Going Digital, Going Global in Korea
TRPC, in collaboration with the Internet Society, Korea Chapter, organized the fourth in the series of the Going Digital forums on November 4, 2015, at Maru180, a co-working space for digital start-ups and entrepreneurs in Seoul.
The forum, supported by the Ministry of Science, ICT and Future Planning (MSIP), the Korea Internet & Security Agency (KISA) and the Korea Internet Corporations Association (K-Internet), was attended by 30-40 participants from the Internet industry associations, various start-ups, and academia.
Mr. Kang SeongJu, Director General of Internet Convergence at MSIP, opened the forum with an entertaining set of remarks in which he stressed that, if Korea is to stay ahead in the transition towards a digital economy, it can no longer simply rely on its leadership in infrastructure and hardware – i.e., broadband speeds and smartphone density – but has to foster its burgeoning digital start-up ecosystem. He highlighted on-going deregulation efforts by the current administration under its Creative Economy initiative and the growing recognition of the digital economy within the government, which can pave the way to removing hurdles for start-ups moving forward. Mr Kang commended the relevance of the forum as a multi-stakeholder dialogue, calling for further such forums as they are “vital in creating an enabling policy and regulatory framework if start-ups are to prosper in Korea”.
Following these opening remarks, Dr. Peter Lovelock, Director and Founder of TRPC, and Kim JongKap, Chief Executive Director of Born2Global, provided the morning’s keynote presentations.
Dr. Lovelock shared findings from TRPC’s policy whitepaper, “Going Digital: the Status and Future Potential of Internet-Based Economies in Asia”. The TRPC whitepaper provides in-depth case studies of various industries, both traditional and digital. The report looks at a combination of five emerging and developed economies and the impact the Internet is having as a horizontal enabler in transforming and empowering industries across the economy. Lovelock also pointed out that aligning policies related to data protection and cross-border data flows at the regional and global levels is an important consideration for Korea. These policies determine some of the key business decisions businesses and start-ups must make as their operations become more Internet and data dependent, and therefore have important repercussions on how well a digital economy will be developed in the country.
Mr. Kim JongKap, Chief Executive Director of Born2Global, said that the main challenge Korean start-ups face in going global is the lack of core business competency (such as understanding of intellectual property and patent laws) rather than a lack of ideas or language barriers. Mr. Kim briefly outlined the work of Born2Global, which is a government-supported execution agency focused on helping Korean start-ups penetrate overseas markets with the goal of producing Korean “unicorns”.[1] It provides holistic support across legal, patent, investment, marketing, accounting, and other professional services and will soon be opening its own incubator space.
The second act of the forum was dominated by a lively discussion on the role of the government to foster a dynamic start-up culture in Korea by the following panelists:
- Choi Sungjin, Executive Director, K-Internet
- Lee Jung-hoon, Graduate School of Information, Yonsei University
- Erik Cornelius, COO and Co-founder of PR & Marketing agency G3 Partners
- Jay Park, Co-founder and Executive Creative Director of Redwood Interactive
A few key messages emerged from the discussion.
- While state programmes to support start-ups are commonplace in many parts of the world, including Israel and many Asian countries, it needs to be noted that state intervention was almost nonexistent in the development of Silicon Valley, “the mecca of Internet and digital start-ups”.
- The Korean government has been aggressively pursuing the “creative economy” agenda and allocated significant budget into the start-up support programme. While such support is appreciated by the start-up community, the government needs to be aware of pitfalls such programmes could create, e.g. undermining competitiveness of start-ups and fostering dependency.
- Korea is ahead of many other countries in terms of Internet access and usage, due to the government’s focus and support in establishing the necessary infrastructure. Such policy leadership and many of the regulations currently in place are necessary for consumer protection and to preserve industry and business integrity. However, too many regulations and the unintended consequence of cross-cutting or poorly rendered regulations can hinder the scaling up and expansion globally of business, hence policy discussion with industry players in reviewing existing laws becomes essential. The example of project cost overrun due to legal and regulatory barriers in a smart city project in Busan was noted.
- Going global should also entail welcoming businesses and ideas from the rest of the world to Korea. The Korean government tends to focus on selling overseas, which may stem from its long export-oriented economic history. In a globally connected digital economy, ensuring a free flow of business, capital and ideas, both in and out of a country determines its competitiveness.
- Independent of government support, many panelists agreed that start-ups need to be equipped with “global capacity” such as linguistic and cultural competency as well as branding capacity to penetrate international markets. The government’s current support programs can also have a greater emphasis on brand marketing.
[1] A term that denotes a start-up company whose valuation has exceeded USD 1 billion.
The full “Going Digital: the Status and Future Potential of Internet-Based Economies in Asia” report in Korean can be downloaded here.
