The South Korean government will intensively develop Daejeon, Daegu, Gwangju, and Ulsan — home to the country's four science and technology institutes — into startup cities centered on tech talent. Approval procedures for professors and students seeking to launch startups will be significantly streamlined, and a regional growth fund will be expanded to 2 trillion won ($1.5 billion) by 2030 to back investment.
The government announced the "Startup City Development Project" at the National Startup Era Strategy Meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol on Wednesday. The plan was put forward jointly by related ministries.
The project aims to elevate the startup ecosystem to a global level, centered on regional hub startup cities.
The government will first designate the locations of the four science and technology institutes — Daejeon (KAIST), Daegu (DGIST), Gwangju (GIST), and Ulsan (UNIST) — as startup cities to build a pilot model. Support will be provided as a package covering talent, research and development (R&D), investment, and startup space.
To nurture startup talent, the Innovation Startup Center, currently established only at KAIST, will be newly set up at the three other science and technology institutes. The Deep Tech Startup-Focused University program, currently designated only at UNIST, will be expanded to all four institutes by next year.
To encourage startups by professors and students, the startup approval procedure will be shortened from up to six months to about two weeks, and the cap on startup leave (currently three years) will be extended to up to seven years. The four-year limit on startup academic leave will also be abolished, significantly easing academic regulations.
Complex startup spaces will also be greatly expanded. Startup Parks and Angel Investment Hubs will be increased to 10 and 14 locations respectively by 2030, and startup infrastructure (spaces and demonstration facilities) being built at each science and technology institute will be opened up for use as startup hubs.
Up to 350 million won in commercialization funding will be provided to 160 startups in specialized industries within the startup cities. The regional growth fund will be raised to more than 450 billion won this year and expanded to 2 trillion won by 2030. Dedicated R&D support favoring startups in startup cities will be strengthened, and more than 50% of Tech Incubator Program for Startup (TIPS) funding will be allocated to companies in non-capital regions. The government will also work with cross-ministry hub development projects to improve housing, transportation, and cultural conditions so that regional entrepreneurs can continue to settle in their areas.
The government plans to select six additional startup cities, mainly in non-metropolitan regions, by the first half of next year, bringing the total to 10. The six additional cities will be chosen in consideration of regional flagship industries such as venture finance and energy, as well as balanced regional development.
Following defense, the government plans to sequentially announce support measures for deep-tech innovation startups in pharmaceuticals and biotechnology, climate technology, and other sectors.
A three-part package to induce private investment will also be introduced. To spur venture investment from the private sector, incentives for venture investment in non-capital regions will be strengthened, and stock trading for early-stage companies will be revitalized. Retirement pension funds will be allowed to make venture investments, and venture investment incentives will be expanded in the evaluation of pension fund operations to attract capital inflows.
"Startups are a jobs and youth policy, as well as a strategy for balanced regional growth and national growth," Koo said. "We will create an environment where anyone with an idea can start a business anywhere."
