[Viewpoint] Big Data and Startup Entrepreneurship

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Big data, the core of the 4th Industrial Revolution, is rapidly transforming society and the economy. Big data refers to structured and unstructured data that is vast in scale, making it difficult to collect, store, and analyze using traditional methods or tools. In one minute, Google generates 2 million search queries, YouTube uploads 72 hours of video data, and Twitter produces 270,000 tweets. The total amount of data generated worldwide is expected to reach 163 zettabytes (ZB) annually by 2025, which is ten times the current volume. Over the past 20 years, 8 billion hard disk drives (HDDs) have been shipped, but their total capacity amounts to only about 4 ZB. It is predicted that the majority of data generation will come from machine-to-machine (M to M) communication and the Internet of Things (IoT) sectors, rather than from individual consumers.

While big data is generally used for corporate marketing, it is expected to gain more attention as a business model for startups in the future. Palantir, a U.S. company, is a representative example. One of its founders, Peter Thiel, developed a system to combat credit card fraud based on his experience at PayPal. In 2003, Palantir was established with a $2 million investment from the U.S. Central Intelligence Agency (CIA) and the Department of Defense. Palantir provides platforms for big data analysis across various fields to prevent financial risks and collaborates with agencies like the CIA and FBI to apprehend criminals.

In Korea, startups utilizing big data have been increasing recently. A startup called Antock technically collects and automatically analyzes financial and accounting data that are difficult for the general public to access and understand, providing this information to consumers. They founded the business model based on the judgment that there is a lack of securities information friendly to individual investors in Korea, offering information tailored to the perspective of individual investors.

Big data-based startup business models can be considered in several ways. First, personalized offering services provide customized information to individuals by analyzing customer behavior to identify and compare preferred products, delivering optimal consumption information. This can be applied to distribution and online commerce businesses. Second, data analysis-based applications interpret patterns and behaviors in big data to make new proposals. These are applicable in healthcare, insurance, manufacturing, and security sectors. Third, cloud services for small and medium-sized enterprises (SMEs) are important. SMEs account for 99% of all businesses in Korea but often lack the capacity and budget to store and analyze large amounts of data. Providing low-cost, high-efficiency cloud services to these businesses can be a suitable business model.

For the founding and success of big data-based startups, more government policy support is necessary. First, a qualified talent pool with data management and analysis skills must be cultivated to ensure the success of data-driven startups. Next, systems should be improved to make it easier for young people to start businesses in collaboration with universities in this field, and public institution data should be opened so that anyone can use it to launch startups. The amendments to the Personal Information Protection Act, the Information and Communications Network Act, and the Credit Information Act, passed by the National Assembly last January, can serve as a great opportunity for startups. The Personal Information Protection Act eliminated overlapping regulations that arose from different responsible ministries, expanding the scope for individuals and companies to utilize information in line with the 4th Industrial Revolution era.

The International Data Corporation (IDC) predicted that the big data market would grow at an average annual rate of 11.1% until 2022. Approximately 94 trillion won has been invested in 10,000 big data startups worldwide. Korea ranks fifth in data production globally but only 31st in big data utilization. There are no Korean companies among the world’s top 100 data companies or among the 10 big data industry companies in the global unicorn companies. The market is expanding infinitely, and opportunities to create business models are increasing. It is hoped that the number of big data startups in Korea will grow and that many successful startups will emerge. / Kyung-Hwan Kim, Professor, Graduate School of Global Entrepreneurship, Sungkyunkwan University

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