South Korea's new administration plans to foster technology startups to reignite the country's venture boom, revitalize the slumping economy, and create jobs for young people.
Headed by president-elect Park Geun-hye, the country's new government will strive to create a business environment where small-sized companies can secure funds through angel capitalists, said a member of the presidential transition team who declined to be named, in a report by Yonhap News Agency on Sunday. The administration came into office on December 19, 2012.
"We have to encourage technology venture firms to create jobs for young people. In addition, they are good for economic growth because expansion boosted by big companies is in the doldrums," the anonymous member said.
The initiative, tentatively named "Venture Again", will be announced in the near future. The transition team also expects the new policy to help achieve Park's promise of a 70-percent employment rate in South Korea.
According to the report, this is not the first time South Korea has tried to encourage the growth of startups to stimulate economic growth. In the late 2000s, previous president Kim Dae-jung and his administration had pursued a similar strategy.
However, it seemed to work to an extent but was responsible for IT bubbles which burst in 2010 and greatly impacted the economy. Many fraudulent people also received government subsidies based on insubstantial technologies after allegedly bribing corrupted bureaucrats.
To prevent such incidents, Park's administration plans to help young entrepreneurs receive funds from the private sector such as angel capitalists, the unnamed member said. Venture firms with a technology edge will also be listed on the Korea Stock Exchange or receive loans from financial institutes.
Park recently said South Korea needed to emulate U.S. Silicon Valley, where angel capitalists proactively competed to invest in startups with high commercial potential without any infusion of state money.