The Status of Start-up Policy and Tasks

As start-ups play an important role in revitalizing the economy and creating jobs, many countries are concentrating their policy efforts on stimulating entrepreneurship. In 1986, the Small and Medium Enterprise Establishment Support Act was enacted in Korea. After the foreign exchange crisis, policymakers reached a consensus that small and venture businesses could serve as a new growth engine of the Korean economy, and have gradually expanded start-up support programs since then. In 2017, eight central government ministries, including the Ministry of SMEs and Start-ups, along with 17 local governments, were found to have carried out 180 startup support projects. The Moon Jae-in government announced its five-year plan of state administration operation in July 2017, and proposed start-up and innovation growth led by small and medium-sized venture businesses as a core strategy for national administration. In addition, in its New Government Economic Policy Direction, the Korean government emphasized innovation growth along with income-driven growth, a job-centered economy and fair growth, and announced its Plan for Creating Innovative Entrepreneurship Ecosystem last November as part of a broader strategy for promoting innovation growth. Here, the key driving force behind innovation growth is the revitalization of innovative start-ups and innovative start-up-focused job-related measures, which are led by venture firms and start-ups. In the meantime, central and local governments have been concentrating their policy efforts in promoting start-ups. As a result, since the mid2000s, there has been a notable uptick in start-up activity. The number of start-ups has been steadily increased, from 50,855 in 2008 to 74,162 in 2012, up to 98,330 by 2017 and 102,042 in 2018. This paper examines the economic functions and roles of start-up, examines the status and problems of start-up support projects conducted by the central and local governments in 2017, and proposes ways in which effective start-up policies might contribute to job creation and economic growth.