South Korea and Innovation: The Numbers of an Ecosystem that Attracts Investors and Companies

Why is South Korea so attractive to international investors?

Firstly, let’s examine why large companies should consider South Korea. The scaleup ecosystem in South Korea has seen significant growth in recent years. Just a decade ago, the ecosystem was almost non-existent, and even three years ago, it lagged behind many other countries. However, South Korea has made remarkable progress, surpassing France and Germany in Scaleup Investing Ratio and the number of scaleups. This achievement in such a short period is impressive, and it indicates that South Korea is on track to continue growing. Therefore, it would be short-sighted for companies not to establish a presence there, as in a few years, it might be too late.

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One of the key drivers of growth in South Korea’s innovation ecosystem is the unwavering support from the government. In 2023, the South Korean government plans to invest $11 billion in the startup ecosystem, equivalent to 0.6% of the country’s GDP. This investment has already resulted in the emergence of 13 unicorns in South Korea, surpassing Japan’s count of six. Moreover, the government’s commitment to promoting innovation and entrepreneurship extends beyond startups. The budget is also allocated to encourage large companies to engage in open innovation activities, further stimulating the market. Notable companies like Samsung, LG, and others have already been actively involved in investing in startups, with Samsung alone allocating close to $2 billion in capital. Overall, South Korean companies, both from the old and new economy sectors, have been investing approximately $1 billion per year since 2015.

Booming industries

Now, let’s delve into the technologies in which South Korea excels. One notable area where South Korea has made a significant impact is the K-culture, which encompasses music, art, video-games, films, and tv shows, generally expanding South Korea’s global cultural influence. The digital media and gaming industries, which initially emerged as centers of innovation, now account for 16% of the country’s scaleups. With the rising focus on the Metaverse, these industries are evolving within a more complex digital technological context that includes 3D content creation, augmented reality, audio-video, streaming, and broadcasting. South Korea has a long-standing tradition of quickly adapting to new technologies and an innate ability to make them smaller, cheaper, and faster. Companies like Samsung and LG are prime examples of how South Korea has consistently been at the forefront of technological innovation.

Beyond the technology sector, South Korea is also making its mark in the fashion industry. Seoul, the capital of South Korea, is emerging as a fashion capital with its distinct street style and innovative trends. During the Seoul Fashion Week held at the Dongdaemun Design Plaza, fashion enthusiasts and photographers gather to witness the unique and subversive fashion expressions. The fashion scene in Seoul embraces a diverse range of styles and personalities, breaking away from Western fashion conventions. The event showcases both established and emerging Korean brands, attracting international buyers looking for design propositions and competitive prices.

The growing attraction of Korean fashion lies in its refreshing diversity and the increasing global demand for “Made in Korea” products, trends, and culture. Seoul Fashion Week aims to promote Korean fashion and the domestic market while emphasising media exposure and commercial projection. The event features fashion shows by approximately 30 Korean brands and a professional trade show, the Seoul Trade Show, where more than 60 fashion, footwear, jewelry, and accessory companies.

Conclusion

South Korea’s innovation ecosystem has gained substantial momentum, captivating the interest of both investors and companies. Backed by a resolute commitment from the government, a focus on critical technologies, and a culture of adaptability, South Korea presents a compelling opportunity for those seeking to participate in its dynamic startup landscape.

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