[Startup Struggle⑦-1] Park Young-sun "New Technology Companies Must Also Consider 'Inclusive Growth'"

Park Young-sun, Minister of SMEs and Startups, Emphasizes 'Collaboration' with the Keyword Sharing Economy
Many Startups Still Face Difficulties Due to Conflicts and Regulations with Existing Industries
"Tada and Baemin Should Not Be Used for Political Issues Like Elections"
"New Technology Companies Also Need 'Inclusive Growth' Pursuing Social Value"
Transition to Digital Economy... Need Dialogue and Education with Small Business Owners
"Government Consensus Formed on Introducing Venture Stock Options and Differential Voting Rights... Announcement Soon"

Minister Park Young-sun of the Ministry of SMEs and Startups is being interviewed on the 17th at the Ombudsman Support Group of the Ministry of SMEs and Startups in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Han Jinju] "The characteristic of the sharing economy is that the strong survive. Strong companies are those loved by consumers. This is why new technology companies must keep 'inclusive growth' in mind."

Tada failed to overcome conflicts with the taxi industry and now faces regulatory threats. Baedal Minjok was acquired by Delivery Hero but faced backlash from small business owners. This is the current status of startups that have grown domestically. New services or attempts inevitably clash repeatedly with existing industries, making government efforts crucial at this point. Park Young-sun, Minister of SMEs and Startups, who heads the dedicated department for startup and venture policies, proposed 'inclusive growth' as the solution.

On the 17th, at Dongduk Building in Jongno-gu, Seoul, Minister Park said, "I met with Lee Jae-woong, CEO of Socar, and urged an inclusive approach befitting a leader in the sharing economy. Regarding the Baedal Minjok issue, I facilitated behind-the-scenes talks and meetings to help both sides understand each other," adding, "The government must lead both the existing industries with carriages and new companies like Tada together, and it is important to continuously promote mutual understanding through dialogue."

Minister Park also criticized the National Assembly's moves to strengthen startup regulations as a political issue, separate from dialogue between new and existing industries. She said, "Tada has been having behind-the-scenes talks with the government, but the revised bill in the National Assembly has gone beyond that level. The government needs to maintain balance," and pointed out, "It is very undesirable for Tada and Baedal Minjok to be used as political issues like elections. It makes it difficult to reach wise conclusions."

Minister Park Young-sun of the Ministry of SMEs and Startups is being interviewed on the 17th at the Ombudsman Support Group of the Ministry of SMEs and Startups in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

- Inclusive growth is increasingly valued not only as a growth value for large corporations but also for startups.

▲ The most important keyword in the sharing economy is 'collaboration.' Companies that survive mergers and acquisitions (M&A) or competition are strong companies, and to survive steadily, companies must be loved by consumers. Companies with new technologies like Tada should keep inclusive growth that pursues social value in mind. Making consumers and the public feel reassured and continuously loved is also an important point in management strategy. The government’s role is necessary to provide answers as to why Makaron has no friction with the taxi industry while only Tada faces conflicts.

- After Baedal Minjok was sold to Delivery Hero, small business owners strongly opposed the commission fee increase. This is regrettable as domestic startup M&A is already sluggish.

▲ The main purpose of startups is exit (sale), and viewing this negatively is not desirable. However, strategic consideration for those who may suffer damage during the M&A process is necessary. If affection for the company turns into hatred or anger, the effect of M&A inevitably diminishes. When I met Kim Bong-jin, CEO of Woowa Brothers, I conveyed to him to continuously engage in dialogue with those concerned about potential harm. Behind-the-scenes talks with small business owners are ongoing, and meetings have been facilitated.

- While unicorn companies with platforms are growing overseas, domestically, businesses related to small business owners are trapped in the frame of infringing on neighborhood commercial districts.

▲ This year’s policy goal is set as 'Great Transition to Digital Economy, Smart Korea.' Naver started the 'Neighborhood Grocery Shopping' service at Gangdong Amsa Market. Startup Freshmento leads the service to order market store goods online, but persuading merchants was the most difficult part. One merchant said, "You are taking all our customers," showing how perceptions have not changed. In such a transition period, 'communication' is important. It is crucial to continuously inform and educate small business owners that everything will become inconvenient if they do not transition to the digital economy.

- With rapid population aging, there is strong resistance to new industries based on the digital economy. Is there a solution?

▲ It is not easy, so the government must step in. We must help where things do not work. The rationale for nurturing startups is the same. Since it is very difficult for sprouts to grow, the government helps until the buds sprout. We cannot abandon those who have carriages during this great transition. It is important how the government balances and leads inclusive growth within this huge flow.

- Startups have long been perceived mainly as support targets. What policies are needed to lead scale-up?

▲ The role of the Korea Fund of Funds is important for scale-up, but the role of growth finance is also crucial. This needs to be discussed with the Financial Services Commission. I hope cash held by large corporations will be released toward scale-up. Too much liquidity in the market is concentrated in real estate, so opening the way for venture investment is also important. The Venture Investment Promotion Act has passed, making it easier to create private funds. We plan to expand growth finance-related policies while drafting enforcement ordinances in June.

Minister Park Young-sun of the Ministry of SMEs and Startups is being interviewed on the 17th at the Ombudsman Support Group of the Ministry of SMEs and Startups in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

- It is also important to solve the structural problem of the domestic startup ecosystem being undervalued compared to overseas.

▲ Investment from large overseas venture capitals is relatively low. One reason is the difference in unwritten investment rules. Silicon Valley has standard contracts and defined Series A, B, C investment stages, but in Korea, contract terms change with each investment. Overseas investors find it difficult to assess market trust and maturity. In Silicon Valley, founders get 40%, investors 40%, and employees 20%, but such rules are not established in domestic startups. This is not a matter for the government, but I hope the private sector discusses creating our own unwritten rules like Silicon Valley.

- Shouldn’t there be acceleration in expanding the stock option tax exemption limit and easing regulations on venture dual-class voting rights, as demanded by the venture industry?

▲ I view this positively. Discussions on expanding the stock option tax exemption limit are underway. Regulations on dual-class voting rights must pass the National Assembly. Within the government, there is consensus on allowing dual-class voting shares only for unlisted ventures. Specific details will be announced soon.

- You were the first minister appointed as a board member of the Davos Forum. What is the key message you want to emphasize in your lecture?

▲ The World Economic Forum annual meeting (WEF, Davos Forum) is very interested in smart factories. In Korea, POSCO was selected as the first lighthouse factory, and I plan to discuss standardization work for smart factories. We need to consider linking with Davos to enable more companies to participate in the startup festival 'ComeUp 2020.' This year’s theme is the continuous growth and digitalization of startups and SMEs, which will be a great opportunity to promote Korean startups.