Korea was one of the poorest countries in the 1960s yet it has made it to become the world’s 12th largest economy today.  Today, it ranks first in the world in terms of innovation, mostly due to its huge R&D spending by the Chaebols.

Chaebols, the large family-owned business conglomerates, are a large feature of the Korean economic landscape with companies like Samsung, making up 18% of GDP! All Chaebols together (LG, Hyundai, SK…) account for about 85% of GDP, although they employ only 13% of the workforce, according to statistics compiled by Euromonitor in 2016. These companies invest huge amounts of money in R&D, making Korea the 2nd highest ratio of R&D spending to GDP in the world, only beaten by Israël.

Korean young entrepreneurs are encouraged by the government which wants to create a “creative economy”, one that favors and encourages young entrepreneurship. Currently, no country in the world has more backing per capita from the government than Korea. The government is actively supporting startups to the tune of US$2.5 billion to US$3 billion per year. The government is strongly committed to R&D, plying Chaebols with cheap loans and tax incentives, and to IT infrastructure. Korea was the first country to have more than 100% mobile penetration.

To encourage collaboration and innoation, the government spent US$66 billion to develop Pangyo, a city in the South of Seoul into Korea’s Silicon Valley.  Born2Global reports that Korea’s top 60 start-ups and K-Global 300 start-ups are all located in the Pangyo Start-up Campus.