On Oct. 19, the Korean Chamber of Commerce and Industry (KCCI) announced the results of a survey titled “2023 Startup Challenges and Policy Issues” conducted among 259 domestic startups, providing insights into their current obstacles and policy recommendations.
The survey revealed that four out of 10 startups are currently experiencing growth challenges primarily because of fundraising problems. Furthermore, they listed their main concerns in the following order: rising costs leading to increased expenses at 38.2%, a shortage of skilled personnel at 22.0%, and the need to secure domestic and international markets at 18.1%.
The continuing operational difficulties in the startup sector, ongoing since last year, seem to have intensified this year. Of the surveyed companies, 40.2% reported that business conditions deteriorated compared to the previous year. The primary reason mentioned was the sluggish domestic market at 60.6%, followed by factors like a worsening startup investment climate at 37.5%, and the persistence of issues related to the “3 Highs – high inflation, high interest rates, high exchange rates.”
Only one out of the 10 responding companies reported an increase in investment attraction compared to one year ago.
To cultivate the development of the entrepreneurial ecosystem, the survey highlighted that “activating investments” at 44.0% is a top priority. This was followed by fostering connections between large and medium-sized companies with startups at 33.6% and addressing regulatory issues in emerging industries at 20.1%.
A representative from the KCCI stated, “Enhancing investments, fostering connections, and promoting technological exchange can all be part of the solution through open innovation. Collaboration with large and medium-sized enterprises could provide startups with additional investment opportunities, advanced technology and business model development, as well as linking to B2B and B2G markets, potentially yielding a triple-win effect. Large corporations can also benefit from open innovation by utilizing innovative technologies from startups to venture into new business ventures and enhance their research and development (R&D) efforts.”
Kang Myung-soo, the head of the public projects division at the KCCI, stressed the significance of open innovation in the era of the Fourth Industrial Revolution, marked by vibrant convergence of advanced technologies. He stated, “In an age where cutting-edge technology convergence is thriving, open innovation is not a choice but a necessity. The KCCI will also strengthen its role as a private-sector platform by facilitating connections between large and medium-sized enterprises and promising startups and and expanding investment matchmaking initiatives.”