Seeking to Devour
The Samsung Group is preparing to enjoy the fruits of the creative economy in Daegu, its birthplace. With the Daegu Center for Creative Economy and Innovation starting to create results in cultivating and nurturing promising venture firms after its establishment on Sept. 15, 2014, the Samsung Group revealed its intention to buy companies that can facilitate its growth.
Samsung's position like this is receiving a lot of attention, since it can be interpreted as willingness to aggressively buy local companies, after showing a passive attitude in acquiring local firms as opposed to foreign companies. Since the first half of last year, Samsung Electronics has purchased 8 foreign firms, including IoT start-up Smart Things, but none of them are Korean companies.
Samsung's intention to acquire companies that are nurtured at the Daegu Center can also be interpreted to mean that the competitiveness of these venture firms is satisfactory enough for Samsung.
Related to this, the Samsung Group and the Daegu Center are going to help venture firms grow as global companies by raising capital in the U.S. and China. In China, they are planning to attract venture capital funds by holding a meeting for investment exchange every quarter, together with Korean Business Incubation Association and Tsinghua University. In the U.S., they are planning to attract investment, using the networks of the Samsung Global Innovation Center and Samsung Strategy & Innovation Center. A Samsung associate said, "Walnut and Goonies, which participated in an investor relations forum in China last Aug, were favorably reviewed by local investors."
On Sept. 15, an event was held to commemorate the first anniversary of the Daegu Center for Creative Economy and Innovation, as if it had celebrated the successive landing of the creative economy. Science, ICT and Future Planning Minister Choi Yang-hee, Daegu Mayor Kwon Young-jin, and Lee Sang-Hoon, President and CFO of Samsung Electronics attended the event, where major achievements were reported, and various measures to encourage new investment and expand the number of start-ups were announced. A total of 35 companies were created at the Daegu Center for Creative Economy and Innovation led by the Samsung Group, including 17 for the first year and 18 for the second, through C-Lab, which imitated Creative Lab, Samsung's program that turns ideas into money-making ventures.
There are some companies that have been growing rapidly. Walnut, a venture firm that specializes in designing fabrics, are increasingly trading with companies at home and abroad through C-Lab's mentoring program and Samsung Ventures' investment. The start-up is expected to grow 40 times its size year-on-year to reach 1.2 billion won (US$1 million) this year, from 30 million won (US$254,346) in sales last year.
Since Sept. of last year, the Samsung Group has invested 10 billion won (US$8.4 million) to 48 venture firms and start-ups through the Youth Start-up Support Fund and Samsung Ventures' investment fund. In addition, the corporation is helping nascent entrepreneurs acquire expertise in business by dispatching executives at its affiliates. The Samsung Group also allows those who are willing to start businesses to use its distribution networks at home and abroad when they cultivate a market. Samsung plans to invest 20 trillion won (US$17 billion) by 2019 in order to nurture venture firms and start-ups, which includes 10 billion won (US$8.5 million) for the Youth Start-up Support Fund, and another 10 billion won for Samsung Ventures' investment fund.
On top of that, the Samsung Group has already disclosed 400,000 patents owned by its major affiliates like Samsung Electronics, Samsung Display, Samsung SDI, and Samsung Electro-Mechanics to nascent entrepreneurs in order to facilitate win-win cooperation. Those patents are related to the fields of mobile devices, displays, telecommunications, semiconductors, and energy.
The conglomerate is providing a matching service for patents needed by venture firms and start-ups by placing experienced patent experts at the Daegu Center for Creative Economy & Innovation. It is also providing a mentoring service for patents, from filing for to using them.