Start-ups receive record investment

Source: Joongang Daily.

Korean investment in local start-ups reached a record high of 2.54 trillion won ($2.3 billion) last year, shooting up 61.9 percent over 2013, largely thanks to contributions from the private sector. According to data disclosed on Tuesday by the Small and Medium Business Administration (SMBA), more than half of the new investments came from the private sector, including commercial banks, pension funds, conglomerates and successful start-ups that have grown into large businesses.

The private sector’s contribution of 1.5 trillion won to local start-ups in 2014 showed a drastic increase over the previous two years, due to the Park Geun-hye administration’s efforts to boost start-ups. National policy funds – central and regional governments, the state-run Korea Development Bank and their joint funds – put about 1 trillion won into start-ups last year.

The SMBA added that there were 481 start-up funds operating at the end of last year, holding a total of 12.2 trillion won. The SMBA said that the bigger boost from the private sector is a sign that the nation’s start-up ecosystem has improved and became more attractive to investors.

For full article, see Joongang Daily.


Lending to technology start-ups takes off

2014_12_SME_startupLoans under the government’s “technology finance” initiative have reached nearly 6 trillion won ($5.4 billion).  A start-up created last September has a patent on enriching and refining waste produced in the manufacture of computer chips.

It is the first such technology in Korea, but the company lacked the collateral required for bank loans and was unable to secure the capital needed to build production facilities. But the start-up recently took out a 1.3 billion won loan from Shinhan Bank after the Korea Technology Finance Corporation (Kibo) and the bank conducted due diligence on the company and evaluated its technology. In addition, the technology-based company received 500 million won for management. Thanks to the loans, the start-up signed a contract with a conglomerate and expects about 1.5 billion won in annual revenue.

For full article, see Joongang Daily.

Government pours more funds into SME’s R&D

2014_01_money_researchSmall and midsize companies in Korea will be given more funding support by the government for their research and development this year. According to the Small and Medium Business Administration yesterday, the government will spend 818.4 billion won ($779 million) in 2014 in the R&D sector for SMEs, up 1.8 percent, or 14.7 billion, compared to the previous year.

The move is in line with the current administration’s focus on boosting a so-called creative economy and realizing “economic democratization” by nurturing SMEs. Not all SMEs, however, will benefit from the extended funding this year. The SMBA has categorized SMEs into different groups based on their performances and companies in each category are expected to receive different amounts of support after deliberation by the government.

For full article, see Joongang Daily.

SMEs to enjoy 50% tax exemption for gains from tech transfer

Small and medium-sized enterprises will get a 50 percent tax exemption from income earned by technology transfer from January next year at the earliest. A company that takes over or merges with a venture firm will also be exempted from corporate tax by a certain ratio.

The Science, ICT and Future Planning Ministry announced “Measures to galvanize private sector R&D investment” at the 3rd National Science and Technology Council meeting on Friday. The measures are meant to improve the current situation of lackluster R&D by SMEs, with the number of companies running affiliated R&D centers only accounting for 0.8 percent (26,381 firms) of the SMEs in Korea. For starters, tax benefits will increase. SMEs will enjoy a 50 percent exemption in corporate tax or income tax for gains from technology transfer. If this policy, which was revoked in 2005, is reinstated, 540 SMEs stand to benefit.

If a company takes over or merges with a venture firm, or “technology innovation firm,” which invests more than 5 percent of its sales in R&D, the former will enjoy corporate tax exemption amounting to 10 percent of the value of technology concerned. If the two firms are not in special relationship, the company that is taken over will be exempt from transfer tax.

For full article, see Dong-a Ilbo.

Seminar: Innovative Growers in the Creative Economy

In the morning of 18 November, KIAT, KITECH and the Netherlands embassy will organize a seminar, where several innovative high tech SME’s from the Netherlands and Korea will present their road to success in the highly competitive semicondutor and mechatronics sector. Through constant investment in R&D, they have become a leader in their specific niche market. In the afternoon, a matchmaking will take place. During 30 minutes’ meetings, you will have the chance to meet one or more of the Dutch companies to discuss possible future business or joint projects.

Date: 18 November, 2013
Time: 09:00 ~ 17:30
Location: Seoul Plaza Hotel
Room: Grand Ballroom

For the seminar and matchmaking, please register online on:

The following Dutch companies will be present:

Admesy (colorimeter, spectrometer, Spectrocolorimeter)
Download 1: Company profile

Brabantse Ontwikkelingsmaatschappij (Regional development agency)
Download 1: Company profile

Lionix (microfluidics, optofluidics, integrated optics, MEMS & micro machining)
Download 1: Company profile

NL Agency (Eureka/FP7 national contact points, EU-subsidy programs, technology matchmaking)

NTS (design, engineering, assembly & production of opto-mechatronic modules & parts)
Download 1: Company profile

Saxion University of Applied Science (nanotechnology)
Download 1: Nano technology

Storgrid (cloud computing, data management, data security)
Download1: Company profile

TNO Industrial Innovation (R&D institute, mechatronics, vacuum technology, prototype development)
Download 1: Company profile
Download 2: References
Download 3: TNO intro (한문)

For registration of this event, please visit:

Some start-ups get big and grow at faster rates

2013_07_SMEsKorean start-ups have grown over the past eight years with 416 companies now having annual revenues of more than 100 billion won ($89.3 million). Companies such as Nexon and NHN now have yearly sales of over 1 trillion won.

