[Kim Hyojin's Book Meal] The Playground of 'Neukdaedeul', Finland and Estonia

Mutant Wolves / Kim Young-rok / Sam & Parkers / 16,000 KRW

"Finland's success blossomed from the ruins of Nokia." The author, a startup ecologist and CEO of the Next Challenge Foundation, asserts this confidently.

The impact of Nokia on Finland's economy in 2011 was truly enormous. It accounted for 4% of the Gross Domestic Product (GDP) and bore 25% of exports. When Nokia collapsed in 2013, Finland's economic growth rate plummeted to minus 0.76%. The void left by Nokia was filled by startups led by young entrepreneurs.

Finland has a population of just 5.5 million, yet over 4,000 startups are created every year. Rovio and Supercell, famous for 'Angry Birds' and 'Clash of Clans,' as well as the online music streaming company Spotify, were all born in Finland.

In 2017, Finland's startup investment reached 349 million euros (approximately 450.8731 billion KRW), more than doubling compared to 2012. The government's bold removal of various regulations and significant expansion of collaboration between academia and industry played a crucial role. The World Economic Forum (WEF) names Finland as the 'most innovative country in the world.'

Neighboring Estonia has a land area about half that of South Korea. To make matters worse, half of that is forested. In the early 1990s, the country's GDP per capita was only $2,000 (about 2.3 million KRW), reflecting a difficult past. What exactly happened for Estonia's GDP to rise to $19,000 in 2018? The foundation of this high growth is the 2,000 startups created annually.

Many may not know Estonia, but they know Skype, the world's number one internet telephony company. TransferWise, the world's largest international remittance company, and Starship Technologies, the world's first food and beverage delivery robot company, also hail from Estonia.

Estonia's regulatory reforms are not just bold but daring and comprehensive. No matter how much money is earned, if reinvested in the company or deposited in a bank, corporate tax is zero. Thanks to its unique e-residency system, anyone can obtain Estonian residency for just 100 euros and start a business in Estonia without ever setting foot there. Currently, there are 5,000 foreign companies registered in Estonia.

Estonia's startup investment, which was 5.69 million euros in 2006, increased twentyfold in ten years. "Looking at Estonia raises the question, 'How far can innovation go?' Their answer is probably, 'Innovate until you cannot innovate anymore.'"

In the author's view, the world is a 'battlefield of paradigms.' Those who change paradigms hold the hegemony. Around the world, there are those who have dominated markets without huge capital through paradigm shifts. The author calls them 'mutant wolves armed with instinct and wildness.'

About 540 million years ago, before the so-called 'Cambrian Moment,' life consisted only of single-celled organisms, plankton, and bacteria. The British economic weekly The Economist described today's emergence of numerous small startups shaking the global economic framework as the Cambrian Moment.

To add to this, the present time we live in is a modern Cambrian Moment where mutant wolves, whose origins are unknown, have begun to roam freely.

Finland and Estonia share the denominator of deregulation. To explain the necessity and effects of deregulation, the author presents the case of the U.S. telemedicine startup Teladoc. Teladoc grew at an incredible speed, being called the 'Uber of digital healthcare.' After going public in 2015, its corporate value soared to 4 trillion KRW.

The author points out, "If this were South Korea, Teladoc would have to face investigations for illegal medical practice, and the company's management would have to stop immediately," adding, "Even Japan, which argued that 'society cannot function without manuals,' is boldly loosening regulations."

The author laments, "South Korea is very slow. The level of regulation felt by startup stakeholders on the ground is extremely frustrating." He then shares words from a startup CEO at the 'ABF in Seoul 2018' media conference.

"In conducting blockchain business, we went through lawyers and legal reviews. But 90 out of 100 things were told not to do. We were sanctioned by officials countless times. We heard over and over again that we must not do this or that."

According to a survey and report by Law Firm Lin (Tech & Law division), 30% of the top 100 global startups by cumulative investment cannot operate in South Korea. Thirteen can only operate with restrictions.

"What the Estonian government has shown can be summed up as a 'paradigm shift.' They completely broke down the 'fundamental assumptions' everyone had and forged a completely new path. The government's mindset to foster startups must be based on such a paradigm shift. Without this shift, a very strange phenomenon occurs: a 'not at all innovative government' supports and nurtures 'very innovative startups,' which is ironic."

The author cites South Korea's experience of government-led development as the cause of its heavily regulated and interventionist reality. The government has supported specific large corporations boldly and tasted the fruits of overall economic growth. This has fostered a culture where "the government wants to lead something."

Another cause is the lack of knowledge among public officials about the startup sector. Due to the nature of the common rotation system for public officials, they must leave their work area just as they become familiar with it. The author points out, "It's not because they are lazy or lack passion, but because they lack the time to properly understand the reality and come up with new methods."

The author continues, "Minimizing state interference" is a common trait of startup-leading countries like Finland and Estonia, urging, "To run alongside wolves chasing prey swiftly, you must match the wolves' speed."