[아시아초대석]“Manufacturing, which is the main axis of the industry, is outside of ventures… Support policy urgently”

617 ventures with more than 100 billion won in sales… Total sales of 140 trillion won, 4th in re-affiliation
1.5% of the total investment attraction for manufacturing startups, and only 11 preliminary unicorns
Venture investment inclined to platform… Support for strengthening manufacturing venture capabilities

[아시아경제 김희윤 기자] “The second venture boom is becoming visible through the government’s various venture promotion policies and investment activation. In order to sustain such growth, we will actively respond to regulatory issues in new industries such as telemedicine and will focus on improving the effectiveness of tax incentives for venture companies.”

This is what Chairman Kang said at the inauguration ceremony held at the Venture Business Association in Guro-gu, Seoul on the 25th of last month. It emphasized the role of the association that is necessary to sustain the second venture boom, which came from a state where the experience and capabilities accumulated by the government and the private sector became stronger.

In fact, the total sales of domestic venture companies with annual sales of more than 100 billion won was 140 trillion won as of the end of 2019, which was confirmed to be the fourth largest in the business world after Samsung, Hyundai Motors, and SK. Venture 100 billion companies also stood out compared to large, mid-sized, and small and medium-sized companies in terms of management performance. At the end of 2019, the net profit margin of sales was 5.9%, which was 1.9 times that of large companies (3.1%) and 2.7 times that of small and medium-sized businesses (2.2%).

Chairman Kang said, “It is confirmed that venture companies are playing a supporting role in the Korean economy in various aspects such as new job creation and sales. “We will play a role as a platform to support sustainable growth.”

He then emphasized the importance of manufacturing ventures in the venture ecosystem where information technology (IT) and platform services are the main focus of recent years. Chairman Kang, the representative of Point Mobile, an industrial personal portable information terminal (PDA) manufacturer, has deep experience and interest in manufacturing ventures.

However, manufacturing ventures and startups are marginalized from investment attraction and government support. According to a report on domestic startup trends released by Rocket Punch, a startup recruitment platform last year, of the total startup investment in 2019 (5,111.2 billion won), manufacturing startups attracted 76.3 billion won, which was 1.49%. In addition, out of the 42 preliminary unicorns selected by the Ministry of SMEs and Startups in 2019, platform-based startups accounted for about half (20 companies, 47.6%), while manufacturing-related startups accounted for only 11 companies (26.1%).

Chairman Kang said, “It is a regrettable reality that manufacturing-based startups and ventures in Korea, where the manufacturing industry is the main axis of the industry, is failing. It is urgent to have a policy that takes responsibility for everything from investment to childcare and demand linkage so that these companies can be competitive in the global market.”

Reporter Kim Hee-yoon [email protected]