(ATTN: RECASTS 6th para to change target year to 2022 from 2020 as revised by Cheong Wa Dae)
SEOUL, March 6 (Yonhap) -- President Moon Jae-in on Wednesday vowed increased support for venture firms as the key driver of innovation and growth.
Moon has been putting an increasing emphasis on regulatory reforms and new technology businesses recently as his trademark income-led growth policy apparently failed to spur employment and consumption last year.
During a briefing on venture business policies, he noted countries across the world are competing fiercely to take the lead in new innovative businesses and that the importance of venture firms will only grow in the so-called fourth industrial revolution driven by new technologies and convergences.
"Venture companies are setting the course of the global economy," Moon said in the meeting at a Seoul start-up support center also attended by some 100 venture business heads.
"In the era of the fourth industrial revolution, convergence and speed, innovation and challenging attitude are important. Venture companies will decide industrial development and economic growth. The capacity to create new ventures and startups will be a key element in the competitiveness of a nation," he said.
Moon promised at the meeting to increase the number of local unicorn companies to 20 by 2022 from the current six. A unicorn company refers to an unlisted startup with a valuation of more than US$1 billion.
In comparison, the U.S. topped the list with 151 unicorn companies, followed by 80 in China, 17 in Britain, 13 in India and 8 in Germany.
"Despite our joint efforts, there have been many difficulties in turning our venture firms into global companies. There have been difficulties for a startup to scale up and become a unicorn company," the president told Wednesday's meeting where the government also revealed its plans to start what it called the second venture boom.
"Now the government seeks to move beyond from building a nation of startups to building a nation where venture firms can grow and leap," said Moon.
To this end, the government will create an investment fund worth 12 trillion won ($10.65 billion) over the next four years to specifically help scale up new startups.
The number of venture companies rose to 37,000 in 2018 from 31,000 in 2015. The combined investment in new venture firms stood at 3.4 trillion won last year and the government hopes to raise the investment to 5 trillion won in 2022, according to the Ministry of Economy and Finance.
The government will also promote mergers and acquisitions (M&As) to make it easier for venture capitalists to realize their earnings so they can make fresh investments.
To this end, the government will work to expand the investment recovery rate through M&As from 2.5 percent in 2018 to over 10 percent in 2020, the president said.
"What I can promise you for certain here is that the government will help you by becoming your partner, supporter. I ask that you too stand in front to lead more young people and innovators," he added.
Also Wednesday, the government said it will launch a program within this year to find promising startups in information and communications technology sector and help them reach unicorn status, the economy ministry said.
Currently, only six South Korean companies have reached unicorn status: Coupang, a top e-commerce company; video game maker Bluehole; Yello Mobile Inc., a mobile lifestyle platform provider; Woowa Brothers Corp., operator of the popular food delivery app Baedal Minjok; L&P Cosmetic Co., a leading skin care company; and Viva Republica, the operator of easy mobile remittance service Toss, according to the Ministry of Economy and Finance.
The ministry also said the government will create innovation hubs in Seattle and New Delhi in June and August, respectively to help South Korean startups make inroads into foreign countries.
Currently, South Korea operates innovation centers in Silicon Valley, Berlin, Washington D.C. and Beijing to offer step-by-step accelerating programs for South Korean technology companies to expand their business in the global market.
The government also plans to include executives of startups on a list of business leaders who accompany Moon on his overseas visits as part of efforts to allow them explore new business opportunities.
Hong Nam-ki, the minister of economy and finance, said Seoul will expand support to facilitate startups in bio-health, fin-tech, artificial intelligence and information and communications technology sectors.
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