AGUIDETHE INNOVATIONTOECOSYSTEMOFKOREA

1

The guide presents the main business opportunities, the mostimportant leads, and most interesting stakeholders, as seenfrom a Danish perspective. We give you a realistic understanding of the local startup scene based on first-hand experienceand on-the-spot dialogues.
This publication has been developed by Asia House andPREFACE

TechBBQ as part of a series of guides to innovation ecosystems in the China Bay Area and Taiwan, India, Japan, Korea,and Singapore.
The series is published as part of the non-profit initiative
Innovation Lab Asia to improve and enhance cooperation be-This guide gives you a breif introduction to theKorean innovation ecosystem, with special focus onSeoul where most of the startups and stakeholders
are based.

tween Danish and Asian innovation ecosystems. The project is
supported by the Danish Industry Foundation.
For further information and guidance, contact:
ASIA HOUSEPeter Johansen, Project Manager

TECHBBQ
Lisa Mallner, Lead Consultant

MAIL
hello@innovationlabasia.dk23

WHY KOREA?

The Nordics carry a strong brand value inKorea. Several South Korean TV programs, for example, have reported on the Danish society, elaborating on concepts such as “flexicurity”, “equalwork culture”, “work/life balance” and a strong
welfare society. Denmark is famous for being oneof “the happiest countries in the world” and even“hygge” is a recognized phenomenon.

Complement this with the celebration of 60 years of bilateralrelations between Denmark and Korea, and the fact that Korea
is the third-largest export destination for Danish products toAsia, Korea should be on the radar of Danish entrepreneursconsidering Asia.

45KOREA

poorest countries in the world. Today, with just 51 million

AGLANCE•

Exports of goods and services made up
43% of Korea’s GDP as of 2017, compared to55% for Denmark and 28% across all OECDmember states•

Korea has the world’s highest percentagesof citizens holding a university-level degree•

The country is a signatory to 52 bilateralor multilateral trade agreements that arecurrently active•

Korea ranks # 5 on the World Bank’s Global
Ease of Doing Business Index

Indeed, the transformation of Korea has been remarkable.
During the 1950s, Korea was ravaged by war and one of theATpeople, Korea is the world’s 11th largest economy and a cultural
trendsetter, with Korean pop music and TV dramas becoming
household names across Asia.
Korea’s rapid development was made possible by several
factors, including a strong work ethic and dedicatedcollaboration between the public and private sector that paved
the way for large conglomerates, called chaebols. Today, the10 top chaebols own more than 27% of all business assets in
Korea. However, this overdependence on a few large companies
is risky for the Korean economy, and their national dominancemakes it more difficult for startups to compete.
Recognizing this problem, in 2011 the government initiated aconcentrated effort to maximize the growth potential of hightech companies through the development of an industrial
complex just outside of Seoul, known as the Pangyo TechnoValley.
These efforts were further intensified in 2013 in a program
collectively known as “Creative Economy”, which has included
about USD 2 billion in annual expenditures over the past fiveyears. The current administration has continued to support
these efforts and in 2018 the government announced a new
USD 9 billion fund for startups.
67

MAIN ECOSYSTEM OVERVIEWSEOUL•

Seoul is one of the largest metropolitan
areas in the world, and the powerhouse ofthe Korean economy. Greater Seoul is hometo half the Korean population and generates
half of the total GDP. Most of the country’s
giant conglomerates are headquarteredin Seoul including Samsung, Kia, LG, andHyundai, as is the Korean innovation ecosystem.

BUSAN•8

Busan is Korea’s second largest city, thelargest industrial area, and the world’s fifthbusiest port city. The nearby island of Geoje
hosts the most advanced shipbuilding facilities in the world. This is the place for anyone
working within the field of Maritime tech.

9THE
ECOSYSTEM
AT A GLANCE
SEOUL

After years of focusing on creating a more entrepreneurial
spirit, Korea is now home to more than 30,000 startups,
primarily concentrated in and around Seoul. This growthin the startup ecosystem has sparked new opportunities
for international startups, especially in fields whereKorea already has a stronghold thanks to local talent,resources, and infrastructure.

For international startups looking to scale into the Koreanecosystem, it is critical to work with local partners as theecosystem is only just beginning to open up to foreigners.

