Korea's startup ecosystem lags behind peers in global investments

South Korea’s startup environment lags behind major countries in terms of global expansion and foreign investment attraction, a report from startup accelerators found.

The combined number of Korean startups that expanded overseas and ventures launched abroad by Korean entrepreneurs totaled around 300 as of 2022, according to a report from the Seoul-based Asan Nanum Foundation, D. Camp and Startup Alliance.

That figure amounts to just 7% of all startups in Korea, compared with 90% of 2,200 startups in Singapore and 80% of 2,000 startups in Israel, the report added.

Foreign capital accounted for 7% of the $37 billion in investment in Korean startups between 2020 and 2022. That figure was 32% for the $14 billion in investments in Singaporean startups and 25% for the $46 billion in British startups over the same period.

Seoul ranked 12th among global startup ecosystems this year, said the report, citing analysis by California-based research firm Startup Genome.

Silicon Valley, California, topped the rankings, followed by London, New York, Los Angeles, Tel Aviv and Boston. The rankings measure success factors for startups like performance, funding, market reach, talent, connectedness and knowledge.

Korea’s startup-related policies have focused on the growth of local ventures at home rather than expansion to global markets, the report said.

To boost its startup ecosystem, Korea needs to ease regulations on foreign investment given that current policies require long and complicated procedures to obtain business licenses and work visas in the country, the report added.

Write to Joo-Wan Kim at kjwan@hankyung.com
Jihyun Kim edited this article.