SEOUL, June 7 (Xinhua) -- South Korea's minister of small and medium-sized enterprises (SMEs) and startups vowed Friday to create the second venture boom, led by the private sector and supported by the government, in a bid to foster new growth engines in the Fourth Industrial Revolution era.
"The second venture boom is within sight some 20 years after the first venture boom in early 2000s contributed to the birth of new large corporations," Minister of SMEs and Startups Park Young-sun said in a press conference with foreign correspondents in Seoul.
Since the Moon Jae-in government was launched in May 2017, the venture investment grew rapidly to reach a fresh record high of 3.4 trillion won (2.9 billion U.S. dollars) in 2018, topping 3 trillion won (2.5 billion U.S. dollars) for the first time.
The angel investment for business startups amounted to 509.8 billion won (430 million U.S. dollars) last year, nearing the amount tallied in 2000 when the first venture boom emerged.
The number of unicorn companies increased to eight as of April from three 10 months earlier. The unicorn company refers to a startup valued at over 1 billion U.S. dollars.
The minister credited the rapid growth to the Moon government's launch in 2017 of the funds of funds, which refer to a pooled fund that invests in other venture capitals with the government fund as a seed money.
According to the ministry, seven out of the eight unicorn companies grew up with investment from the state-backed funds of funds.
Park, the four-term lawmaker of the ruling Democratic Party, noted that though the government ignited the venture investment through the funds of funds, the second venture boom will be led by the private sector.
"To make the money flow into the fitting place, the private sector should be allowed to determine where the money goes ... The government will set a basic principle and reduce its influence as least as possible," said Park.
Influenced by the government's venture boom efforts, the country's biggest steelmaker POSCO decided in May to voluntarily raise a private fund of funds worth 1 trillion won (850 million U.S. dollars) to nurture venture companies.
To provide second chances for the failed startup businessmen, the ministry drew up programs to help support their re-establishment of startup firms and sought to create a startup-friendly ecosystem by expanding direct investment rather than lending.
The government support targeted the so-called Fourth Industrial Revolution areas such as artificial intelligence (AI), autonomous driving, fintech, smart healthcare and online to offline (O2O) as it saw the areas as new growth engines of the export-driven economy.
The investment in the Fourth Industrial Revolution areas took up almost 40 percent of the total venture investments in 2018, posting a year-over-year surge of 71 percent.
"Everything is changing with the advent of the Fourth Industrial Revolution. A sustainable growth will only be made possible when big corporations, which led the past growth, co-exist with small and mid-sized companies that have a high growth potential," said Park.
Park said the ministry aimed to raise the number of unicorn companies from the current eight to as many as 20 by 2022 through the second venture boom.
The ministry planned to create the so-called scale-up fund worth 12 trillion won (10 billion U.S. dollars) by 2022 to provide support for startups in pursuit of becoming unicorn companies.