Governments around the world are falling. For example, European decision -makers are willing to increase The industrial significance of the region in a world in which the US and China are dominated by the latest technologies. They want to move except for the saying that “the US introduces innovations, China and the EU replicas regulate.”
As a part of this, decision -makers around the world try to support their very own versions Silicon Valley. They invested to create ecosystems abundant in ambitious startups supported by Venture Capital investors. Their ultimate goal is to transform these corporations into so -called scaling and compete on global markets.
But if the governments – from Berlin and Brussels to Ho Chi Minh City – are to find their advantage, I say they need to Follow the model Closer to the Seoul or Tokyo guide than in the Silicon Valley.
South Korean and Japanese decision -makers have long understood that the spread of startup activities shouldn’t be an isolated goal. In our book 2025, Capitalism startupMy colleague Ramon Paczeco Pardo and I revealed that the approach of those countries sees domestic champions corporations akin to Samsung and Toyota, use startups as resources to help them compete in the international arena.
As the head of the startup center supported by the government told me, the key goal of the policy of the South Korean government for startups is “Inject innovative DNA” to large corporations of the country. The rules are trying to set startups in the fabric of foremost corporations and do not try to disturb their competitive positions.
Wayne Miller / Magnum photos
For this purpose, the Silicon Valley handbook is not optimal. US government policy has Venture capital turned on investments through regulatory changes and assured that they are talented challenge Their former employers. Classic examples include the so -called “treacherous eight”, which he left Shockley Semiconductor Laboratory in 1957 to find Fairchild semiconductor.
A more moderen example is Anthony Levandowski, who left the Google automotive design to arrange his own company, Otto, in 2016. The competition was so close that Google sued Uber -As the Otto-W 2019 purchased in connection with the business secrets, Levandowski allegedly used trucks to develop his own company. Uber finally paid Google “a significant part” 179 million USD (134 million kilos). Initially, arbitration was awarded.
Injection of revolutionary DNA
The Japanese and Korean formula is clear. South Korea 17 Focuses on a creative economy and innovationEstablished about ten years ago to increase innovation and entrepreneurship, each of them has one of the large corporations () as an anchor partner. Industrial concentration – no matter whether it is a shipyard, electronics or heavy machines – is reflected in the concentration of startups involved in this center.
Startups are working on issues “which keep a large company at night”, and in exchange the startups have unparalleled access to distribution channels, marketing and testing of conceptual evidence. While the centers have not developed the amounts of worldwide competitive scale, they provided the purpose of introducing revolutionary ideas and talents to large corporations akin to Hyundai, LG Electronics and SK Group.
In Japan, tax encourages are encouraged by large corporations to buy startups. . “Open tax encouragement” Allows the deduction of 25% from the acquisition price. The goal here is to encourage Japanese domestic corporations to integrate startups with the foremost corporations. For example, in 2024 Whatin the offer of mobility services.
Various government initiatives are also aimed at ensuring coaching and mentoring for startups related to obtaining enterprise capital funds and sharpening the pitch for the DEMO day. In Japan and Korea, these initiatives set a great business.
IN J-StartupInitiative aimed at creating a cohort of so -called unicorns (startups price over USD 1 billion), the Japanese government engages industrial leaders as judges who help chosen candidates in the program. These people then act as trainers and mentors of startups. Leading Japanese corporations are in return exposed to revolutionary technologies and startup culture.
Korea in a similar way K-Startup Grand Challenge It connects participating foreign startups with the country to develop a confirmation of the concept. The Korean government cites partnership and license agreements between the parties as necessary result program. Thanks to these connections, large corporations of Korea have one other mechanism for access to revolutionary ideas and talents from abroad.
Sybillla / Shutterstock
Governments that want to compete with China or the USA cannot proceed their existing path. They have to do something different, and the approach of Japan and South Korea are an alternative.
These approaches are not devoid of flaws. There is, after all “Kill Strees” Around their business lines. This may include early connections and acquisitions of low value, and even copying their products to eliminate them.
The foremost position of huge corporations in the economy also implies that the startup innovation program is set by current corporations. This promotes complementary products, not people who disturb – and eventually improve – domestic corporations or technologies. There is also a worry of perceived corruption.
However, I say that the implementation of the strategy semi -controlled is more dangerous. If the governments keep the wall between large business and startups, considering that it is vital to minimize corruption and that enormous corporations will introduce innovations, just as startups will grow into larger corporations, risk disappointing results at all levels.
We can see how they wave the performance in the sectors where the countries are perfect. And scaling can’t be materialized while populations “Zombie startups”It is simply stagnation when it is based on state generosity, it increases.
Startups ought to be considered resources to increase the national industrial capabilities, not efforts to sow the country’s response to Google or OpenAi in the Silicon Valley.