Development of Core

Environmental Technologies to Put Korea on a Par

with the Advanced Country in this Fields by 2010

•Period : 10 Years(2001-2010)

•Budget : about 1,435 million USD

[1,000 Million USD from the Government]

Description 1st Stage

(2001-2003)

2nd stage

(2004-2007)

3rd stage

(2008-2010)

Goal to Develop

Technologies

Technologies

to Handle

Current

Pollution

Medium and

Long Terms

Strategic

Technologies

Future

Oriented

Sourcing

Technologies

InvestmentCurrency :mill USD

•Total : 1,435

•Government :

1,000

•Private : 435

•Total : 280

•Gov. : 195

•Priv. : 85

•Total : 660

•Gov. : 460

•Priv. : 200

•Total : 495

•Gov. : 345

•Priv. : 150

Key Accomplishment

• Turnover totaled to about 1,559 million

USD as of June 2009 including

- 667 Cases of Product Sales at

Home and Abroad (662 million USD)

- 723 Cases of Installation Works

(about 897 million USD)

2-2 R&D Fund : Eco-Technopia 21 Projects

Successfully Accomplished Projects


• Catalyst PM and NOx Reduction System for Diesel Vehicles to Prevent

Harmful Emission

• Accumulated Turnover Reaching to 220 million USD by 2008

Company in charge of this Technology : SK Energy Co., Ltd.

• Substantial Reduction of Dioxin from in Incinerations.

• Contracts Awarded Amounting to about 5.8 million USD including the

Thermal Decomposition Facility at Unjeong in Paju City,

• Playing an Important Role in Generating about 250 million USD-

Worth Business Instead of Import

Company in charge of this Technology : Halla Energy & Environment Co., Ltd.

2-3 Environmental Venture Fund

Environmental Venture Fund


• ‘Industry Bank’ Capital : Eco Venture Fund (2::1.4, 6.4million USD)

• ‘Credit Guarantee’ Environmental Venture Fund (2::1.4, 4.:million USD)

• ‘Credit Guarantee’ Environmental Venture Fund (2::2.7, 8.8million USD)

• Estimation of Technology Commercialization at the Investment Banking Institute

• Retrieving the Investment and Capital Gain through IPO, M&A after Investment

Difficulties

Fund

Schemes

• Poor Performance of the Real Investment in the Environmental Industry with the

Created Fund.

• Reasons : *Uncertainty of the Short Term Profit and Profit Rate of the Environmental Industry

*Mismatch of Investment Conditions between a Domestic Environmental Companies

and Fund Operating Companies

• Poor Performance of the Funded Companies’ Commercialization and Business

• Reasons : * Rack of ‘CEO’s Management Skill at the Environmental Venture Companies

* Rack of Ability to Manage Various Risks Under a Bias toward the Technology

Oriented Management

2-4 ETBI* Overview


* ETBI : Environmental Technology Business Incubator

Services

Objectives

•Supporting Successful Commercialization of the Environmental Venture Companies

with the New Environmental Technology and Good Prospects by Selecting High-Potential

Environmental Venture Companies and Providing Comprehensive Incubation Services

• Providing Office Room with Charge and Comprehensive Commercialization Service

• Cultivating Non-Tenant Companies by Providing the Remote Support

* Non-Tenant Company: The Office of Company Not located in ETBI

• Supporting and Linking other Incubating Programs Implemented by Relevant Agencies

• Operating the Entrepreneurship Education and Seminar for the Start-up Companies

• Frequent Changes of the management Organization for ETBI

>> Difficulty to Accumulate the Experiences and Know-How for the Management

• Difficulty to Promote Environmental Ventures >>The Long-Term Support Needed for Profit

• Insufficient Support for the Long-Term Budget

Difficulties

2-4 ETBI Overview : Incubation Process

Public Notice

Application Submission

First Review

Secondary Review

Admission Approval(Contract Signing)

Moving In

Notice Period : 4 Weeks

Consultation and

Qualification Check

Screening of

Submitted Documents

Oral Presentation

(Evaluation Committee)

Incubation Period : 3 year

Can be extended within 2 year

After Graduation,

Supporting Service Provided

Target

Companies

Tenant Screening

• Screening Criteria : Entrepreneurship(30), Technology(30), Commercialization Potential(40)

Application Qualification : Founders or Start-up Companies

[Same for the Tenant and Non-Tenant Companies]

