Startups offer a different future for South Korea’s economy

COUPANG, AN E-COMMERCE firm and South Korea’s most valuable startup, occupies the upper 20 floors of a skyscraper in Jamsil, a district in southern Seoul. The lower floors are still used by affiliates of Hyundai, the country’s second-biggest conglomerate, whose engineering arm built and operates the building. Coupang employees joke that it is easy to spot anyone who works for Hyundai in the weekday-morning jostle for the lifts. Most workers in the building are in classic startup attire of jeans and expensive trainers: “The Hyundai guys are the ones in suits.”

The government hopes that companies such as Coupang will eventually change more than just dress codes. Starting with the “creative economy” initiative launched by the Park Geun-hye administration in 2013, it has been pouring money into seed capital, incubators and networking opportunities for budding entrepreneurs. Last year it announced an extra 12trn won ($9.9bn) of venture-capital support by 2022. It is encouraging banks and other large firms to do the same in a bid to diversify the economy away from its reliance on the chaebol. It has also co-opted those conglomerates into the strategy, encouraging them to invest their own money, resulting in big chaebol such as Samsung and Hyundai launching their own startup incubators. The...

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