Q&A
Q 1. Growth in the number of venture capital firms faltered, but is recently gaining traction once again. Optimists even expect that a second round of the venture boom would arrive soon.
A 1.
In 2010, the number of venture capital firms went up 5,000 to 23,000 in 10 years. The number of startup-turned incorporated enterprises has been on the rise, topping 5,000. Such growth seems to have something to do with rises in the number of application developers and one-man businesses following the smartphone craze and growth in major IT parts such as semiconductors, secondary batteries and LED. Judging from that, it feels like a second venture boom is just around the corner.
Q 2. As you know, high jobless rates are one of the most serious social issues. If a person in their 20s and 30s start up their own business, Korea's high unemployment rate can be slashed significantly. What kind of plans do you have
A 2.
At the end of 2010, Korea's average unemployment rate was 3.3 percent, but the unemployment rate for people aged 15-29 was 7.0 percent, double the average unemployment rate. Starting a business means creating value by commercializing new technologies, novel ideas, new information or innovative services in tandem with market demands. Since starting a business entails plenty of risks, they are called venture capital firms. I think it would be nicer for people in their 20s and 30s to start their own businesses, because they are more ambitious. The Small & Medium Business Administration (SMBA) is running the following entrepreneurship-nurturing programs for 20- 30 something people: Young Entrepreneurs Leader (YES) Lecture, BizCool (Business + School), the program to help commercialize ideas, support for forming would-be entrepreneur college clubs, competitive exhibitions of commercialization-worthy ideas, provision of support to prospective engineers wishing for starting a business and funding for building and running business incubators. In addition, SMBA is set to pick the beneficiaries of SMBA programs like support for fledging businesses, support for promising patents and university leaders in promoting start-ups.
Q 3. To promote venture capital firms, collaboration with academia seems crucial. What is your take on this issue
A 3.
The importance of universities' roles in revitalizing the venture boom cannot be emphasized enough. The national competitiveness of Finland is based on Finish universities' education on entrepreneurship. Now is the time for Korean universities to live up to current market demands that higher education should pursue both academic achievements and practicalities.
Since 2000, the number of Korea's Science Citation Index (SCI) papers in universities' evaluations and university professor evaluations for promotion has reached the levels of prestigious universities in the world. The number of start-ups, however, has plunged compared to 10 years ago. Today, students hope to either work for large companies or become a civil servant, rather than starting their own businesses. Now, universities have to strike a balance between academic achievements and practicalities, which mean teaching students how to start a business at school. To that end, we will lend our full support to a subset of universities: 15 universities will be handpicked as university leaders in promoting start-ups.
Q 4. I've heard that there are also government-backed start-up support policies.
A 4.
Just like the previous years, the Institute of Korea Entrepreneurship Development (IKED) will continue to spare no efforts in supporting future start-up owners with excellent technologies and brilliant ideas. Through the prospective engineers' promotion program, people with commercialization-worthy items will be given start-up funds. In addition, there is a program that connects the patent-based start-up support program to leading venture capital companies. Through this program, tie-ups are made between less than one-year-old start-ups and leading venture capital companies to facilitate the transfer of success know-how. On top of that, funds for building, expanding and running business incubators will be provided to raise the longevity of venture capital firms. And to draw more support from universities and specialized colleges in promoting start-ups, we are running "University Leaders in Promoting Start-Ups", "Academy for Technology Start-Ups" and "University Education Packages for Starting a Business". In addition, through the Biz - Cool program, students in elementary, middle and high schools will be given the opportunity to have hands-on economic education and to learn about unbiased occupational views. In particular, to streamline the procedures of starting a business, we are running an online website called Start BIZ (www.startbiz.go.kr), which helps would-be start-up owners save up to US$ 550 in startup costs and guarantees a smooth business process by integrating the work systems of six different institutions.
Q 5 Though the number of start-ups has recently edged up, the idea of starting a business still gets the cold shrug from society compared to the early 2000s. Why do you think the idea of starting a business gets a cold reception
A 5.
The venture boom, which flared briefly in the aftermath of the 1997 Asian financial crisis, fizzled giving rise to the term "dot-com bubble". The global financial crisis further dampened the moves to start a business. Although decisions to start a business can be affected by changes in situations, resource-poor Korea has to create opportunities through setting up tech start-up companies. Germany, for instance, starts providing education on starting a business early. In Germany, when it comes to starting a business, the dichotomy of success versus failure is not applied: starting a business is viewed as part of human life. Thus, Korea needs a paradigm shift in this matter to project the idea of starting a business as an avenue to self-realization. Nearly 10 percent (about 3,000) of MIT graduates start their own businesses. The tendency to avoid the idea of starting a business for fear of being stigmatized as a loser undermines a nation's potential growth. We need to build an atmosphere in which young people have the guts to take risks and start their own business and to encourage people to venture into uncharted territory. By doing so, we can power up our nation's growth engine.
Q 6. You said entrepreneurship is a must in starting a business. As of now, what is IKED doing to nurture entrepreneurship And what kinds of tangible results are you making through those programs
A 6 .
