[Yeouido Interview] 'Startup Guardian' Kang Hoon-sik... "We Must Prevent a Second 'Tada'"

Serving as Head of National Assembly Research Group 'Unicorn Farm'
Incorporating Startup Voices Through Legislative Processes
"Startups Must Drive Innovation to Transform Our Society"

"If the National Assembly had mediated in advance, neither the taxi industry nor Tada would have been fully satisfied, but at least it would have prevented situations where someone dies or a company collapses. That thought led to the start of Unicorn Farm."

Kang Hoon-sik, a member of the Democratic Party of Korea, recently shared in an interview with Asia Economy the process of creating the National Assembly research group 'Unicorn Farm' to support the growth of startups and venture companies, and recounted his experience with the legislation of the 'Tada Ban Law.' Kang served as a member of the Land, Infrastructure and Transport Committee when the Tada Ban Law was processed in the 20th National Assembly. He said, "At the time, on one hand, I thought startups should be protected, but on the other hand, I had to witness taxi drivers losing their lives," adding, "I reluctantly stamped the bill due to reality, but I resolved that if re-elected, I would work to prevent such incidents."

Tada, a subsidiary of the car-sharing startup Socar, launched in 2018 and grew into one of the largest mobility services in Korea, but faced backlash from the taxi industry and became embroiled in controversy. As taxi drivers, feeling threatened by Tada's popularity, repeatedly took their own lives, the National Assembly passed the amendment to the Passenger Transport Service Act (known as the 'Tada Ban Law') in the plenary session in March 2020. After the law passed, Socar judged that it could no longer operate and sold Tada's operating company to Toss.

Unicorn companies, defined as unlisted companies valued at over $1 billion, are a kind of dream goal in the venture and startup world. The hurdles startups must overcome are many, including regulations, restrictions, and resistance from existing industries, so much so that the mythical unicorn is invoked.

Unicorn Farm, initiated by Kang, started as a Democratic Party lawmakers' group in December 2020, but with participation from ruling party lawmakers such as Kim Sung-won of the People Power Party, it became an official National Assembly research group in November 2022. Unicorn Farm actively engages in legislative activities by proposing bills necessary for startups related to medical care, law, taxation, and nursing services.

Interview_Kang Hoon-sik, Democratic Party member. Photo by Hyunmin Kim kimhyun81@

The following is a Q&A with Representative Kang.

-What is the purpose of establishing Unicorn Farm and how does it operate?

=It started with the idea of revitalizing new growth engines and transforming society by shifting from a producer-centered era to a consumer-centered era, discovering innovative energy. Lawmakers listen to the difficulties faced by startup companies. Relevant standing committee members also attend these sessions, and they discuss what measures are needed to resolve these difficulties. If legislation is necessary, they jointly propose bills and explore ways to pass them. Sometimes they issue statements, but the focus is primarily on legislation.

-What achievements have been made so far? None of the Unicorn Farm bills have been passed in the plenary session yet; is it effective?

=About six bills have been proposed under Unicorn Farm, aimed at strengthening mediation functions related to medical care, taxation, law, and nursing services. It is important to note that issues are being raised during the bill passage process. For example, regarding the Medical Service Act related to telemedicine, associations like the Medical Association and Pharmacists Association oppose it. However, there was no bill representing startups in the discussions before, but now startups are at the discussion table. That process alone brings hope.

-Why does the National Assembly pay attention to startup issues?

=Eight years ago, when I visited IBM, I saw a program called Watson that could input symptoms and estimate the probability of having the flu. Recently, ChatGPT 4.0 can prescribe medicine and connect you to a pharmacy for delivery with a click. Meanwhile, we are still blocking telemedicine and platform advertising, but outside, results that transcend the times are emerging. The Pharmacists Association and Medical Association may oppose AI consultations for treatment, but how long can that last? The same applies to law. In the U.S., AI already analyzes case law. It won't take long for such a system to analyze Korean precedents. Yet, we prohibit price comparisons in cases like 'Rotok' (an online legal platform). We are falling far behind.

-Isn't the existing industry afraid of losing market share?

