Startup policy should not be approached with uniform standards like "7 years or 10 years in operation." We need precise policies tailored to capital size and a corporation's life cycle. I will serve as a bridge that creates real change between young innovative corporations and conservative government officials.
Korea Startup Forum (KOSPO) is redefining the organization's role on its 10th anniversary. It says it will shift beyond a simple credit entry group into a "problem-solving policy platform" that designs the next 10 years of Korea's startup ecosystem. Leading that transition is Kim Jae-won, CEO of ELICE Group, who took office in February as the forum's fifth chair.
Meeting at ELICE Group's headquarters in Seocho-gu, Seoul, on the 9th, Chair Kim cited the "weakened function of the listing market" as the biggest structural problem in the current startup policy environment.
Investment funds are now pooled only in the unlisted market, and conditions for KOSDAQ-listed corporations in the institutional market are actually deteriorating, creating a distorted structure that has become entrenched, Kim said, adding that it is urgent to restore a virtuous cycle of capital in which investment in the unlisted stage naturally flows into the listing market.
He also emphasized the need to revise the Commercial Act. The current Commercial Act and regulatory framework are effectively designed to manage conglomerate governance. They are not suited to capturing a dynamic startup ecosystem, Kim said, noting that if the structure of shifting excessive responsibility and penal provisions onto founders continues, capable talent will choose to start businesses overseas 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 extra budget. Some say it is out of touch with 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 may look improved, but in reality, funds are becoming more concentrated in a few corporations.
- If you were to propose more on-the-ground support people can feel.
For early founders lacking capital, it is worth considering allocating budgets that, instead of unemployment benefits, encourage proactive risk-taking while guaranteeing a minimal livelihood. For growth-stage corporations, we need to shift from one-off subsidies to a structure where investment-type funding continues organically.
- What is the biggest policy gap growth-stage startups point to?
There is a shortage of a protective "shield" that lets them grow. Even in the Generative AI market now, global services like Claude and ChatGPT effectively dominate the market. If the option to choose 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 stuck in a system integration (SI) project structure. Most startup solutions are subscription-based (SaaS). The budget execution framework itself should be changed so public institutions can purchase subscription services.
Also, under the current procurement structure, corporations that better match administrative specifications find it easier to win contracts than those with superior service quality. We need institutional flexibility such as expanding PoC (proof of concept) opportunities and converting to long-term contracts.
- Some say there are not enough standards for the public sector to adopt innovative technology with confidence.
I think KOSPO's role is to bridge that gap. Just as Google Play Store or Apple App Store reviews apps, KOSPO aims to serve as a "certification platform" that verifies innovative services. Through specialized councils by field—such as physical AI, defense, Climate Tech, and mobility—we will identify and certify services that can be used immediately in the public sector, helping ensure national budgets are spent meaningfully.
- How can conglomerates and startups grow together in the public procurement market?
Policy design is key. Simply excluding conglomerates will inevitably reduce service quality. When they cooperate, there should be clear incentives, and swift, strong regulation should accompany unfair practices such as technology theft.
- Recently, the role of local governments has also grown.
There is still a long way to go. Local governments must do everything from talent development to founding and retention—from zero to one. Simply attracting conglomerates or offering one-off incentives is ineffective. They must put everything on the line to attract overseas talent. In Silicon Valley, half of founders are immigrants.
By contrast, Korea's support for foreign workers is concentrated in manufacturing. Excellent international students who study at domestic universities often return to their home countries after graduation because they cannot find jobs. We need sophisticated incentives so they can start businesses and settle in the regions.
They also need to solve the problem of duplicate investments. For example, local governments are competitively building similar large language models (LLMs). They must move away from competition focused on administrative performance and enhance efficiency through an integrated utilization framework.
- How will you resolve clashes between new industries and regulations?
We need to segment where innovation is most urgently needed. Autonomous Driving is also connected to the issue of jobs for existing transportation workers. We should first introduce it in rural or mountainous areas or during late-night hours, where operating public transit is difficult, build empirical data, and then expand gradually.