Korea's venture business policy and its implications for developing countries

Recognising the importance of technological growth, the Korean Government has tried to promote venture businesses through financial and tax incentives as well as infrastructure provision. The number of venture businesses increased rapidly during the mid-2010s. Although the number of M&As has grown, that of venture businesses funded mostly from venture capital remains low, which is a challenge to be addressed. The experience of Korea regarding the venture business promotion policy provides policy implications for countries, middle-income developing countries in particular, trying to promote venture businesses. Among others, a government policy that relies heavily on large firms may lead to structural problems. Developing countries that lack institutions promoting venture businesses need to introduce and/or strengthen policy measures and institutions such as venture capital, tax incentives, credit guarantee schemes, angel investment, crowdfunding and M&As for exits.