Government to Establish 'Smart Korea Fund' to Foster New Industry Startups

President Moon Jae-in is speaking at the 'Next-Generation Global Youth Startup Meeting' held on the 14th at the Narakeum Youth Hub Center in Gangnam-gu, Seoul. Photo by Yonhap News

[Asia Economy Reporter Moon Hyewon] The government has decided to establish the ‘Smart Korea Fund’ to proactively respond to the post-COVID-19 era and foster venture companies and startups.

On the 14th, the Ministry of SMEs and Startups held a briefing at the Government Seoul Office, announcing plans to nurture next-generation global innovative startups and the current status of investment and employment in ventures and startups.

The Smart Korea Fund is designed to focus investments on new industries that have emerged prominently after the COVID-19 pandemic, such as contactless (untact) and online sectors, artificial intelligence (AI) and big data, and bio industries. It will be established as a public-private joint fund with private capital, including mentor companies, participating from the initial formation stage. Detailed matters related to the fund’s establishment will be finalized through consultations with relevant ministries.

Park Young-sun, Minister of SMEs and Startups, said, “If a large-scale investment fund targeting the post-COVID-19 era is primarily supplied to innovative ventures and startups creating high-quality digital jobs, I am confident that South Korea will soon lead the global market.” She added, “By making innovative ventures and startups the main force to create a new innovation economic model leading the world, and by focusing on the digital transformation of traditional manufacturing industries, we will advance toward a digital powerhouse Korea where innovation and coexistence harmonize.”

Meanwhile, venture investment in the contactless sector significantly increased in the first quarter of this year, when COVID-19 spread.

According to the venture and startup investment and employment status announced by the Ministry of SMEs and Startups on the same day, total new venture investment in the first quarter decreased by 4.2% compared to the same period last year.

However, investment in the bio-medical and information and communication technology (ICT) service sectors increased by 33.9% and 24.0%, respectively, and venture investment in contactless fields such as logistics and distribution, smart healthcare, and smart business and finance rose by 21.7% compared to the same period last year.

During the same period, new employment at invested companies increased by 5.7% (496 people) compared to the end of last year, with notable employment growth in ICT services (227 people), distribution and services (191 people), and bio-medical (102 people) sectors.

The average employment per company in the contactless sector was 37.8 people, surpassing the average employment of 27.2 people in the face-to-face sector.

Over the past three years, venture investment in the contactless sector has more than doubled from 800 billion won in 2017 to 1.7 trillion won last year, and employment increased from 27,000 to 47,000, creating approximately 20,000 jobs.

Earlier that morning, President Moon Jae-in met with young startup representatives as his first on-site activity following his third anniversary special speech, encouraging them and announcing policies to support and foster ventures and startups.

At the meeting, President Moon stated that one of the measures to lead new industries highlighted after COVID-19, such as untact and online, AI and big data, and bio, is to promote the Smart Korea Fund.

This content was produced with the assistance of AI translation services.