Korea’s venture industry has continued its solid growth
As a major part of our cover story this month, we met and held an interview with the Chairman of the Korea Venture Business Association (KOVA), Minwoo Nam, who took office this year, in order to hear about his responsibility, his thoughts on the venture business environment here, government policies, venture start-ups, major projects under process and future plans, etc.
First of all, let me congratulate you on your inauguration as head of the Korea Venture Business Association (KOVA). How do you feel about it?
I am feeling a lot of responsibility as I took office at a crucial time, one when society’s expectations regarding the role of the venture industry are on the rise.
Korea’s venture industry has continued solid growth despite many ups and downs. At present, over 380 venture firms are recording more than 100 billion won each in gross sales, with their combined turnover equivalent to that of the sixth-largest major corporation in Korea. They are also contributing greatly to the national economy by marking an employment growth rate of 6.8%, a figure significantly higher than that of large enterprises.
KOVA will do its best to improve the industry’s ecosystem and help firms achieve sustainable growth. In doing so, it will make the most of its experience of growing small-scale businesses, and I myself will also put my own capabilities to good use to that end.
What are your thoughts about the current venture business environment and what do you think is needed to improve it?
I would like to mention the concept of a venture ecosystem as being that of a virtuous cycle, one which can be defined as a framework in which business foundation and growth as well as failures and new attempts exist in an organic relationship with market participants such as venture firms, angel investors and venture capitals. This virtuous cycle can only be attained when leading venture entrepreneurs become angel investors and mentors in order to buttress their followers in the pursuit of success.
In 2012, the number of venture companies recording at least 100 billion won in sales topped 381, a new high. However, systemic support for failed businesses is not yet adequate when compared with explosive quantitative growth. Incentives for angel investors have also yet to be expanded. I believe that there should be more tax benefits and angel matching services in the future in order to better assist unsuccessful businesses and promote angel investment.
What systemic and policy goals does the government have to pursue in order to revitalize the venture industry?
The government’s support measures need to be long-term ones. Funding does matter, but what is more important is the provision of an infrastructure for the commercialization of innovative ideas and business items as well as making sure unsuccessful firms use their experiences to help other young entrepreneurs.
These days, legislation is underway to improve joint surety. More such legal efforts and systemic support are required if this virtuous cycle is to be created.
How can you attract young, skilled human resources to the startup industry?
There is no doubt that young people will only be interested in starting their own businesses when the government comes up with long-term, systematic benefits and incentives, instead of one-off plans.
One of the most important things is to create an environment in which they do not have to be worried about the possibility of failure. Once such an atmosphere is created, more and more young people will turn their attention to establishing and running their own company.
To that end, we need to foster entrepreneurship through different programs and provide education from an early stage. KOVA’s programs, such as the YES Leaders Program and 7-day Venture Market, are helping an increasing number of young people become interested in startups, as well as providing various lessons from mentors. Various similar measures will be available over time in cooperation with central and local governments, educational institutions and industry associations.
What are KOVA’s major projects for this year and the upcoming future?
Our ultimate goal is make venture entrepreneurs be fully recognized, trusted and respected as a pillar of the national economy and help them contribute to national wealth creation.
We will continue formulating consistent policies so that venture firms can accomplish stable and sustainable growth, as well as cooperating more closely with the International Network of Korean Entrepreneurs (INKE) in order to promote global market penetration. We will also revitalize the M&A market so that angel investors can redeem their investment more easily.
Inside the association, we will also make various efforts to assist the overall business of venture firms. This will include marketing activities both at home and abroad, support for education and training, support for business foundation and investment.