1011

KOREANINNOVATION•

Korea spends 4.5% of its GDP on R&D, thehighest globally•

Korea has the most patent applications in
the world compared to GDP•

Korea topped Bloomberg’s Innovation Index
in 2018, for the second year in a row•

Korea has the highest robot
density worldwide•

Korea launched the first 5G network everand hit 1 million subscribers in 69 days

Local partners are crucial in order to interpret the cultural andlegal frameworks within the business culture of Korea, which
is dissimilar from Western business culture. Scandinavians
especially find it challenging to navigate the hierarchicalstructure of Korea.
Another barrier of note is government regulation withintechnology innovation. Outdated regulations often work for thebenefit of the big conglomerates, at the expense of startups
and SMEs. For example, Korean laws entirely or partially block
about 70% of the world’s top 100 startups by investment size
from bringing their services to the country. Those include giants
such as Airbnb, Uber, and China’s Ant Financial. Although thegovernment is trying to loosen up on some of these regulations,they still exist and must be considered.
Nonetheless, Korea holds attractive prospects for Danish
startups, especially where Denmark has strong capabilities on aglobal scale and/or where Korea is a leading actor in technology
development, such as in Audio, Blockchain, Fintech, Maritime
technologies, Greentech, and IoT.
1213

AMAIN LEADS
There is a growing political will from thegovernment’s side to foster and support foreignfounded startups in Korea. These programs areperhaps the most interesting from a Danish pointof view:•

K-Startup Grand Challenge invites startups from around•

QUESTION

OFCULTURE•

Korea is homogeneous. 96% of the population are ethnic Koreans, andKorean culture is characterized by a strong sense of collectivism.

•Koreans are hardworking and put in more hours than other OECD citizens.

•Koreans appreciate formality. Dress sharp, show respect, and rememberthat emotional outbursts are usually frowned upon.

•Korea is hierarchical. People of higher age and rank enjoy higher status
and employees of lower ranks rarely question orders from superiors.

•Connections are king. Take your time to build personal relations andunderstand that Koreans usually work from a long-term perspective.

•Avoid embarrassing others. Fear of losing face is deeply embedded andreflected in a more indirect way of communicating.

D.CAMP is a foreigner-friendly, non-profit startup com-the world to establish themselves in Korea, with full sup-munity ecosystem that serves as a support network

port from the Korean government. The 3-month acceler-

for young startups. Their facilities including co-work-

ation program is based in Gangnam and includes a large

ing space, lounges, lecture rooms, event halls, andcollection of mentors thanks to the Google for Entrepre-

dedicated offices for promising early-stage companies.

neurs’ network.

Startups here have a higher survival rate than average,
and most alumni receive funding after their stay.

The program also offers mentorship from leading Koreantech companies Samsung, Hyundai, SK, KT, Naver, and LG,and free office space in Google Korea’s Startup Campus.

1415

OTHER LEADS
Innovation Lab Asia has established contacts withseveral interesting organizations in Seoul thatmight prove relevant for Danish startups. We canfacilitate further contact if needed.

•MARU180 is a startup incubator set up and managed
by the Asan Nanum Foundation. Maru180 offers its own
coworking space and also runs the coworking space at
Google Campus Seoul. Both spaces are located in Gangnam. In addition, Maru180 provides entrepreneurs withmultiple resources and opportunities including education programs, mentorship, investment, and networking.

•Samsung NEXT was founded in 2012 to help launch strategic projects for Samsung in a more agile way. This accelerator has a specific international focus and is open to anycompany whose technology fits Samsung’s mission. Samsung NEXT has established a fund of nearly USD 150 million
for pre-seed to series B investments in startups specializing in VR, AI, IoT and “other new frontier technologies.”
Outreach usually happens on a case-by-case basis.

1617

AOTHER GATEWAYS &ACCESS POINTS•Seoul Global Startup Center is a startup incubator found-•DreamPlus is an ICT accelerator powered by the Hanwha

ed in 2016, that supports foreign entrepreneurs in Korea

Group that is focused on helping companies scale into oth-through their startup journey in Seoul. The project received

er Asian markets. The accelerator also works with ecosys-

funding from the Seoul Metropolitan Government and istem building across Asia.

operated by Rehoboth, a private business incubator with 20years’ experience in Korea. The Seoul Global Startup Center•Google Campus Seoul Google Campus Seoul offers aoffers a variety of services meant to ease the challenges

variety of services to its members, ranging from men-that foreign entrepreneurs face as they start and run theirtorship programs and networking opportunities to freebusinesses in Korea.

cloud services. Located in Gangnam and started inFEW

FACTS

ONSEOUL•

Seoul Capital Area has a population of 25
million and generates 50% of Korea’s GDP•

Seoul Capital Area is estimated to be thefourth largest urban economy in the world(after Tokyo, New York City, and Los Angeles)
and the fifth largest metropolitan area•

Seoul ranks amongst the top 12 upcomingecosystems (Startup Genome 2019)•Seoul ranks 15 on the Economist 2025 City
Competitiveness Index that monitors thefuture competitiveness of cities•

Seoul was listed as the world’s 7th mostexpensive city in 2019, on level with
Copenhagen2015, this was the first Google Campus to open in Asia.
•SparkLabs is a global accelerator providing investment
solutions and mentoring for seed to early-stage startups••

HeyGround is a co-working space for startups with a spe-

who wish to expand to the global marketplace. They havecific social impact component. Located in the up and com-a focus on startup companies from Consumer Internet,

ing Seongsu area, complete with quirky cafes and restau-Enterprise Software, Online Gaming, Mobile, E-Commerce,rants, HeyGround is a beautifully appointed co-working

Digital Media sectors, and Healthcare. The program is threespace. They offer desk rentals and private offices and hostmonths and includes funding, office space, and access to a

impact-focused events. Members have full access thenetwork of entrepreneurs, venture capitalists, angel inves-community spaces and other amenities like a photo studiotors, and executives.

and concierge service.

