Assemblyman Shin Jeong-hoon: "Serious Concentration of Venture Investment in the Capital Region"

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] It has been revealed that the concentration of venture investments, including government venture investments and angel investments, in the Seoul metropolitan area is severe.

According to data submitted by the Ministry of SMEs and Startups to Assemblyman Shin Jeong-hoon (Democratic Party, Naju-Hwasun) of the National Assembly's Industry, Trade, Resources, Small and Medium Enterprises Committee on the 9th, the proportion of investments by government mother fund sub-funds in the metropolitan area reached 80% of the total amount over the past five years. Yearly data from 2016 to August this year also show an extreme concentration around 80%.

In particular, venture investments in the Honam region are at even poorer levels, with Gwangju at 0.8%, Jeonnam at 0.5%, and Jeonbuk at 0.6%. Following the manufacturing sector, the polarization between regions has extended to investments in the venture ecosystem that will lead future industries, which is expected to negatively affect balanced regional development in the future.

Moreover, angel investments, which are directly linked to nurturing early-stage startups, have also shown a severe concentration, with as much as 76% focused in the metropolitan area over the past five years.

Especially, 85.2% of professional individual investors (professional angels) who lead angel investments and 69.6% of angel clubs are concentrated in the metropolitan area, confirming an extreme polarization of the angel investment infrastructure.

Assemblyman Shin Jeong-hoon pointed out, “Government support policies for venture investments such as the mother fund have failed to resolve the imbalance between the metropolitan area and other regions. While quantitative expansion of venture investments is important, if regional disparities are not resolved, national balanced development will become even more difficult.”

He added, “The Ministry of SMEs and Startups must take a more proactive role in fostering regional venture ecosystems and prepare effective measures to expand regional investments.”