As the curtains rise in 2024, South Korea’s business landscape is set to sparkle with newfound optimism and financial vigor. The Ministry of SMEs and Startups unveils a robust 3.7121 trillion won (USD 2.8 billion) budget for the ‘2024 Central and Local Government Entrepreneurship Support Project,’ signalling a momentous 1.4% increase from the previous year. This surge underscores the government’s commitment to fostering innovation and sets the stage for a dynamic year of business growth and collaboration.
On January 3rd, the Ministry of SMEs and Startups unveiled the ‘2024 Central and Local Government Entrepreneurship Support Project Integrated Notice’, which includes a comprehensive breakdown of 397 startup support projects from 99 organizations. The budget surge of KRW 51.4 billion (USD 3.9 million) compared to the previous year highlights a continuous upward trajectory in government investment in startups, reaching an all-time high. This is 45.3 billion won (1.2%) more than the 2022 budget (3.6668 trillion won), the largest budget for startup support projects ever.
The Ministry’s integrated notice, in effect since 2016, aims to provide entrepreneurs with transparent and easily understandable information on domestic startup support projects. Since 2022, it has also encompassed all startup support initiatives operated by both central ministries and local governments.
Budget Distribution: Key Focus in 2024 Support Landscape
In terms of budget distribution, the Ministry of SMEs and Startups leads among central ministries, allocating a substantial KRW 3.4038 trillion (USD 2.6 billion), including KRW 2.0458 trillion (USD 1.5 billion) in loans, representing 95.6% of central ministries’ contributions. Among local governments, Seoul City takes the lead with a budget of KRW 38.5 billion (USD 29.4 million), constituting 25.5% of local government allocations.
The support projects cover eight categories, with loans and guarantees commanding the highest share at 55.3% (KRW 2.0546 trillion/USD 1.57 billion). Commercialization follows closely with KRW 793.1 billion (USD 606 million) (21.4%) and technology development at KRW 544.2 billion (USD 416 million) (14.7%). The ‘TIPS Program,‘ which jointly supports promising startups in the public and private sectors, stands out with a substantial increase of KRW 93.3 billion (USD 71.3) compared to the previous year, amounting to planned support of KRW 471.5 billion (USD 360 million) for 1,925 companies.
Notably, the 2024 projects focus on global expansion, encouraging overseas talent to start businesses domestically, and facilitating re-challenges. The re-startup loan funds increased by KRW 25 billion (USD 19 million) from the previous year, reaching KRW 100 billion (USD 76 million).
Major Startup Support Projects
Major startup support projects include the ‘Super Gap Startup 1000+ Project,’ targeting promising startups in 10 new industries, and the global corporate collaboration project, which will invest KRW 43 billion (USD 32 million) in 290 companies. The K-Startup Center project will contribute KRW 15.44 billion (USD 11.8 million) to 140 businesses, providing local childcare programs and support for global entrepreneurs. The K Global Overseas Expansion Support Project and Tourism Global Leading Company Development Project will allocate funds to 150 and 30 companies, respectively.
Seoul City is a significant contributor among local governments and actively supports 33 projects in collaboration with 13 essential local governments. Gyeonggi Province follows with KRW 15.3 billion (USD 11 million) through 41 projects.
To streamline the utilization of government and local government support projects, Lim Jeong-wook, head of the Startup and Venture Innovation, the office at the Ministry of SMEs and Startups emphasized ongoing efforts to enhance system efficiency and convenience for policy customers. “Through integrated notices, we will effectively inform startups of the various projects of central ministries and local governments and bring about connection and cooperation between support projects so that the support policies can produce practical results,” he said.
Leadership Transition
In a parallel development, on January 2nd, the Ministry welcomed its 5th Minister, Oh Young-joo, who expressed a strong sense of duty and responsibility in representing the 7.7 million small and medium-sized venture companies and small business owners. Minister Oh outlined essential work standards, policy directions, and organizational operation principles in her inauguration speech, setting the stage for a transformative period in South Korea’s startup landscape under her leadership.
The 2024 Entrepreneurship Support Project is poised to drive innovation, promote sustainable growth and strengthen South Korea’s position in the global startup ecosystem.
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- Korean Ministry selects venture fund managers worth $245 million to support startups & entrepreneurship
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