The 6th National Consultation on “Ventures and Startups” was Successfuly Held
- Kim Jin Pyo, Speaker of the National Assembly, stated, “Comprehensive innovation of financial institutions into technology investment finance is needed, along with an increase in specialized technical personnel.”-
- Lee Young, Minister of SMEs and Startups, stated, “A policy paradigm shift from existing venture and startup fostering strategies is needed.”-
- Choi Hang-jip, Head of the Startup Alliance, stated, “Need to make the Venture Business Act permanent, eliminate venture capital regulations, and improve online platform and data regulations.”-
On July 19, at 9:30 AM, the Republic of Korea’s National Assembly, under the leadership of Speaker Kim Jin Pyo, successfully held the 6th National Consultation at the main meeting room of the Member’s Office Building under the theme of “Promotion of Ventures and Startups: Legislative and Policy Agendas”
In his opening speech, Speaker Kim Jin Pyo said that “the venture and startup ecosystem must undergo a complete transformation for South Korea to leap as a global leader.” He also highlighted “the need to innovate financial institutions into technology investment finance and to foster technical experts for the activation of M&A.”
In her congratulatory remarks, Lee Jaejung, Chairperson of the Trade, Industry, Energy, SMEs, and Startups Committee, pointed out that “the overall understanding of the venture and startup ecosystem still remains poor. The National Assembly, government, and the field must communicate together to increase investment.” Back Hyeryun, Chairperson of the National Policy Committee, said, “Investment policies for ventures and startups need to evolve from quantitative growth to qualitative development. It is time to discuss rational improvements to the domestic policy fund system.”
Lee Young, Minister of SMEs and Startups, stated, “A global economy where national borders have become meaningless is emerging due to digital transformation and platform development. We need to reconsider the effectiveness of previous strategies for nurturing ventures and startups, and it is a time that demands a paradigm shift in policies.”
In his welcoming address, Lee Kwang-jae, Secretary-General of the National Assembly, mentioned, “As of the end of December 2021, the number of employees in venture companies is 830,000, exceeding the employment of the four major conglomerates by 110,000, with 720,000 employees. The hiring inducement coefficient (10.6) and the employment inducement coefficient (12.9) in the software industry are higher than the overall industry average (employment coefficient 8.5, job creation coefficient 12.5). Following industrialization and democratization, South Korea, has experienced stagnation, but we should become a startup nation in the future.”
In his presentation, Choi Hang-jip, Head of the Startup Alliance, stated, “We need to make the Venture Business Act permanent and solve venture capital regulations that are divided into startup investment companies and new technology business finance companies.” He also highlighted “the need for careful consideration of online platform regulations and regulatory improvements for effective data utilization.”
During the discussion session moderated by Cho Junhee, Chairman of the Korea Software Industry Association, Kim Byungwook, a member of the National Assembly and participating member of the National Assembly Unicorn Farm, emphasized the need “to create numerous successful models of regional-based startups through collaboration among local businesses, universities, local governments, and the central government.” Chung Ilyoung, a member of the National Assembly and participating member of the National Assembly New Growth Industry Forum, stated, “There is a need to expand the investment budget for the fund of funds to increase the inflow of private funds within the venture and startup ecosystem.”
Park Yong-soon, Director General for Startup Policy at the Ministry of SMEs and Startups, highlighted, “Investment effects can occur when a network of collaboration between manpower training and various innovation entities is established.” He also emphasized plans “to expand support to regions with the potential for self-sustaining venture ecosystems, create regional innovation clusters, and revise regulations to align with globalization, including attracting foreign talent and supporting overseas corporations.” Lee Hyung-joo, Director of the Financial Policy Bureau at the Financial Services Commission, stated, “By improving regulations related to venture capital, we will strive to enhance the capital supply function through the market, expand the scale of policy finance, secure qualitative transformation, and establish a venture and startup capital market that investors can trust.”
Sung Sang-yeop, President of the Korea enture Business Association, emphasized, “We need innovative ideas, such as introducing a ‘collective investment scheme’ as another innovative system that can revitalize ventures.” He also highlighted, “Innovation in university regulations for nurturing venture and startup talent and various institutional arrangements for attracting foreign talent are necessary.” Ryu Kyung-jae, Director of Policy at the Korea Startup Forum, said, “We need to urgently overhaul outdated regulations and support startups’ innovation so that they can grow into global companies.” He also exphasized that “we need to promote private-led self-regulation for online platform regulations.” Lim Kyung-eop, a reporter at Chosun Ilbo, said, “As challenges emerge with the expiration of the regulatory sandbox validity period, there is a need to promote swift regulatory improvements through strengthening the function of regulatory law revision.”
Leading up to this consultation, during a meeting convened by the Speaker of the National Assembly on May 10th, most participants from the venture and startup industry unanimously emphasized the need for regulatory reforms and expanded support to enhance the vitality of the venture and startup ecosystem. They called for legislative efforts at the parliamentary level to achieve these goals. Based on the consensus regarding the proposals from the meeting, the National Assembly has formulated a total of 25 follow-up measures encompassing legislative actions, budget considerations, regulatory easing, and administrative measures, aiming to bring about changes in the field. Parliament-affiliated institutions have established a collaborative research system for fostering innovative growth and promoting ventures and startups. Based on this, legislative matters were derived, including the enforcement of the Act On Special Measures For The Promotion Of Venture Businesses on a regular basis and regulatory improvements related to venture capital.
Meanwhile, regarding the theme of this consultation, the National Assembly held an “Idea Contest for Fostering Ventures and Startups” from June 23 to July 13, targeting the general public. A total of 1,153 individuals participated in the event. When categorizing the submitted ideas by type, 33% focused on “expanding funding and support for new challenges,” 25% on “support for global market entry,” 21% on “regulatory innovation to foster new technologies,” 11% on “cultivating a culture supporting ventures and startups,” and 10% on “building a mutually collaborative startup ecosystem.” The National Assembly plans to drive subsequent legislative efforts for the activation of ventures and startups, taking into account the discussions and ideas presented in today’s consultation, as well as the outcomes of the idea contest. In particular, the National Assembly is actively considering key legislative measures to improve regulations related to new technology business finance companies. This is based on the recognition that, above all, there is a need to move away from the existing policy-focused financial support system and explore legislative and policy alternatives to attract private venture capital into ventures and startups.
The National Consultation, organized and hosted by the National Assembly Secretariat and National Assembly Futures Institute, was broadcast live on the National Assembly TV and its YouTube channel, and the consultation materials are available on the National Assembly Futures Institute website.
During the national consultation, which is designed by the National Assembly to create an opportunity to lead the national agenda, National Assembly’s Special Committees, National Assembly’s affiliated agencies, and other relevant institutions will jointly study and discuss national pending issues that can shape the future of the Republic of Korea. Following the 6th National Consultation, subsequent consultations are scheduled to be held on topics such as the local extinction.
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