“We will focus on discovering artificial intelligence (AI) technology development projects to support the growth of AI startups in Seoul.”
Joo Yong-tae, the Deputy Minister of Economy in Seoul, noted in an interview with ChosunBiz on the 17th that the city’s core strategy for fostering startups this year is as stated.
Under the policy framework of 'reorganizing all industries around AI,' Seoul plans to focus on supporting AI and AI-integrated research and development (R&D) for startups this year. It will also create a 500 billion won AI fund by 2026. The city will support R&D in six new growth industries, including robots, quantum, bio, fintech, and creative industries, alongside AI.
The Deputy Minister said, “Startups are the core of industrial development through innovation, including technology, and the main agents of future economic growth in Korea,” adding that “the city has been running the Seoul-type R&D support project since 2005 to support the development of innovative technologies for Seoul-based startups over the past 20 years.”
The Deputy Minister emphasized, “As innovative startups are founded and grow in Seoul, quality jobs are created, leading to economic development,” and stated, “We will further activate the startup ecosystem in Seoul.” He also mentioned plans to establish an independent organization, the Seoul Investment Promotion Foundation, dedicated to attracting global investments and systematically supporting promising startups located in Seoul that have technological capabilities and business potential.
Seoul plans to invest approximately 261.1 billion won in this year’s startup fostering initiatives, including the Seoul-type R&D support project and startup incubation programs. Below is a Q&A with the Deputy Minister.
―The Seoul-type R&D support project is being promoted to support the innovative technology development of startups.
“About 60% of startups in Seoul are based on science and technology and information technology (IT). Accordingly, since 2005, the Seoul city has been promoting the Seoul-type R&D support project as the core policy for nurturing startups for 20 years.
This year, we aim to enhance the AI technology competitiveness of startups by focusing on supporting AI and AI-integrated R&D. In particular, under the policy of rapidly nurturing and reorganizing all industries around AI, we plan to create a 500 billion won AI fund by 2026 as a catalyst for promoting private investment. Through this, we will focus on supporting the global expansion of AI startups and the enlargement of open innovation. At the same time, we will train 10,000 AI talents annually in collaboration with youth employment training institutions and universities.
The aim is for Seoul to play a pivotal role in propelling South Korea into the ranks of the top three global AI powers. Of course, support is not only for AI R&D; active support will also be provided for R&D in six new growth industries including robots, quantum, bio, and fintech.”
According to the 'AI Maturity' report released by the Boston Consulting Group (BCG) last November, South Korea was classified as a 'stable competitor' below the leading AI countries. The leading AI countries are the United States, China, Singapore, the United Kingdom, and Canada.
―What are the results of the Seoul-type R&D project?
“From 2005 to 2024, we invested a total of 942.7 billion won and supported 4,181 R&D projects. As a result, participant corporations achieved sales of 1 trillion 45.9 billion won and created 8,750 jobs (as of cumulative 2023). We also had achievements of 4,609 patent applications and registrations. These startups will be the core agents of future Seoul and the Korean economy.”
―Why is fostering startups important?
“This is because they are the agents of the future Korean economy. In particular, early startups play an important role not only in developing innovative technologies that change society but also in creating jobs for youth. This is the background behind major cities around the world focusing on fostering startups to enhance urban competitiveness. Startups can pioneer new markets that existing corporations find difficult to access and lead the development of diverse new industries in various forms, including collaboration with large corporations.
Seoul has an entrepreneurial ecosystem rich in excellent talent, research institutions, venture capital (VC), and global corporations, making it a city where startups can freely challenge themselves and create new markets. We plan to create a more startup-friendly environment in Seoul so that innovative startups can use the city as a base for expanding into the global market.
Attracting global talent and capital to Seoul is also important. Expanding global networks can increase the success potential of Seoul startups and corporations in global markets. Activating the entrepreneurial ecosystem is a crucial factor leading to innovation and economic development across the country.”
―Seoul ranked 9th as a good city to start a business last year.
According to the 'Global Startup Ecosystem Report' released last year by the global startup ecosystem evaluation organization 'Startup Genome,' Seoul was rated as the 9th best city to start a business among 300 cities worldwide. This is the highest ranking ever. The top spot went to Silicon Valley in the United States, 2nd place was jointly held by London in the United Kingdom and New York in the United States, and 4th place was jointly held by Los Angeles in the United States and Tel Aviv in Israel.
South Korea (9th) ranked higher than France's Paris (14th) and Germany's Berlin (15th), which are representative startup cities in Europe. I believe this is the result of Seoul's efforts to promote comprehensive entrepreneurial policies for the growth of innovative startups and to foster the entrepreneurial ecosystem. The plan is to expand the growth of innovative startups and enhance the training and technical support for future talents, aiming to develop Seoul into a top 5 global startup city by 2030.”
―We are also running incubation programs that provide promising startups with office space and customized consulting support.
“Through Seoul's startup support facilities, we provide about 1,000 startup workspaces and support various consulting services. This is to ensure that startups can operate their businesses stably and continue to grow. Major startup centers include the Seoul Startup Hub in Gongdeok, M+(Magok), Changdong, Seongsu areas; Hongneung Seoul Biohub; Yangjae Seoul AI Hub; and Yeouido Seoul Fintech Lab. Promising startups can receive incubation programs such as customized consulting and investor networking here.
We are also promoting campus towns for each university to strengthen the university startup ecosystem. Among the 54 universities located in Seoul, 39 are participating and 139 startup support facilities are operating. Since starting in 2017, we have identified and supported a cumulative total of 3,321 teams (13,954 people) of preliminary and early-stage corporations by the end of last year. This year, we are working to identify and foster 1,000 teams of preliminary and early-stage youth startup companies from 20 universities.
―We are in the process of establishing an independent organization, the Seoul Investment Promotion Foundation, dedicated to attracting global investments to Seoul.
To respond to the rapidly changing global investment environment and promote investment attraction to Seoul, we plan to establish the Seoul Investment Promotion Foundation, the first institution dedicated to attracting investments at the local government level. Major cities abroad, such as London and Tokyo, each operate investment attraction agencies at the national and city level.
Once the foundation is established, we plan to systematically support all stages of investment, not only by attracting foreign capital to key corporations located in Seoul (promising startups, small and medium enterprises, etc.) with technological capabilities and business potential, but also through follow-up investment management. Additionally, aggressive promotion for Seoul will attract globally impactful companies to development sites such as Yongsan, Changdong, and Magok, ultimately contributing to economic revitalization and job creation in Seoul.