At present, South Korea’s economic policy is based on two pillars, income-led growth and innovative growth. The former means that an increase in household income leads to an increase in consumption and, in turn, to more production and job creation by enterprises. In short, it means economic revitalization based on a virtuous cycle on the demand side.
Because of uncertainties about the future, however, it cannot be said for sure that an increase in income results in more consumption and more jobs in each and every case. This is where the other pillar comes in. Innovative growth focuses on the supply side, that is, enterprises on the contrary to income-led growth. According to this concept, new technological developments based on innovation result in new jobs, and then an increase in household income and job creation can be achieved at the same time.
These days, entrepreneurship is drawing the attention of many as a key element for the realization of innovative growth. This is because the creation of added values and jobs is derived from an attempt to defy the status quo and achieve innovation by means of creativity. Innovative growth is an essential task of South Korea with national competitiveness hinging on Industry 4.0 characterized by ICT convergence and innovation. It is entrepreneurship that is at the very center of the task, which cannot be completed without creating new businesses by challenging the present in an innovative way.
This is why the entire world is focusing on the creation of new and innovative businesses nowadays. A number of countries are striving to reinvigorate their economies by concentrating on entrepreneurship as seen in the cases of Startup America, La French Tech and Startup Britain.
Likewise, the South Korean government is moving ahead with its innovative economic and job creation strategy in order to deal with an economic slowdown and a high unemployment rate. Entrepreneurship is a key source of economic growth based on new market exploration and the past development of the South Korean economy is, in fact, a nice example of entrepreneurship.
The Korea Entrepreneurship Foundation (KEF) has dedicated itself to the promotion of entrepreneurship in South Korea. It has provided a variety of programs for entrepreneurship education and promotion based on its determination that entrepreneurship is the most effective solution to economic problems such as youth unemployment.
Data of the Global Entrepreneurship Monitor (GEM) clearly shows how dedicated the KEF has been to the goal. According to the data, the ratio of small businesses for livelihood in South Korea dropped from 49% to 22% between 2010 and 2017 and that of opportunity-driven startups jumped from 39% to 64.2% during the same period based on the South Korean government’s policy measures for entrepreneurship promotion released in and after 2011. This shows innovative startups based on entrepreneurship have become the mainstream of the South Korean startup market.
What matters now is how to make the education and promotion more systematic. The United States and European countries have provided grade-specific entrepreneurship education programs covering primary to tertiary education for long and the programs have yielded highly satisfactory results. In South Korea, an entrepreneurship education ecosystem comparable to theirs is in the making. Entrepreneurship education is scheduled to be adopted as a part of primary and secondary school curricula starting from 2018 and the adoption is scheduled to be expanded to colleges and universities until 2020.
In this regard, the upcoming general meeting of the GEM has a very significant meaning. There, a number of countries around the world will share their entrepreneurship education and seek further cooperation. The KEF hopes that the general meeting will be a good chance for South Korea to further develop its entrepreneurship.
Contributed by Nam Min-woo, Chairman of the Korea Entrepreneurship Foundation