South Korea to Add 200 Billion Won to ‘Startup for All,’ Name 10 Startup Cities

  The government said it will expand a nationwide, public-participation startup initiative and build technology- and region-based startup ecosystems, aiming to ease a growth structure centered on the Seoul metropolitan area and large conglomerates and shift toward a startup-driven economy. 

The Ministry of Finance and Economy announced the plan on April 24 after an emergency economic headquarters meeting and a National Startup Era strategy meeting chaired by Deputy Prime Minister and Finance and Economy Minister Koo Yun-cheol.

The ministry said it sees “K-shaped growth,” in which gains concentrate in the capital region and big companies, as becoming entrenched, while automation is reducing structural employment. It said it will push a strategy to spread entrepreneurship to shift the jobs paradigm from “finding” work to “creating” it.
 
As part of the effort, the government will expand the “Startup for All” project. Following the first nationwide idea contest now underway, it plans a second round later this year using a supplementary budget of about 200 billion won. Entrepreneurs will be selected through regional audition-style competitions, and the final winner will receive prize money of at least 1 billion won and support linked to follow-on investment. The government said it aims to run the project as a practical startup incubation program rather than a simple contest. 

The government will also develop 10 “startup cities” as hubs for technology-based entrepreneurship. It will designate four cities hosting KAIST, DGIST, GIST and UNIST later this year, then select six more, mainly outside major metropolitan areas, by the first half of next year. The startup cities will receive a package of support combining talent development, research and development, investment and startup space.
 
Planned steps include creating innovation startup institutes at each science and technology institute, expanding deep-tech startup-centered universities, shortening approval procedures for faculty and student startups from up to six months to about two weeks, extending startup leave from three years to up to seven years, and removing limits on leaves of absence. 

Startups in these regions will be eligible for up to 350 million won in commercialization funding. The government said it will build a regional growth fund of at least 450 billion won this year and expand it to 2 trillion won by 2030.

Support for entrepreneurship tied to local commercial districts will proceed in parallel. Under a “Local Commercial District for All” strategy, the government will foster 17 “glocal” commercial districts and 50 local theme districts. It will also expand the LIPS program, which provides matching loans of up to 500 million won and commercialization funds of up to 200 million won for companies seeking investment, to 450 firms from 300. An additional 40 billion won in supplementary funding will be投入 into support for everyday-technology development. 

To improve the broader startup ecosystem, the government said it will introduce a “three-part package” to encourage private investment: expanded incentives for venture investment outside the capital region, a new intermediary platform for venture capital to boost early-stage stock trading, and permission for retirement pensions and public pension funds to invest in venture capital. It also plans to strengthen funding support, including a 50 billion won “startup boom” fund and a “second-chance” fund totaling 1 trillion won by 2030. 

The government said it will introduce “mega special zones” to grant regulatory exemptions to startups in strategic industries, and provide up to 340 million won for open-innovation projects between large companies or public institutions and startups. It also plans to develop AI solutions using manufacturing-site data and apply them to 1,000 processes by 2030. 

It said it will institutionalize support for entrepreneurs seeking to try again after failure by introducing a “challenge resume” that datafies startup experience, expanding support for re-founders, and creating a youth startup challenge school, aiming to make failure experience an asset. 

“Startups are a jobs policy, a youth policy, and a strategy for balanced regional development and national growth,” Koo said. “We will do everything we can to create an environment where anyone can start a business anywhere with just an idea, open a ‘startup boom National Startup Era,’ and spread ‘Startup for All’ into ‘growth for all,’” he said. 



* This article has been translated by AI.

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