N15 is a pioneering hardware accelerator in Korea that discovers, grows, and invests in hardware startups and helps
them expand to the global market by providing intense legal
and business consulting services.

1819

STRONGHOLDS& OPPORTUNITIESThe Korean strongholds and opportunities are reflected by theIoT is the strongest sector in Korea for foreign startups.

fact that Korea is a highly advanced society. Thus, Korea hasThis year, Korea is expected to become the world’s fifth largest

periodically dominated the global cryptocurrency exchanges

market for IoT-technology. Furthermore, as one of the mostand is a leader within Blockchain technologies. Korea has one

interconnected places in the world, Korea could be attractiveof Asia’s largest eCommerce markets, with five major platforms

as a testbed for IoT firms that wish to perform tests withinvying for dominance. One of these, Coupang, has raised USD 3

the fastest and most established 5G network in a real-world

billion from Softbank, one of the largest of such investments

setting.

ever made. Korea also has the world’s largest food delivery
service, Baedal-e Minjok.

The Greentech sector is also of particular relevance,
due to the strong Nordic brand in this area. Several Danish

Audio is one sector where Danish companies have a brandcorporates are already operating in Korea, and there is a highrecognition. Larger companies have gained a local footholdlevel of respect for their expertise.

while Danish startup Audiowise has engaged with Hyundai
Motors. Synergies may also be found within the Maritime
sector, where both Denmark and Korea have a strong presence.

2021IOT••

The domestic sales of the Korean IoT industry stood at USD

GREENTECH•VC, incubators and accelerators connected to Korean•

The Korean government is pursuing ambitious goals

nies, and in 2015, the Seoul Metropolitan Government

7.7 billion in 2018, an increase of 19% from 2017. In just four

telecoms are often open to international applicants.

within renewable energy and is investing heavily inalone purchased nearly USD 70 million worth of goods

years, the market for IoT has doubled.

One of the largest, Samsung Next, has established a fundGreentech. In 2011, the Korean government launched aand services from social enterprises. Therefore, manyof nearly USD 150 million, targeting startups specializing inplan that included creating 1.5 million jobs within sustain-

Greentech startups may find it relevant to collaborate di-VR, AI, IoT, and “other new frontier technologies.”

able energy and to take up 18% of the global market for

rectly with government agencies. The Korean Interna-

ment-based stage to focusing more on platforms andclean energy by 2030. A goal has also been set for 20%

tional Trade Association (KITA), which has many programs

services, which are segments that are expanding gradual-of Korea’s total electricity consumption coming from re-and services for foreign startups, is a good place to start.

ly. The sales of wearable devices and smart terminals ac-

newable sources. The government is focusing most-counted for 43% of the sales in 2018 equal to USD 3.3 billion.

ly on solar and wind power in order to achieve this goal.

The market has started to move from the initial equip-•Many chaebols also have dedicated incubators, accelerators, and VC funds to promote social enterprises. H-On•Korea is a major hub for IoT-related technologies, such•

Like much of Korean the startup ecosystem, Greentech

Dream, for example, is a venture incubation programas VR, AR, gaming, and AI, and as such there are oppor-

is heavily supported by the government. While specifical-launched by Hyundai and the Korean government for start-tunities for Danish startups in these sectors, especiallyly Greentech focused programs are rarer, there are manyups with a positive social contribution.

through collaboration with one of Korea’s large telecoms

support organizations for social enterprises broadly.

such as SK Telecom, KT, and LG. Korean telecoms are global leaders. In 2019, 5G mobile data service was introduced•The Korea Social Enterprise Promotion Agency (KoSEA) is aby Korea’s three largest telecoms as part of a govern-

national agency solely dedicated to fostering social enter-ment-backed initiative, making it the first nation in Asia toprises. The Seoul Social Economy Center (SSEC) also pro-launch commercial 5G networks.

vides technical support, capacity building, and networking
assistance to Seoul-based social enterprises. The Korean
government is itself a major customer for such compa-22

23

This report has beendeveloped by

In a collaboration
betweenWith support fromAsia House
24|

Indiakaj 16, Copenhagen|www.innovationlabasia.dk|

hello@innovationlabasia.dk