Strengthening the start-up ecosystem in non-capital regions… New supply of ‘1 trillion’ won regional-exclusive venture funds.

The joint plan of related ministries to enhance the competitiveness of regional growth support services includes expanding the corporate investment allowance ratio from 30% to 49%, reducing the private investment burden. Prime Minister and Minister of Economy and Finance, Choi Sang-mok, visited a central shopping district in Byeongjeom, Hwaseong-si, Gyeonggi-do on the 10th to listen to concerns raised by business owners. The government plans to strengthen the startup ecosystem in non-capital regions by providing over 1 trillion won in cumulative new regional venture funds. This was announced during an economic ministerial meeting chaired by Deputy Prime Minister and Minister Choi on the 13th, where the plan for enhancing the competitiveness of regional growth support services was presented. While Korea’s startup ecosystem has grown significantly quantitatively and qualitatively, the government believes that key achievements, such as venture capital investment, have been concentrated in the capital region. The “3+1 implementation strategy” outlined in this plan includes enhancing investment and nurturing services competitiveness, strengthening specialized services competitiveness in fields such as law, accounting, and design, developing and maintaining growth support service infrastructure, and expanding funding opportunities for venture and startup companies. The government has decided to gradually increase the regional fund regional accounting investment role, aiming to supply over 1 trillion won in new funds by 2026. It also plans to expand the corporate investment allowance ratio from 30% to 49% when local governments invest in private investment associations by 20% or more. Private investment associations are accelerator (AC) operated investment funds funded by individuals, private entities, and corporations. The government expects that the private investment burden, which currently stands at 70%, will decrease to 51% with this plan. The evaluation and guarantees for venture fund special guarantees from the Credit Guarantee Fund and Technology Guarantee Fund for excellent local investment and nurturing specialized companies will also be prioritized. To encourage reinvestment by local nurturing specialized companies, the plan includes gradually increasing investments in local AC secondary funds to reach a goal of investing 100 billion won this year and forming a total of 167 billion won. Support measures for local investment and nurturing specialized companies to accumulate performance and experience were also introduced. These companies have had limited opportunities to accumulate performance and capabilities through government projects. Hence, the evaluation score for local investment and nurturing specialized companies will be expanded when selecting a fund delegated operator for the mutual fund. Additionally, the government plans to gradually increase the number of privately-led Youth Entrepreneurship Academy Schools, currently at 5, and give priority to local nurturing specialized companies when selecting an operator for the Youth Entrepreneurship Academy School. In cases where local governments establish funds to address local community issues, they will prioritize the delegation of fund management to local investment and nurturing specialized companies. They will also introduce a new indicator related to ‘activating the local startup ecosystem’ in the local government joint evaluation index. Included in the support measures for local specialized service providers are providing extra points to these companies when selecting participants for voucher programs and establishing a standard model for providing information on business performance, among others. Other aspects of the plan include activating a collaborative network for startup-related organizations involving various innovation drivers and supporting startup mentors in transitioning to become startup nurturing experts by providing specialized education and mock investment opportunities.