Startup policy should not be approached with uniform criteria like "7 years or 10 years in operation." We need precise policies tailored to capital size and the corporate life cycle. I will serve as a bridge that creates real change between young innovative corporations and conservative government officials.
Korea Startup Forum (KOSFO) is redefining the organization's role on its 10th anniversary. It says it will shift from a simple credit entry group to a "problem-solving policy platform" that designs the next 10 years of Korea's startup ecosystem. Leading that transition is Chair No. 5, Kim Jae-won, head of Ellis Group, who took office in February.
Meeting at Ellis Group's headquarters in Seocho-gu, Seoul, on the 9th, Chair Kim cited the "weakening function of the listing market" as the biggest structural problem in the current startup policy environment.
Investment money is now pooled only in the unlisted market, and an abnormal structure has taken root in which the environment for KOSDAQ-listed companies in the institutional market is becoming even more unfavorable, Kim said, adding that it is urgent to restore a virtuous capital cycle in which investment at the unlisted stage naturally flows into the listing market.
He also stressed the need to amend the Commercial Act. Chair Kim said the current Commercial Act and regulatory framework are essentially designed around managing conglomerate governance and are not suitable for capturing a dynamic startup ecosystem. If the structure that shifts excessive responsibility and criminal penalties to founders continues, talented people will choose to start businesses abroad instead of in Korea.
The following is a Q&A with Kim.
-You urged swift passage of the startup support budget included in the recent supplemental spending bill. Some say it is removed from people's livelihoods.
Nurturing founders is a livelihood policy that, in the short term, grows "employers" who will hire young people, and in the long term, an investment that builds future growth industries. On the surface, indicators of the startup ecosystem appear to have improved, but in reality, capital concentration in a few corporations is intensifying.
-If you were to propose more support that can be felt on the ground.
For early founders with limited capital strength, it is worth considering allocating budget in a way that guarantees a minimum livelihood while encouraging proactive risk-taking instead of unemployment benefits. For corporations in the growth stage, we need to shift from one-off subsidies to a structure where investment-type funding connects organically.
-What is the biggest policy gap growth-stage startups cite?
There is a lack of a protective "shield" to help them grow. Even looking only at the Generative AI market now, global services like Claude and ChatGPT have virtually dominated the market. If the option for homegrown services disappears, Data Sovereignty will inevitably weaken. Central and local governments should become the "first buyer" of innovative services to create markets.
It is also a problem that the public market still remains in a system integration (SI) project structure. Most startup solutions are subscription-based (SaaS). The budget execution structure itself must be changed so public institutions can purchase subscription services.
In addition, under the current procurement structure, corporations that better fit administrative specifications than service quality are more likely to win orders, which is a blind spot. We need institutional flexibility such as expanding PoC (proof of concept) opportunities and converting to long-term contracts.
-There are also claims that standards are lacking for the public sector to safely adopt innovative technology.
I think KOSFO's role is to bridge that gap. Just as Google Play Store or Apple App Store reviews apps, KOSFO aims to serve as a certification platform that verifies innovative services. Through specialized councils by sector—such as physical AI, defense, Climate Tech, and mobility—we will discover and certify services that can be used immediately in the public sector to help ensure national budgets are spent meaningfully.
-How can conglomerates and startups grow together in the public procurement market?
Policy design is crucial. Simply excluding conglomerates will inevitably lower service quality. When they cooperate, there should be clear incentives, and swift, strong regulation must accompany unfair practices such as technology theft.
-The role of local governments has recently grown as well.
There is still a long way to go. Local governments must do everything from talent development to founding and sustaining businesses—from zero to one. Simple efforts to attract conglomerates or provide one-off incentives are ineffective. In particular, they must go all in on attracting overseas talent. In Silicon Valley, half of founders are immigrants.
In contrast, support for foreign workers in Korea is concentrated in manufacturing. Excellent international students who study at domestic universities often cannot find jobs after graduation and return to their home countries. We need to craft precise incentives so they can start businesses and settle in the regions.
They must also resolve the problem of duplicate investment. For example, local governments are now competitively building similar large language models (LLMs). We need to move away from competition focused on administrative performance and enhance efficiency with an integrated utilization framework.
-How will you resolve clashes between new industries and regulation?
We need to segment where innovation is needed most. Autonomous Driving is also linked to the issue of jobs for existing transportation workers. We should prioritize deployment in mountainous rural areas or late-night hours where operating public transit is difficult, build empirical data there first, and then gradually expand.