To nurture entrepreneurship, IKED has been holding an array of events to build an education system, which is designed to offer sector-specific and life-long education on how to start a business, and to help the idea of starting a business take root. Specifically speaking, we are conducting the following entrepreneurship-nurturing programs: the Youth Biz-Cool; supporting college clubs for starting a business; business lectures on how to start a business; technology startup packages; and professional lectures on how to start a business. And to change overall perceptions on starting a business, we have been holding the Entrepreneur Festival Korea and competitive exhibitions of commercialization-worthy ideas every year. IKED has taken the lead in implementing various measures for promoting startups and nurturing entrepreneurship, thereby contributing to the expansion of Korea's start-up base. There is also an education program designed specifically for the youth. The number of students and schools participating in the Youth Biz-Cool, which has been in place since 2002, has continued to grow. Besides, business lectures on how to start a business, which have been continuously provided to college students, have become a major subject at universities. Furthermore, connecting tech startup packages to education on how to start a business helps general people get financial assistance and technology evaluations, which will raise the success rate of start-ups in the end. In addition, the Entrepreneur Festival Korea and competitive exhibitions of commercialization-worthy ideas have been held annually to draw much-needed attention from Korean society.
Q 7. Generally, the unemployed and retirees try to start their own businesses. However, the success rate is said to be very low. Could you tell us about some of the things that would-be start-up owners should know
A 7.
At a time of fast-changing business environments, a plethora of start-ups are springing up and closing down their businesses at the same time. After the world went through the 1997 Asian financial crisis and the global financial crisis, numerous nations including Korea ended up with high unemployment rates, wrestling with the challenging task of creating jobs. Against this backdrop, starting a small business is one way of creating jobs, thus leads to an unstoppable global trend. Moreover, with the continuing emergence of different types of businesses, the forms of starting a small business are getting diversified. Though different motives drive people to start a business, their adamant determination and business goals for success are the same. To make a business successful, thorough preparations and execution plans are required right from the stage of planning for a new business to the stage of planning on management. For example, prospective start-up owners have to take the following into account: procedures to start a business, preparatory efforts, getting a business license, building a managerial system, financial management, production, technology management, management of intellectual property rights, marketing strategies and getting help from start-up support policies. Lastly but not least, would-be start-up owners have to obtain information on diverse start-up support policies by visiting websites, such as the website of the IKED, that are dedicated to those who hope to start their own businesses.
Q 8. Lastly, could you tell us why starting a business is important
A 8.
The Silicon Valley in the US was not built overnight. The venture capital-saturated and Silicon Valley is where the wealth of the US is being created. Imagine that there is a venture capital Mecca like the Silicon Valley in Korea. I reckon that the creation of small, but strong companies that can offer a helping hand to global companies like Samsung, Hyundai and LG cannot take place without encouraging people to start their own businesses with brilliant ideas and advanced technologies. Job creation stemming from creating start-ups will have a huge impact on the national economy. For instance, the number of start-ups is estimated at 60,000 while that of listed start-ups are estimated at 50,000. The job creation and sales made by 50,000 listed venture capital businesses are making a sizable contribution to the Korean economy.
Comment
I would like to talk about Apple's CEO, Steve Jobs, who is apparently a role model for young people around the world. The self-made entrepreneur went through a rough childhood. He is far from being an upstart crow. His single mother put him up for adoption and he was adopted shortly thereafter by a California couple. A young Steve Jobs, who was mischievous and easily distracted, grew up at the heart of Silicon Valley, naturally tampering with computers. He stole frequencies from communication operators and made free-of-charge phones and sold them. A young Steve Jobs showed the mind of an entrepreneur at an early age. He was a fighter with a strong business sense rather than a computer geek. In other words, he was already an entrepreneur. The first computer business he started in his family's garage, when he was 20 took off. Though the first computer (the original Apple-1) he made was simply assembled computers, it sold like hot cakes thanks to its high performance. Apple grew bigger and bigger and Steve Jobs became a millionaire at the age of 25 after Apple's initial public offering. Yet he was self-righteous and unruly. His attempts to make the perfect computer took a heavy toll on Apple. As he relentlessly pursued perfection, the price of his new computer hit the ceiling. He bragged that tens of thousands of his new computers would be sold, but the outcome was the opposite of what he said. Production of his new computers was terminated due to disappointing sales. He was neither the best presentation maker nor an innovative entrepreneur. Blamed for bringing massive financial losses to his company, Steve Jobs was dismissed from Apple's board of directors. Ironically, he was kicked out of the very company he founded. Besides, a baby girl named Lisa was born to Chris-Ann Brennan, Job's on-again-off-again girlfriend since high school. But a young Steve Jobs refused to recognize her as his biological daughter. He was a wimpy and soft-mined young man. During Steve Jobs days in wildness following his ouster from Apple, however, he refused to give up and he created another company. Adamantly determined to build the best computer company in the world, he founded his second company and received a lot of attention. But many years passed without his company making any profits. He was just digging deeper into his savings. The, he stumbled upon a small company called Pixar that was at the time owned by George Lucas. Steve Jobs bought the company and invested heavily to create the first fully animated movie studio combining animation and technology. Pixar produced hugely successful movies like Toy Story in collaboration with Disney. Later, he was reinstated by Apple to resuscitate ailing Apple. As he returned to his first company, he started to work passionately, declaring his one-dollar salary. This time, he led Apple with charisma and unifying attitude, but he was diagnosed with pancreatic cancer. Fighting an uphill battle against pancreatic cancer, he has released a series of Apple's mega hits such as the iPod, iTunes, the Apple App Store and the iPad. Steve Jobs encourages people to find what they really want to do. He says people should do something that they can engage in with passion. And when people fail to find one, he urges them to try again until they find one. He stresses that people should work for passion not for money. Since he has led such an eventful life, characterized by huge successes, failures and a life-threatening disease, we need to perk up our ears to what Steve Jobs tries to say.