=When we search for restaurants, we look for delicious places, not necessarily the cheapest. There is a startup called 'SamzzumSam' that provides tax refund services. Self-employed people who have used this service expect bigger services and seek tax accountants. Even if you get a prescription from ChatGPT, you will eventually go to a pharmacist to ask and confirm the prescription. Is it healthy to try to block trends like ChatGPT? New growth industries should be recognized as expanding the market for existing industries.

-Any advice for startups?

=Startups often fight with associations, but associations are essentially producers' unions. Then startups should become organizations of consumers. The negotiation space will be where consumers' complaints and demands meet producers' demands. It is important to keep creating solutions to resolve consumers' complaints and to turn that into voices calling for institutional changes. Also, startups should not think only in terms of fighting regulations. Looking at other cases, instead of thinking something is impossible due to regulations, they should consider how to overcome them. Many problems can be solved that way.

-What lessons can be learned from the Tada controversy?

=In the case of taxis and Tada, they fought at opposite extremes. Afterwards, both taxis and Tada lost strength. Ultimately, the biggest victims were consumers. Preventing such fights is most important, and opening spaces for discussion in the National Assembly and elsewhere is crucial. If the National Assembly can institutionally block issues and produce one or two outcomes, things will change significantly.

-Hypothetically, if you could revisit the Tada discussions, what would you do?

=If I could go back, I would bring Tada and the government together much earlier to find a solution. They should have met at the point where the dispute began. For example, if the government had bought taxi licenses and Tada had taken on some burden, the taxi industry might not have opposed so strongly. Tada could also have explored ways to connect with taxis and others.

-There are concerns about deregulation, such as privacy risks if personal information regulations are weakened.

=This is a delicate issue. I went to CES, the world's largest electronics and IT exhibition, and met Koreans showcasing various ideas. But they said they don't do business in Korea because there are too many regulations. While concerns about personal information leaks are understandable, we need to look more closely at how much the world has changed.

-What is the role of the National Assembly in fostering startups?

=When companies face difficulties and visit the government, they meet department heads or team leaders. But discussions in the National Assembly can create a space to talk with higher authorities. Isn't the National Assembly a place to create dialogue and compromise?

"Preparing for Jamberry Disruption Audit"

Representative Kang is one of the busiest figures in the 21st National Assembly. Along with being the head of Unicorn Farm, he serves as the opposition party whip on the National Assembly Budget and Accounts Committee and as the leader of 'The Better Future,' the largest Democratic Party lawmakers' group, holding three key positions.

As the opposition whip on the Budget and Accounts Committee, he is gearing up for the imminent audit. Kang said, "Before the ruling and opposition parties clashed over the responsibility for the mismanagement of the World Scout Jamboree, I had already said that this audit must be thorough," adding, "Since this is the first audit of the Yoon Seok-yeol administration, it is naturally our opposition party's important role to scrutinize where and how the money was spent."

Interview_Kang Hoon-sik, Democratic Party member. Photo by Kim Hyun-min kimhyun81@

Democracy is ultimately realized by how taxes are collected and spent, so from the opposition's perspective, he is determined to scrutinize sharply. Kang especially pointed out the 'tax revenue shortfall' situation, where tax collection this year is far below last year's budget, saying, "The National Assembly must exercise control over how to handle the tax revenue shortfall," and emphasized, "Alternatives to the tax shortfall issue must be discussed."

He also expressed the need for a supplementary budget. He diagnosed, "The biggest decrease in tax revenue in the first half of the year is due to worsening export performance, a sharp drop in corporate operating profits, and a decrease in income tax," concluding, "Ultimately, it is a recession." Kang said, "We need to create a structure that generates money through a supplementary budget so that people spend and the economy circulates," and "I judge that a supplementary budget is necessary."

He voiced skepticism about Kim Eun-kyung's innovation plan, which effectively abolishes the delegate system. He said, "Ask your family if they are interested in the innovation plan. No one will be," adding, "I neither opposed nor supported the so-called innovation plan, but what is needed now is to discuss some things now and others later."

At the same time, Kang emphasized the role of leadership. He said, "The leadership should guide by distinguishing what needs to be done immediately and what can be done later," adding, "The future representative system and shadow cabinet proposed by the Innovation Committee are good systems, so they should be considered and discussed. Discussing only the delegate system without these is wasteful," expressing regret.