Nurturing start-ups in South Korea

This chapter aims to examine the status of the Korean start-up ecosystem in terms of its historical background, current problems and their causes, and alternatives for solving these based on a socio-cultural perspective. It is also based on the argument that firms’ competitiveness is the result of collective behaviors of networked companies as well as the strategic actions of an individual company. Problems related to the Korean start-up ecosystem are analyzed at the individual, organizational, and industrial levels, and are influenced by the institutions, practices, and trends established in the previous economic development process. At the individual level, tendency toward avoiding risk and high rate of start-ups for daily living are highlighted; at the organizational level it is the lack of expertise and flexibility; and at the industrial level it is ineffective policy and conservative culture. This is due to the pali, pali mentality and the imitative economy paradigm that has built up over the past 50 years of Korea’s remarkable economic growth. To combat these problems, I propose the following solutions: at the individual level, a change in mindset and behavior; at the organizational level, open innovation combined with the necessary support; and at the industry level, effective government policy and a start-up friendly culture.