Industry Seeks to Reflect Venture Policies in Presidential Pledges
Recovery of Investment and Regulatory Reform Are Key... Policy Proposals Continue
Active Communication with Lawmakers to Convey Industry Challenges
With the June 3 early presidential election approaching, the venture industry has become busy. This is due to the acceleration of efforts to include policies for revitalizing ventures and startups in the pledges of major political parties and candidates, aiming to revive the ecosystem that has shrunk sharply due to worsening domestic and international conditions. With less than two months remaining until the election, the pace is becoming even more urgent.
According to the industry on the 9th, major venture-related associations and organizations such as the Korea Venture Business Association and Korea Startup Forum (Kospo) are organizing policy agendas in line with the early election schedule and preparing concrete policy proposals to deliver to candidate camps. An industry official said, "Even before the early election was confirmed, inquiries about venture-related policies from the National Assembly and political parties have increased significantly, creating an atmosphere to use this opportunity as a turning point for the venture ecosystem."
The reason the venture industry is focusing on this election is clear. During the government’s administrative vacuum, venture policies were sidelined, and the policies proposed early in the Yoon Seok-yeol administration were either not implemented as expected or became ineffective.
Former President Yoon pledged during his candidacy to expand the size of the Korea Fund of Funds, establish the corporate venture capital (CVC) system, and introduce multiple voting rights, but only some of these policies were actually implemented. While there were some achievements such as the expansion of the Korea Fund of Funds, the overall view in the industry is that there was a lack of substantial effects to revive the shrinking investment market. On the contrary, some policies, such as strengthening regulations on online platforms, were criticized for going against the innovation trend of startups.
The venture industry’s most urgent demands are mainly twofold. One is the recovery of the venture investment market, and the other is the removal of regulations that hinder startup growth. The venture investment market, which was booming due to liquidity expansion during the COVID-19 period, has rapidly contracted due to economic recession and prolonged high interest rates. Additionally, concerns are rising that domestic startups are falling behind in global competition due to the complex regulatory environment in Korea.
Accordingly, major associations and organizations plan to set their own policy agendas and propose them to the presidential election camps. Kospo is preparing key policies such as support for youth startup funding, tax deferrals related to startups, and the transfer and relaxation of regulatory innovation authority. Startup Alliance is focusing on expanding private investment inflows, resolving regulations related to new industries such as the AI (artificial intelligence) Basic Act, and improving the environment to secure global competitiveness by removing digital trade barriers.
Policy proposal activities are also actively ongoing. Recently, eight associations including the Korea Venture Business Association held a meeting with National Assembly officials such as Kwon Seong-dong, floor leader of the People Power Party, to convey major difficulties such as strengthening liquidity in innovative industry finance, flexible working hours, and abolishing industrial regulations. Kospo also held a meeting with members of the Democratic Party of Korea to suggest policy drafts on creating a fair competition environment and regulatory innovation measures.
An industry official said, "It is true that venture-related policies have been sidelined in priority compared to other major policies so far," adding, "This time, we will actively work to ensure that venture and startup policies are definitely included in the core pledges of each camp."
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