Only 7% of Domestic Startups Expand Overseas

Asan Nanum Foundation Presents Research Report and Policy Proposals on 'Global Openness' of Korean Startup Ecosystem

Only about 7% of startups in Korea have expanded overseas. This is a significant difference compared to Singapore, where about 90% of startups go abroad, and Israel, with about 80%. There is an urgent need to nurture startups that are competitive on the global stage.

On the 9th, Asan Nanum Foundation, Startup Alliance, D.CAMP (Banking Sector Youth Startup Foundation), and Korea Startup Forum released the '2023 Startup Korea!' report, which studied the global openness of the Korean startup ecosystem. The policy proposal presentation was held in conjunction with 'COMEUP 2023,' the largest startup festival in Korea.

At the 'Startup Korea! Policy Proposal Presentation,' Seo Hyo-joo, partner at Bain & Company, is presenting the report.

The report analyzed Korea's competitiveness in 'global openness (connectivity),' which indicates how smoothly startups move bidirectionally in terms of founding, capital, and talent between Korea and global countries. According to the 2023 Global Startup Ecosystem data published by Startup Genome, cited in the report, Korea is at a disadvantage in global openness compared to leading countries such as the United States, the United Kingdom, Israel, and Singapore. Hyoju Seo, partner at Bain & Company, who presented the findings, explained, "As of 2022, the number of Korean entrepreneurs founding startups overseas or startups expanding from Korea abroad is about 300, whereas Singapore has about 2,000, and Israel has about 16,000, which is significantly higher."

Investment inflows from overseas to Korea are also lower compared to global leading countries. When cumulative startup investments from 2020 to 2022 were divided into domestic and foreign capital, Korea's share of foreign capital was only about 7%. Singapore's was about 32%, the United Kingdom's about 25%, and France's about 12%. The United States is an exception at about 4%, due to its highly active domestic investment industry centered on native investment capital, resulting in a smaller proportion of foreign capital inflows.

Accordingly, the report proposed three major policy directions to promote the development of the Korean startup ecosystem and secure a leading global position: ▲ easing procedures and regulations ▲ enhancing the composition and quality of support programs ▲ improving awareness and advancing infrastructure. Kim Dohyun, director of Startup Alliance, stated, "To enhance the global competitiveness of the domestic startup ecosystem, it is necessary to create an environment where startups worldwide can freely conduct business and communicate across borders."

Jang Seokhwan, director of Asan Nanum Foundation, said, "There is consensus that issues related to global openness must be improved for the Korean startup ecosystem to lead the global market," adding, "I hope that the results of this global openness study and policy insights will be widely shared, and that various recommendations will be reflected in future policies to improve startups' global openness and ultimately lead to macroeconomic benefits for the country."

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