Minister Lee Young of the Ministry of SMEs and Startups revealed a new policy called ‘Fostering Plans for Entrepreneurial Small Business Owners,’ aimed at enhancing the value of living areas, including clothing, food, and housing at Yeonnam Market in Seoul on May 16. This policy marks a departure from previous approaches, as it focuses on incubating small businesses rather than solely protecting or supporting them.
The central theme of this policy is to nurture creative talent, discover innovative ideas, and facilitate the growth and expansion of business models. By establishing a robust support system, the ministry aims to guide small businesses through various stages of development, leading to scalable enterprises. To this end, small business owners with an entrepreneurial spirit will be referred to as “Licorns” in the future. The term has been derived from “unicorn” and “lifestyle and local innovation.” A recent survey revealed that “LICORNs” are the top preferences among strong small business owners and local creators.
One of the key measures outlined in the policy is the compulsory completion of entrepreneurship education as a minor for university students majoring in the living industry. Furthermore, the ministry plans to establish a content-based artisan school in collaboration with local companies. These initiatives aim to systematically support the growing number of college student startups and small business owners within the MZ (Millennial and Generation Z) demographic. Additionally, a dedicated space called the “Small Enterprise Innovation Hub” will be created to facilitate the transformation of existing small businesses into entrepreneurial ventures.
In terms of financial support, the policy encourages the development and expansion of business models by connecting private finance. The introduction of a “private pre-investment-linked matching loan” enables policy funds of up to 500 million won ($374k) to be provided when the private sector invests 100 million won ($74k). This approach seeks to stimulate an innovative startup boom in the small business sector by attracting private funds through various investment systems such as investment funds, business rights investments, and equity conversion contracts. The ministry plans to scale up the support system to 40 billion won ($29 million) in 2023 and 100 billion won ($74 million) from 2024, fostering a network centered on small business owners.
Furthermore, the policy emphasizes promoting commercial startups with a focus on local creators. By nurturing small businesses into local brands that incorporate the region’s identity, including its history and culture, the ministry aims to develop content commercial areas and cities that appeal to people worldwide. Departing from previous government-led initiatives, the policy introduces a commercial planner system to empower private innovators and support the creation of entrepreneurial small business-centered communities and networks.
Minister Lee Young said, “In the beginning, we plan to operate a one-stop startup program through pitching contests and programs nationwide, and in the long term, we plan to strategically support through business model advancement and collaboration with private investors. am. We will help grow the existing format of simply selling products into a lifestyle sales format like Starbucks and Nike in developed countries.”
When questioned about the recovery model following investments, Minister Lee Young revealed intentions to differentiate it from existing technology-based startups by incorporating crowdfunding and commercial investment associations. He underscored the objective of attracting private funds and building an environment conducive to supporting local small business investments.
During the policy announcement, several successful entrepreneurial small businesses shared their inspiring stories. Among them were Boksoondo, a local startup specializing in makgeolli production, a fish cake business in Busan, Dore Dore famous for their rainbow cakes, Jeju-based content company Go Seon-yeong, along with Urban Play, a startup supporting the commercialization of lifestyle products and services, shared their success stories as exemplary entrepreneurial small businesses.
- Korean Ministry selects venture fund managers worth $245 million to support startups & entrepreneurship
- Korean ventures & startups lead employment growth, especially for young people & women: Ministry Report
- Korean Ministry of SMEs and Startups strengthens ties with Middle-East region; Promotes startups at ‘Biban 2023’ event in Saudi Arabia
- Korean Ministry launches women’s venture fostering project to support female entrepreneurs