The Small and Medium Business Administration (SMBA) and the Korea Venture Business Association (KOVA) released the Venture 100 Billion Club yesterday, an annual survey of start-ups with sales of more than 100 billion won. Despite the ups and downs of the economy since the 2008 global financial meltdown, start-ups showed notable gains in the past eight years. Six companies currently report 1 trillion won in sales annually and 54 companies reached the 100 billion won sales mark last year.

Meanwhile, 19 companies saw their sales dip below 100 billion won. Among the 54 companies, 14 of them were in the computer, semiconductor and electronic components industry and 11 were in food and beverage, textiles and non-metals industries.

For full article, see Joongang Daily.

Goverment to raise share of R&D budget for SMBs to 18 pct by 2017

????³?????????????????????????????????????????????????????????????????????­????????????????????????­????????­??³????É??????????­????????????????????­??????????????³?????????????The South Korean government determined to allocate a higher share of its total budget for research and development (R&D) to small-sized and mid-sized companies over the next five years. The share will go up 4.4 percentage points to 18.0 percent by 2017.

The government also decided to increase R&D investment in sectors that deal with the aging, disabilities, diseases, tourism, education and social services as their performance is highly linked to the public’s quality of life.

Such decision was reached at a meeting of national science and technology evaluation committee convened by the Ministry of Science, ICT and Future Planning Wednesday.

In a bid to promote a science and technology-based creative economy and bring happiness to people, the ministry proposed four major goals of supporting R&D so that it can 1) bolster a creative economy; 2) bring happiness to people; 3) enhance key capacities for innovative and creative science and technology, and 4) improve the government’s R&D investment system.

For full article, see Maeil Business.

Minister Yoon Sang-jik promises R&D tax credit for SMEs

The Korean government will raise the R&D tax credit for SMEs, which currently holds at 30%, up to 50% to shoulder the burden of R&D expenditures on SMEs and will help enhance price competitiveness by lowering electricity surcharges that have been imposed on companies. Furthermore, the government has pledged all-out support for the creation of MRO (Maintenance, Repair and Operations) companies by SMEs.

In a meeting with the CEOs of Korean SMEs on Thursday, Yoon Sang-jik, Minister of industry, trade and resources said, “The government will expand tax deductions to promote SMEs’ R&D activities and will relax the electricity surcharge system next year. And I will consult with relevant ministries to push for tax credits for SMEs’ efforts to nurture R&D talent.”

The electricity surcharge system was introduced in 2011 to levy surcharges on companies’ electricity use during evening hours and winter time.

Minister Yoon also mentioned, “It has been rumored that large companies’ MROs are still trying to encroach on the SME realm. Thus, the Korean government will provide policy support for like-minded SMEs’ moves to jointly set up an MRO company.”

For full article, see Korea IT Times.

Park urges chaebol-SME coprosperity

President Park Geun-hye called for a change in the nation’s economic paradigm to foster coprosperity between conglomerates and small and medium-sized firms. She made the instruction during policy briefings from the Ministry of Trade, Industry and Energy and the Small and Medium Business Administration at Cheong Wa Dae on Monday.

“Our economy reliant on big companies should be transformed into an economic structure where exports and domestic consumption are boosted simultaneously, and conglomerates and SMEs prosper together,” Park said. The nation’s economy should also create an environment which encourages creativity and ideas in a knowledge-based society, Park added.

The Commerce Ministry reported that it would come up with measures to crack down on malpractices at chaebol, or South Korean family-controlled big business groups, particularly in cash payments to their small and mid-sized suppliers.

For full article, see Korea Herald.

Park promises to give more support to SMEs

When President Park Geun-hye visited the Korea Federation of Small and Medium Business last month, the fact that she went there before paying a call on the group representing the nation’s largest conglomerates seemed to highlight her commitment to supporting small firms. “Shared growth” between large and small companies has been a key policy goal of the government for years, and it is expected to gain momentum under Park, who took office on Monday.

The government currently offers some 160 incentives, including tax benefits, for small and medium enterprises, but most of them still have trouble finding workers of high caliber, in large part because many young Koreans prefer big firms, and can’t invest much in research and development. To keep large companies from hurting SMEs’ business, a state-funded panel designates trades deemed suitable for only SMEs, such as bakeries and restaurants, and advises large firms to stay away from them.

For full article see Korea Herald.