Government, Economic Ministers' Meeting
Announces 'Measures to Strengthen Competitiveness of Regional Growth Support Services'
Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is speaking about regulatory innovation in the new industry sector at the Emergency Economic Ministers' Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 13th. Photo by Jo Yong-jun jun21@
The government will support the formation of funds by local venture capital (VC) and accelerator (AC) firms to create a startup ecosystem where companies founded in the region can grow locally.
On the 13th, the Ministry of Economy and Finance announced the "Plan to Strengthen the Competitiveness of Regional Growth Support Services" at the Economic Ministers' Meeting.
First, the government will support the formation of funds by local VC and AC firms specializing in investment and incubation. When local governments invest 20% or more in private investment associations, the allowable investment ratio for corporations including local governments will be expanded from 30% to 49%.
Outstanding local investment and incubation firms will receive preferential evaluation guarantees when applying for special venture fund guarantees from the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation. To enable incubation firms to recover investments and reinvest in early-stage startups, the scale of local AC secondary fund investments will be gradually increased from 10 billion KRW this year.
To support local investment and incubation firms in building performance and experience, the plan includes expanding evaluation bonus points for local investment and incubation firms when selecting entrusted operators for the Korea Fund of Funds. Additionally, when local governments establish funds to solve community issues, they will prioritize entrusting local investment and incubation firms for fund management, and a new evaluation indicator related to "activation of the regional startup ecosystem" will be introduced in the joint evaluation of local governments.
Furthermore, to expand the supply of regional growth support services, startups wishing to engage in both investment and incubation businesses will be provided with professional training and opportunities for simulated investment and incubation services.
To encourage professional personnel such as investment reviewers to settle in local areas, the government will actively support the construction of private mixed-use facilities (combining office, startup facilities, and housing) through urban regeneration seed loans. To better understand the current status of growth support service industries, which is difficult to grasp under the current Korea Standard Industrial Classification, the development of a special classification for growth support service industries will be pursued.
Alongside strengthening the competitiveness of regional growth support services, opportunities for funding regional venture and startup companies will also be expanded. The scale of the Korea Fund of Funds’ regional account, which acts as a catalyst for the regional venture investment ecosystem, will be gradually increased from 100 billion KRW this year to supply over 1 trillion KRW in new regional dedicated venture funds cumulatively by 2026.
Large-scale regular "Pitching Days" by region will be held through collaboration among startup support institutions such as the Youth Startup Academy. When selecting entrusted operators for regional early-stage startup funds, bonus points will be introduced for cooperation with local financial institutions within the focused investment area to promote support for venture and startup companies by regional financial institutions.
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