• The Companies Engaging in the Technology

Mainly Cultivated by Green Growth Policy

• Environmental Venture Companies

• Certified and Verified Companies with the

New Environmental Technology

• Certified Companies with Eco-Friendly Product • The Companies Participating in the National

Environmental Technology R&D Projects• Other Founders or Start-up Companies

Related to the Green Environmental Industry

Public Notice

Application Submission

Review

Admission Approval(Contract Signing)

Remote Support

Year-round

(Non-scheduled)

Consultation and Frequently

Application Receiving

Evaluation of the

Commercialization Potential

Incubation Period : 1 year

Non-Tenant Screening

Target

Companies

2-4 ETBI Overview : Incubation Support System

Supporting the Participation to the

Promising Exhibitions for the

Technology Development

Making PR Catalogs & Homepages

Supporting the Recommendation for the Technology Evaluation

Supporting to Utilize the networks

such as Venture Capital

Establishing the Supporting System and

Infra for the Tenant Companies

Supporting International Joint Research and the Feasibility Study

Supporting the Certification and

Verification Programs

Supporting Technology Verification

and Certification

Supporting the Technology Development by Linking R&D Projects

Supporting Professional Consulting

Services

Technology, Law, Accounting, Tax

Affairs, Patents

Supporting other Incubating Programs

with Related Organization

Professional

Consulting

Services

for the

Business

Marketing

Support

Incubating Tenant and Non-Tenant Environmental Venture Companies

Supporting the Publication of PR Articles

Supporting to Obtain Policy Fund from Related Organizations for the SMEs

Commercialization

and

Financial

Support

Linking

Other

Commercializ

ation

Programs


Commercialization Process3-1

Support of the Environmental Industry Promotion3-2

Support of the Overseas Market Entry3-3


3. Comprehensive Support System (KEITI)

Introduction of ‘KEITI’ : Supporting Organization3-4

Support Programs of ‘KEITI’3-5

3-1 Commercialization Process

Develop

ment

Commerci

alization

Model

Proto-

type

Market

TestMass

ProductionMarketing

Enterpris

e growth

Researc

h

R&D Fund ‘Valley of Death’ Venture Capital

0

[ R&D Stage ] [ Commercialization Early Stage ] [ Growth Stage ]

Commercialization

Lifetime(Time)

R&BD Project

(2010-)

Cash flow

Green Growth in Korea

R&D Project

(2001-)

Investment(V/C),

Loan(2009-)

Export Support

(2008-)


1. Creating the Steady Growth While Minimizing the Use of Energy and Resource

2. Minimizing the Environmental Impacts such as GHGs Emission

3. Activating the Utilization of Green Technology and Clean Energy as New Growth

Engines

3-2 Support of the Environmental Industry Promotion

Financial Support for

the Environmental

Industry Promotion

Loan for the Business

Management(10 Billion KRW)

- Supporting the Promising 15

Companies through the 9.2 Billion

Loan

Supporting the Loan through

Privileged Financing (50 billion

KRW)

- The low Interest Rate and

Limit increase

Developing the Green Financing

with Financial Companies

Operation of the

National Environment

Information Center

www.konetic.or.kr

Providing Cyber Consulting,

Cyber Exhibition Hall

Providing the Cyber

Environmental Education

Operating the Research

Information Providing System

Operating the Overseas

Environmental Technology

Information Network

Environmental Industry

PR/Marketing Support

Marketing Support for the

Environmental Technology and

Industry

Holding Exhibitions for the

Promotion of Environmental

Technology

- Low Carbon Green Growth

Exhibition (Oct. 20 – 22)

