[Viewpoint] Reflecting on the 2021 Venture and Startup Ecosystem

The Year of the Ox is coming to an end. At the beginning of the year, expectations were high that the COVID-19 pandemic would end and many sectors of the economy and society would return to normal. However, the emergence of a stronger variant called Omicron plunged the global community into chaos. Despite the halt in the recovery of daily life and the tightening of quarantine measures, it is noteworthy that the venture and startup ecosystems both in Korea and abroad have achieved significant results.

In my judgment, the most notable achievement is Coupang's listing on the New York Stock Exchange in the United States. Despite numerous controversies, Coupang successfully settled in the U.S. stock market, elevating the status of Korean ventures and startups and instilling confidence that Korean startups can be recognized in the large U.S. market.

Moreover, Coupang has once again highlighted the importance of startups in job creation. Based on the four major social insurances, Coupang, established in 2010, had 59,066 regular employees enrolled in the National Pension as of last October. This is an increase of about 10,000 compared to 49,969 at the end of last year. In terms of total employment, it ranks third after Samsung Electronics (111,044 employees, established in 1969) and Hyundai Motor Company (68,518 employees, established in 1967). According to the Ministry of SMEs and Startups' startup statistics, a large portion of new jobs is created through startup ventures.

The second achievement is that the fierce competition for talent in the venture and startup sector has brought many changes to the human resource systems of large corporations. Although the need for excellent technical talent has been raised in the past due to the technology-oriented nature of ventures and startups, today, unlike before, a phenomenon has emerged where outstanding talent is drawn to startups based on abundant investment funds and stock options for talent acquisition. Technology-oriented ventures such as Baedal Minjok, Coupang, and Market Kurly utilize these abundant funds and systems to offer salaries and benefits that surpass those of large corporations. In response, large corporations have introduced new HR systems, removing the age limit for executive promotions and adopting merit-based promotion systems one after another. Naver has appointed a president in his 40s, and Samsung has executives in their 30s. The MZ generation values fairness, prioritizes their own lives, and is sensitive to performance. Securing outstanding talent from this MZ generation affects the survival of both large corporations and startups.

Thirdly, investment funds in the venture and startup sector have increased to an all-time high. As of last month, cumulative investments in ventures and startups have surpassed 10 trillion won. This is the first time annual startup investment has exceeded 10 trillion won. Although the prolonged COVID-19 pandemic led to global financial policy easing and abundant liquidity, as mentioned earlier, the successful listing of Coupang on the U.S. stock market has increased investors' desire to invest in promising Korean startups. It is expected that about 21 trillion won will be raised through the IPO market this year, which is 3.5 times the amount raised through public offerings last year. Both the investment and exit markets are achieving record-breaking results.

It is also important to note that the domestic venture and startup sector is driving positive changes in our society. From the start, they have pursued globalization, expanding into Silicon Valley and gaining recognition. In the past, most of the top 10 richest people in Korea inherited their companies, but now figures such as Kim Beom-su, CEO of Kakao; Seo Jung-jin, CEO of Celltrion; Kim Jung-ju, CEO of Nexon; Kwon Hyuk-bin, CEO of Smilegate; and Bang Si-hyuk, who nurtured BTS, are proudly listed, standing at the center of change. In 2022, disparities between sectors and classes are widening, and there are concerns about low growth around 3% and qualitative deterioration of growth due to Omicron. I hope that all economic agents will foster entrepreneurial spirit, pursue regulatory reform and innovation, and make the new year a time for the Korean economy to leap forward. / Kim Kyung-hwan, Dean of the Graduate School of Global Entrepreneurship, Sungkyunkwan University.