The city of Seoul is facing an increased possibility that some startups residing in the 'Campus Town Corporations Growth Center' will have to relocate without completing their contract period.
According to a report from ChosunBiz on the 1st, startup A Company signed a contract to reside in the Campus Town Corporations Growth Center in Gwangjin-gu, Seoul, for one year starting in May of this year.
However, the city of Seoul has set the commissioned operation period for the center to the end of February next year, placing it in a situation where it could be evicted from the center. Typically, a review is conducted to decide whether to extend the contract at the end of the one-year period.
An official from A Company noted, "Many corporations applied because there was a public announcement at the beginning of this year stating they could reside for up to three years."
He continued, "We also moved our employees nearby when we settled here, and while some companies have to move their machinery, others have brought employees along during the move, so everyone is in a difficult situation."
Startups, including A Company, secured their spots at the center amidst high competition in the first half of this year, but they will need to find new office space next year.
Changes began as the 'RIIZE (Regional Innovation Center University Support System)' project, promoted by the Ministry of Education, started to take off. The city of Seoul has been facilitating startups' scale-up and hub functions through the center.
However, as the support function for startup growth transitioned to universities due to the RIIZE project, the operational purpose of the center has also been reduced. Consequently, the city of Seoul decided not to extend the commissioned operation contract set to expire in February next year.
Including this case, startups are experiencing frequent confusion due to unexpected policy changes.
Last year, the Ministry of Small and Medium Enterprises and Startups announced that it would cut existing subsidies by about 20% for corporations selected for the TIPS (Tech Incubator Program for Startups) program and currently conducting research and development in 2022 or 2023, leading to controversy.
Due to budget shortages in 2023, unpaid subsidies were also included in the cuts. Amid raising issues within the startup community, the ministry withdrew the cut decision within two weeks, but the situation has not easily calmed.
An official from B Company mentioned, "During a recent meeting with the city of Seoul, I asked whether we could move to nearby institutions, but I did not receive a definite answer."
He added, "I am currently looking for a new office with my team and stated that consistent policies from the government or local governments are necessary for attracting talent and ensuring that research and development proceed without disruption."
The city of Seoul stated that it plans to support startups that could not complete their contract periods at the center by linking them to other startup spaces.
An official from the city of Seoul said, "To guarantee the contract period, we plan to negotiate to allow corporations to enter other Campus Towns if they wish and are also looking into whether they can relocate to an organization called 'Seoul Startup Hub' operated by the city of Seoul."