- Incheon World City Festival

Producing and Broadcasting

Special Documentaries on the


10 billion KRW : Green Industry Fund

50 billion KRW : Green Family Loan


3-3 Support of the Overseas Market Entry and Cooperation

Planning Concrete

Supporting Programs for the

Overseas Market Entry

Concluding the MOU and Holding

the Environmental Cooperation

Seminar with Partner Countries

Inviting Asian Environmental

Specialists and Supporting to

Establish Cooperative Networks

Operating the Advisory Board for

the Overseas Market Entry

Diversifying the Supporting

System for the Overseas

Market Entry

Expanding the Support for the

Overseas market Entry

Supporting the International Joint

Research and the Road Shows for

the Performance

Supporting the Establishment of

the Environment Management

Master Plan

Supporting the Feasibility Study

on the Overseas Environmental

Projects

Establishing the Financing Support

Channel with the Financial Agencies

Strengthening the Marketing and PR for the Overseas Market Entry

Holding the Business Convention by

Inviting Overseas Business Key

Player and Buyer

Supporting the Participation to the

Overseas Strategic Exhibitions

Producing the PR Video for the

Promising Domestic Environmental

Industries

Publishing the Comprehensive

Guidebook to Introduce Domestic

Outstanding Companies and

Environmental Policies


Establishing the Basis for the

Environmental Industries’ Overseas

Market Entry

Activating the Overseas

Advertising for

the Domestic Environmental

Industry

3-4 Introduction of KEITI : Supporting Organization

Executive Director for

Environmental Industry

Executive Director for


Environmental Management

Department

Pla

nn

ing

& A

dm

inis

tratio

n

Offic

e

Gre

en

Ind

ustry

Pro

mo

tion

Offic

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Inte

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usin

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Develo

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Inte

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Co

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Te

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Eco

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Pro

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Offic

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Carb

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Man

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Offic

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Verific

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eam

En

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tan

dard

&

Ce

rtificatio

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an

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em

en

t

Team

Audit & Inspection Office Assistant Auditor

Certification & Verification

Department

President

2 Executive Directors, 2 General Directors, 2 Departments, 7 Offices, 1 Center, 6 Teams

19

KEITI and KOECO Merged(2009.4)

3-5 ‘KEITI’ Support Programs

Diversifying the Environmental

Industry Information Service

Supporting the Environmental

Industry Management and

Finance

Certifying and Verifying the New

Environmental Technology(ETV)

Operating the Carbon Footprint

Labeling System

Planning National R&D Projects to

Develop the Future Driven Technology

Promoting the Procurement of

Eco-friendly Products

- National Environmental Technology R&D

Project(Eco-Technopia 21)

Operating the Eco-Friendly

Business Designation System

Operating Public Notice System to Disclosure Business Environmental Information

Implementing and Managing

National Environmental Technology

R&D Project

Establishing Basis for the Low

Carbon Society

Environmental

Technology

Development

Supporting

the

Environmental

Industry

Promotion

KEITI

Selecting and Promoting Outstanding Environmental Companies

Operating the Eco-Labeling

(Environmental Mark) System

Certification

Of

Environmental

Technology

&

Products

Activating

the Green

Management


Supporting the Specific Environmental

Technology R&D ProjectsPlanning R&BD Projects for the Environmental Industry

Complex Cluster Directive4-1

Complex Facility Plan4-2


4. Green Industry Complex Cluster

4-1 Complex Cluster Directive

Creating the High Added-Value by Enhancing the Overseas Market Share through Strengthening the Competitiveness of the Existing Environmental Industry & technology and also by promoting the Industry with the New Technology to lead the Low Carbon Green Growth

Mutual Cooperation through the Establishment of the Cooperative Mechanism for the Development of Environmental Technology between Large and SMEs with Having Core Technology

Laying the Basis for the Technology Development between Tenant Companies

by Creating Another Cluster Inside the Complex and strengthening Mutual Cooperation

Creating the Eco-friendly Landmark and Flagship Projects Pursuing Carbon Free (CO2 Free)

상생협력

*

*

Carbon Free

(CO2 Free)

Creating the

Green Industry

Complex Cluster

*

Mutual Cooperation through the Customized

Technology Development Mechanism between

Large and SMEs

Strengthening Technology

Reinforcing Mutual Cooperation

Strengthening Technology through the

Technical Assistance and Various

Information Sharing

Enhancing Competitiveness

Enhancing Competitiveness in the Domestic

and Overseas Markets through Strengthening

Technology


4-2 Complex Facility Plan

1st Landfill

Environmental

Research Complex

Airport Highway

Green Tech.

Research Center

Research and

Experiment BuildingCorp. Research

and Office

Land for Pilot Test

Pilot Scale

Test Bed

Manufacturing

Building

Eco Plaza

Convention

Center

Support Admin.

Building

[ Location : Incheon city, Korea ]

• AREA : 119,300㎡(Located within the Environmental Research Complex)| Green Growth Korea |


Thank you.

• Dr. Soung An, Kwon (Korea Environmental Industry and Technology Institute, KEITI)

Tel : +82-2-380-0281 Fax : + 82-2-380-0271

Mail : [email protected]