The following was contributed by Seo Seung-won, director general at Business Start-up and Venture Bureau at the Small and Medium Business Administration. ― Ed.
On Oct. 6, Apple’s Board of Directors made the official announcement of the death of tech-giant Steve Jobs, who brought a whole new level of technology experience to human beings in our generation. He is a historical figure who started the popularization of personal computers in the 1970s with the Apple II series. The ex-CEO later opened a post-PC era with iPhones.
On the very day Steve Jobs passed away, “Super Star V” was being held at Seoul Trade Exhibition and Convention. The event was an audition for future venture businesspersons, hosted by the Small and Medium Business Administration. When the news about Job’s death broke the participants in the event were pledging to make further contributions to the development of technology, filling the empty space left by the late Apple co-founder.
The Korean government’s financial assistance to start-up and venture companies goes back to 1997. The conglomerate-led economic development model, which helped Korea’s fast-growing economy, hit a wall in the late 1990s due to the Asian financial crisis. At one of the most difficult times in Korean history, the government promoted in earnest start-up entities to recover from the economic malaise. As a result, venture firms were cited as a major contributor to helping the nation overcome the financial crisis in a short time.
But there were also negative side effects from the venture boom. Imprudent investments and financial crimes such as fraud swept the country. Venture company owners were once admired by many college graduates in the past but now they were being regarded as no more than con men. The number of venture companies fell to 7,000 in 2003 from 11,000 in 2001.
The investment bubble may have crushed everything, but not the venture spirit. With venture business owners who never gave up even in a difficult phase, the government’s support even during economically stagnant periods and the change of the business environment powered by the revolution of the mobile phone industry, another heyday for venture companies arrived. The number of new entities reached a record 26,377.
To speed up the trend, the Korean government decided to provide more benefits to small businesses when allocating the 2012 government budget. They included tax reductions to attract investors ― people who invest in small and medium companies.
However, looking back on our experience, government measures have limitations in the end.
In this sense, Korea needs to take Silicon Valley as an example. A dream place for every venture firm owner, Silicon Valley has a strong support system for future CEOs, providing mentoring programs and education on merger and acquisitions. The system works under collaboration between universities, angel investors, venture capital and senior venture pioneers.
Apple, Google, and Facebook were all able to get a foothold in their respective industries thanks to Silicon Valley.
Luckily, steps toward a more ideal business environment are looming in Korea as well, and it is noticeable that the public is on the frontline of this change.
Early this year, Korea Entrepreneurship Foundation was established, aiming at the same goal as Kauffman Foundation in the United States: to spread an entrepreneurial spirit. After the introduction of KEF, moves to assist starting venture firms took place at a public level.
Also, Korean Venture Business Association is receiving a positive response from participants by holding mentoring programs for young venture explorers. The mentors are invited from different areas of business.
Going back to Steve Jobs, not everything he did resulted in success. The Apple III series failed in competing with IBM’s products and in 1985 he was fired from his own company. His “Stay hungry, stay foolish” mind worked well under the flexible system of the U.S. government and became the basis of his phenomenal success.
For a public-led venture renaissance to flourish in our generation, people need to change their perspective toward their business strategies; challenge should always come before having a fear of failure.
The lessons from the life of Steve Jobs and Silicon Valley’s history are what we and the government should always keep in our mind for further development of venture companies.
By Seo Seung-won