The government is focusing on the creative economy based on business ventures and start-ups to overcome many social and economic issues including sluggish economic growth, a lack of jobs for youth, a low fertility rate, an aging population, and a lack of new growth engines. As part of such efforts, the government announced forward-looking policies to support business ventures and start-ups including the “Implementation Plan for the Creative Economy” and the “Plan for a virtuous cycle in the financial ecosystem of business ventures and start-ups," etc. The government's budget to support business ventures and start-ups is around 2.1661 trillion won as of 2014 and 1.9115 trillion won based on the budget plan for 2015, based on six departments and 32 detailed programs. The venture/start-up ecosystem of Korea has grown substantially through the establishment of the Fund of Funds by the government, and the environment to start a business is assessed to have improved significantly, now ranked 17th globally. However, there is still a lack of angel investing for start-ups and the intermediate recovery market for venture companies is not mature.

Against this backdrop, this report evaluated whether the government's policies to support business ventures and start-ups was pursued efficiently and evaluated the performance of each fiscal program by area. Through the evaluation, this report explored the effective combination of policies for the reinvigoration of business ventures and start-ups and ways to improve the support system for the continuous growth of start-ups.

The evaluation result is as follows. First of all, an integrative policy execution system is needed for efficient linkages, as policies to support idea development for business ventures and start-ups and R&D and the start of business and commercialization were operated separately by different departments based on individual laws. Second, it was found that while stages from idea development to R&D, the starting of the business, and financial support were closely linked in technology start-ups, the government's fiscal programs for technology start-ups were separate before and after R&D, undermining investment efficiency. In particular, the R&D project budget was compiled (distribution/coordination) by the Ministry of Science, ICT and Future Planning, and other financial support and infrastructure programs for start-ups were overseen by the Ministry of Strategy and Finance. Third, it was necessary to fully consider plans to manage programs at an appropriate level through the coordination of the scale of financial support for supporting start-ups, reflecting the economic situation, and moreover, it was necessary to enhance the efficiency of fiscal spending by improving the credibility of the performance evaluation of the programs. Fourth, it was found that plans should be considered to reinvigorate the venture investment market through more investment in venture companies in their early stages including through the expansion of angel investment through investment in the Fund of Funds and expanded participation of private investors including general corporations and foreign investors. Fifth, the performance analysis result of R&D projects supporting SMEs showed that while records of patents, commercialization, and employment by early start-ups that were less than 5 years old were excellent, 87% of fiscal support was concentrated on companies that were 5 years old or older, implying that there should be a shift in R&D investment strategies. Therefore, it is necessary to expand support for early start-ups and improve institutions to lower the entry barriers to them. Lastly, most of the Technology Licensing Offices (TLOs) of public research institutions were micro in scale and lacked dedicated resources, leading to weak functions to support technology start-ups and commercialization through the transfer of public technologies. Therefore, it is necessary to reinforce the independent foundation and enhance capabilities to provide support across technology transfer/commercialization and the starting of technology businesses through restructuring the TLO organization. As for organizations dedicated to technology transfer/commercialization of micro public research institutions, it is necessary to establish an independent foundation through the unification of the support system and to make them independent corporations to reinforce their support functions for the starting of technology businesses and commercialization.   

Amid efforts for finding a new growth engine through start-ups and venture companies as the export economy led by large corporations shows a low growth trend, I hope this report will contribute to the government's establishment of an ecosystem for the creative economy.