Among young entrepreneurs, criticism has emerged that the regulatory sandbox system lacks effectiveness. Some on the ground even argued that "it is actually more advantageous not to be selected."
The Korea SMEs and Startups Agency (KOSME) ombudsman said on the 28th that it visited the Youth Startup Academy at the Korea SMEs and Startups Agency (KOSME) in Buk-gu, Gwangju, to hear entrepreneurs' regulatory difficulties.
The meeting was arranged to review the administrative barriers faced by corporations in their early stages of founding. The ombudsman and the Korea SMEs and Startups Agency (KOSME) have co-hosted on-site meetings since 2015.
On site, delays in institutionalization after the regulatory sandbox were a central issue. The head of a startup operating an artificial intelligence (AI)-based brokerage platform said, "Even after demonstrations end, related laws and regulations are not revised, creating a 'death valley' where business stops."
The person said, "If inter-ministerial consultations drag on, situations can arise where it is actually more advantageous not to use the regulatory sandbox," adding, "There needs to be a legal basis to extend the validity period of special cases so that business can continue until the laws and regulations are revised."
The ombudsman's office also acknowledged the limits of the system. Ombudsman Choi Seung-jae said, "A significant number of approved demonstration projects are not leading to institutionalization," adding, "Transitions are being delayed by differences among ministries and legislative holdups."
Choi added, "It is necessary to supplement the system by operating special-case applications flexibly or extending their validity period."
At the meeting that day, various proposals were also raised, including securing sales channels, extending the validity of startup corporation verification certificates, and corporate tax cuts for young people.
Before the meeting, the ombudsman inspected a site slated to introduce an HACCP manufacturing facility for a meal kit business and toured the prototype production room and studio inside the Youth Startup Academy.
Afterward, the team visited SOS LAB, an Autonomous Driving parts corporation, to hear about the difficulties of technology-based startups. The corporations demanded expanded support for research and development (R&D) that reflects not only financial criteria but also technological capability and growth potential.
Cho Han-gyo, director for talent growth at the Korea SMEs and Startups Agency (KOSME), said, "We will strengthen our role so that on-site opinions can be reflected in policy," and Ombudsman Choi said, "We will push for institutional improvements so that startup corporations do not lose opportunities due to administrative procedures."