Asian tiger seeks bigger bite of new economy with young tech talents eager to pounce
Meet the geeks of Teheran-ro - South Korea's own Silicon Valley.
Mr Kim Kang Hak, 33, used to analyse big data for a living, while Mr Regan Hwang's job was to "evangelise" technology.
Both were working for top players in the IT industry - the former at South Korean Web portal Daum and the latter at US tech giant Microsoft. But they have chosen to join the rising ranks of young, tech-savvy talents who ditch safe jobs in big companies to strike out on their own.
Riding on a start-up wave that is sweeping the country, Mr Hwang co-founded an online headhunting platform that rewards job referees with up to US$5,000 (S$6,754), while Mr Kim is working with two partners to develop a language app for smart watches.
For the two men, this is a right time to be venturing out.
Not only is the country betting billions of dollars on a creative economy on the back of its strength in information and communication technology (ICT), but foreign investors are also coming in droves, including US tech giant Google, which set up its first Asian campus for entrepreneurs, where Mr Hwang and Mr Kim have their offices.
Under President Park Geun Hye's policy push for the creative economy to boost output and employment, an increasing number of incubators, accelerators and innovation centres have been set up around the country - together with funding provisions - to help budding technopreneurs bring their ideas to fruition.
Ms Park, the country's first engineering-trained president, has also urged engineering colleges, which produce about 69,000 graduates a year, to revamp their programmes and prep students for new challenges brought by this economy.
In the words of Mr Choi Mun Kee, who heads the Ministry of Science, ICT and Future Planning, set up only in April 2013, the government will push for a "paradigm shift in the Korean economy to transform ourselves from being a follower to (being) a leader".
These efforts are already seeing some results.
Within the capital city Seoul, Teheran-ro (Teheran Road) in the upscale Gangnam district has small start-ups mushrooming amid US giants like Google, Facebook and Amazon.
If the Samsung smartphone is synonymous with the growth of the nation's tech-based economy until now, the next wave is likely to be something less tactile and more online-based - such as apps for a wide range of activity, from grocery shopping to gaming.
The start-up scene is so vibrant that some have started to hail South Korea as the Silicon Valley of Asia. The New York Times, for instance, said Silicon Valley "can learn from Seoul", praising the latter's broadband infrastructure, high-speed Wi-Fi and innovative mobile apps that are not only multifunctional, but also turning in healthy profits.
E-commerce firm Coupang, started by Harvard dropout Kim Bom, is blazing the trail , having drawn over 25 million mobile downloads (among a population of 50 million) for its discount-shopping website and fresh funding of US$1 billion from Japan's Softbank just last month.
Mobile services start-up Yello Mobile, which was founded by a former Daum executive, drew US$100 million in investment from Silicon Valley venture fund Formation 8 last November.
Food-delivery app Baedal Minjok, which processes five million orders a month, raised 40 billion won (S$48 million) from Goldman Sachs investment bank.
Meanwhile, hardware start-up Zikto has developed a stylish wristband that not only tracks activity, but also uses a patented technology to analyse walking posture and correct bad habits.
The wearer's unique walking pattern can be used as a biometric to unlock his smartphone.
The company has managed to raise more than US$150,000 on crowdfunding platform Kickstarter to launch the product by this year.
If start-ups need any inspiration, they can just look to KakaoTalk. Launched in 2010, the multi- platform mobile messaging app has grown so big, it has about 180 million users worldwide.
Now merged with Web portal Daum, KakaoTalk has continued to grow in functions, allowing users to not only chat but also watch TV, shop and book taxis. It even has a voice-recognition function that transcribes what the user says into text, saving him or her the trouble of typing a reply. You could say it is Facebook, Amazon, Whatsapp, YouTube and Uber rolled into one.
The flurry of start-up activities and foreign investment is why Google chose to start its first Asian entrepreneurs' campus here.
"Korea is very advanced in the mobile market, and we've seen start-up density growing in the past two to three years, with investors coming in, the government giving support, and companies showing the willingness to go global," said Mr Jeffrey Lim, head of Google Campus Seoul.
US seed fund and accelerator programme 500 Startups launched a US$15 million fund, dubbed Kimchi, after the fiery Korean side dish, in February for pretty much the same reasons.
"I think Korea has all the right ingredients to be well represented in the next wave of amazing globally used products in the current mobile age," said Mr Tim Chae, who heads the fund. "Everything made sense. Good population size, great economic wealth per capita, great smartphone penetration and Internet speeds, but also backed by a sizeable existing network of early-stage investors and downstream investors."
The fund has an office within the Google campus. Opened in May, the spacious 2,000 sq m campus at Autoway Tower offers mentorship programmes, event space, and a cafe for its nearly 5,000 members. These include about 500 foreigners from over 40 countries.
When this reporter visited on a Monday, the cafe was filled with customers hunched over laptops, some typing furiously while others sipped coffee leisurely.
Eight start-ups, including Mr Kim's Fluenty Inc and Mr Hwang's WantedLab Inc, are housed on the campus. They were selected from 150 applications and get to use the open-plan workspace free for six months.
Being chosen by Google Campus is "like an endorsement", said Mr Kim, who intends to release his language app by this month.
But what's in it for Google?
Mr Lim said the Seoul campus - the third after London and Tel Aviv - is seen as a long-term investment.
"Innovation doesn't come from just inside of Google, but also outside of Google. That's why we're helping start-ups, which will bring more Internet and mobile users and make the market bigger, and Google will indirectly benefit. If there are no start-ups, our business won't exist."
An upcoming programme is the five-week-long Campus for Mums, which provides babysitting services so the women attending it can focus on learning how to start their own businesses.
About 30 mums - from housewives to doctors - have been selected for the programme, and their business ideas range from selling baby products online to environmental protection.
"I've seen many women quit their jobs to raise kids and, five years later, they want to go back to their career but find it difficult. We're happy to help them," said Mr Lim.
The next step for start-ups is to go global - an area in which Korean firms have traditionally struggled due to language barriers and the lack of know-how.
But there is help now with companies like Startup Alliance and Google Campus providing networking opportunities with foreign partners.
"We're trying to prove our concept in Korea first, then take it global. We can help Korean talents find jobs in Singapore and vice versa," said Mr Hwang. "Google Campus is a good place to make it happen, because of its global network and visibility."
Still, while the signs are encouraging, South Korea's economy is still dominated by conglomerates - known as chaebol - with deep pockets to attract top talents.
A mindset shift is needed to get young talents to go into start-ups instead, said Mr Lim Jung Wook, managing director of Startup Alliance.
"Even in Korean dramas, the protagonists are chaebol sons, which gives a distorted image of the business environment," he said. "But Korea's economy is in a dire state. Samsung is sandwiched between Apple and Xiaomi, it's not easy to compete internationally."
To do so, this Asian tiger will need new innovative firms with more cutting-edge technology.
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