[2021 National Audit] "60% of Venture Companies Concentrated in the Capital Area... Need to Establish Incentives for Provinces"

Assemblyman Jangseop Lee "Local Venture Ecosystem Is Poor"
Government Support and Venture Investment Also Concentrated in Capital Area
"Concerns Over Regional Economy and Job Disparities"

[Asia Economy Reporter Kim Bo-kyung] The gap between venture companies in the Seoul metropolitan area and non-metropolitan regions has been deepening day by day.

According to data on the 'Number of Venture-Certified Companies by Metropolitan Local Governments Nationwide' received by Lee Jang-seop, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Venture Business Committee from the Ministry of SMEs and Startups on the 6th, over the past 10 years, the number of venture companies in the Seoul metropolitan area increased by 8,415, while those in provincial areas increased by only 3,630. The proportion of venture companies in the metropolitan area rose from 56.7% (14,837 companies) in 2011 to 60.8% (23,252 companies) in 2021, surpassing 60% for the first time this year.

The venture ecosystem in provincial areas was found to be very poor. This year, the distribution ratio of regional venture companies was low in the following order: Sejong 0.4%, Jeju 0.6%, Ulsan 1.3%, Gangwon 1.9%, Gwangju and Jeonnam 2.1%, Jeonbuk 2.2%, and Chungbuk 2.8%. Except for Jeju, Jeonnam, Gangwon, and Daejeon, all local governments showed a lower growth rate than the metropolitan area.

In particular, among the 100 Baby Unicorn companies selected by the government, 88 (88%) are concentrated in the metropolitan area, and among 57 Pre-Unicorn companies, 50 (87.7%) are also concentrated in the metropolitan area, revealing a serious qualitative gap as well.

Over the past 10 years, the total amount of new venture investment increased from 1 trillion won to 4 trillion won, but the proportion of investment in the metropolitan area was concentrated at about 80%, with 74.3% in 2010, 84.8% in 2015, and 78.2% in 2020. 91.3% (136 firms) of venture capital firms capable of nurturing venture companies and 66.4% (223 firms) of startup support accelerators were also concentrated in the metropolitan area.

Assemblyman Lee said, "The venture gap between the metropolitan area and provincial regions will also cause disparities in the regional economy and jobs," adding, "From the perspective of balanced regional development, it is necessary to actively prepare bold incentives for relocation, such as transfer subsidies or tax support for companies located in provincial areas."

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