"Korean Startups Need to Jointly Promote PoC for Global Collaboration"

Korea International Trade Association Conducts 'Pocheon Global Top 500 Companies Open Innovation Trend Survey'

[Asia Economy Reporter Kim Pyeonghwa] Despite the relatively high technological competitiveness of domestic startups, evaluations indicate a lack of preparation for global expansion. Advice has also been given that to increase cooperation with the Fortune Global 500 companies, they should promote joint Proof of Concept (PoC) projects.

Korean Startups Lag in Overseas Expansion Compared to Their Technological Capabilities

The Korea International Trade Association (KITA) announced on the 19th the results of a survey on open innovation trends targeting multinational corporations among the Fortune Global 500 companies interested in the Korean startup global ecosystem. This survey was conducted over a month from January 9 to February 8, targeting 102 multinational corporations belonging to the Fortune Global 500.

According to the survey results, global companies rated the technological competitiveness of Korean startups relatively high at 7.4 points (based on a 10-point scale used in Silicon Valley). However, they rated the readiness for global expansion (6.1 points) and business model differentiation (6.4 points) as low. KITA explained, "55% of respondents cited innovative technological competitiveness as the strength of Korean startups," adding, "It is understood that our companies with excellent technology are insufficiently prepared for overseas expansion compared to their technological capabilities."

Nine out of ten global corporations (91%) responded that despite the economic slowdown, they plan to maintain or expand open innovation activities with startups in the future. Additionally, one in three companies (35%) stated plans to significantly expand cooperation with startups. Open innovation refers to open technological innovation that brings in ideas and technologies both internally and externally to create corporate innovation and value.

When discovering startups to collaborate with, Fortune 500 companies most frequently decide based on third-party recommendations such as venture capital (VC), accelerators, and startup support organizations (37%). Responses indicating discovery through participation in exhibitions, demo days, and networking events accounted for 22%.

"Find Cooperation Opportunities with Global Corporations through Joint PoC"

Global corporations reported conducting approximately 10 to 25 PoCs annually with startups. During the PoC process, they consider alignment with corporate strategy and synergy effects as the most important factors. The main types of PoC initiatives include ▲pilot use and feedback provision (24%) ▲customization requests such as adding or changing functions (17%) ▲providing test resources such as internal corporate data (16%) ▲benchmark testing against similar products (14%), among others.

They reported difficulties during PoC implementation, including excessive administrative preparations such as guarantees, insurance, and agreements (32%) and communication challenges related to language and culture (20%). 57% of respondent companies stated that to increase PoC cooperation with global corporations, Korean startups need to focus on expanding local market research, enhancing brand image through media exposure, and strengthening global expansion capabilities by participating in exhibitions.

KITA suggested joint PoC and collaboration through startup studios as ways for domestic startups to increase cooperation with global corporations. Joint PoC is a method where startups possessing specific core technologies collaborate with partners (such as small and medium enterprise vendors or startups from other industries) that have complementary technologies to jointly conduct research and development (R&D). A startup studio is a model that creates new startups by providing various resources after identifying business opportunities, enabling entry into business.

In fact, 84% of respondent companies proposed expanding joint PoC as a new collaboration model between large corporations and startups. Additionally, 69% of respondents anticipated that startup studios would become a method for future corporate innovation strategies.

Jung Manki, Vice Chairman of KITA, said, “Through this survey, we confirmed that global corporations have high interest and willingness to collaborate with Korean startups regardless of economic fluctuations,” adding, “We will strive to expand local PoC and cooperation opportunities in various ways so that our startups can broaden business opportunities with overseas corporations.”