New Trend in Content Industry ESG Management: 'Impact Investment'... Rise of Social Ventures

Innovative Ideas + Public Interest Creation, Solving Social Issues and Providing Various Benefits
Collaboration with SMEs and Startups... Only 1.9% in Culture and Content Sector
KOCCA Social Venture Support Gains Momentum... Challenges by Rajen, Emotive, and Others Accelerate

The children's ADHD diagnosis and treatment game 'StarLocus' offers a customized gaming experience based on the user's cognitive data.

ESG (Environmental, Social, and Governance), which companies set as their management goals, reflects the changes of the times. It implies that companies should engage in valuable investment activities not only for financial goals but also for the development of the environment, society, and governance. It is not easy to immediately change governance or alter ongoing projects. Employees also find it difficult to manage both performance and ESG. Therefore, an emerging alternative is 'impact investment.' This is investment aimed at positive social and environmental impact. Collaborating mainly with SMEs and startups equipped with ESG is gaining traction. The scope is expanding from environmental to social fields.

Attention is focused on so-called social ventures that prioritize related issues. These are companies that combine innovative ideas with social public interest to solve social problems and provide various benefits. Innovative technology is important, but the core lies in creating social public interest and supporting it with fresh ideas.

There are about 1,500 social ventures operating domestically. They rapidly test products and services to find business models. They also propose innovative ESG solutions to large corporations, increasing opportunities for investment and collaboration. However, there is still a strong concentration in specific industries. According to the 2020 Social Venture Survey Report, 45% are concentrated in manufacturing. Information and communication industries account for 21.4%, technical services 8.2%, business management and rental services 6.1%, and educational services 4.5%. Cultural and content industries, which seem to have great potential for integration, account for only 1.9%. Due to few success cases and lack of policy investment, it is practically in its infancy.

Daejeon City utilizes Rajen's sign language conversion system in the smart screening clinic system for the hearing impaired.

The Korea Creative Content Agency (KOCCA) made its first impact investment last year. It added a 'Content Social Venture' category to the existing 'Early Content Startup Incubation Program (Startup Development Center)' and operated it on a pilot basis. The goal was to discover appropriate business models and promote social value in the content field. A KOCCA official explained, "Seven companies were selected after overcoming a competition rate exceeding 20 to 1," adding, "They were mainly related to barrier-free, regional coexistence, and improvement of creative environments." He added, "Rather than simple investment, we aimed to create an ecosystem where content startups are guided to utilize private impact investments or ESG funds to realize social value."

A representative success case is Rajen. It is a sign language content production company for hearing-impaired infants and toddlers. It started as an artificial intelligence (AI) and blockchain solution company but changed its business direction at the suggestion of employees. The core is software development based on an AI solution base. It recognizes human movements as sign language and converts them into text or voice. It helps hearing-impaired people who have difficulty with voice orders in places like supermarkets, coffee shops, banks, convenience stores, and public services. Optimized for non-face-to-face orders, it is already used at screening clinics in Daejeon. Recently, it also succeeded in entering Barcelona, Spain.

CEO Youngsun Park explained, "If only the language is converted, it can be exported to any country," adding, "By adding existing blockchain technology, the security performance is also high." He said, "Although the market size is small, I feel proud that social value is steadily generated."

Lazen produces various educational content to help hearing-impaired infants and toddlers learn sign language in an enjoyable way.

Rajen places emphasis on a different business. It is an engine that analyzes sign language in real time and converts it into a 3D avatar. The related technology has already been secured. They plan to provide sign language not only for movie and drama dialogues but also for fingerprint subtitles on online video services (OTT). CEO Park said, "The first language hearing-impaired people learn when they are born is not Korean but sign language," adding, "I want to help them consume cultural content in a familiar language." He also added, "We plan to accelerate the development of other products that accurately provide various information to hearing-impaired people."

Emotive, which develops the ADHD (Attention Deficit Hyperactivity Disorder) diagnosis and treatment game 'StarLocus,' is also worth noting. By appropriately combining games and tasks, it implements a real-time cognitive model that provides the user's cognitive state while inducing treatment. CEO Jeongsang Min worked as a cognitive modeling researcher at Hyundai Motor Company for 10 years. Realizing the seriousness of ADHD, he turned his attention to cognitive development programs. He explained, "Children with ADHD face psychological barriers to psychiatry, and it usually takes two years to visit a hospital," adding, "'StarLocus' is a digital therapeutic based on cognitive modeling and mobile games, so it has excellent accessibility. Unlike other treatments, it can also evaluate, strengthen, and monitor cognitive abilities."

'StarLukes' is expected to be used for prescription purposes in hospitals if it passes clinical trials in the second half of the year.

'StarLocus,' launching this April, will not include diagnostic and treatment functions. This is because it requires certification from the Ministry of Food and Drug Safety through clinical trials as well as Good Manufacturing Practice (GMP) quality management audits for medical devices by the Korea Testing & Research Institute. Emotive is continuously consulting with Seoul National University Hospital and preparing for approval from the U.S. Food and Drug Administration (FDA). CEO Min said, "The full-scale commercialization point is the first half of next year," adding, "We plan to expand the business scope beyond ADHD to autism, dementia, and depression." He also said, "Due to the long research and development period characteristic of this business, impact investment from KOCCA and others is desperately needed."

KOCCA officially launched the content social venture support program this year. It will select ten companies, more than last year. A representative from the corporate development team said, "We plan to announce more advanced acceleration support details by mid-next month." KOCCA President Hyunrae Cho stated, "ESG management that cooperates with environment, society, and exchange is an essential value for the sustainability of society and organizations," adding, "We will strengthen content support that contributes to creating social value and stir an ESG wave in the related industry."