South Korea is facing economic polarization, with only select industries and groups benefiting from recovery while many remain stagnant. President Lee Jae-myung has highlighted the need to overcome ‘K-shaped growth’ by fostering startups and venture companies as engines for ‘growth for all.’ The government sees startup activation as central to job creation, youth policy, regional balance, and national growth strategy. This approach is backed by strong performance data from the domestic venture sector, which now rivals major conglomerates in revenue and employment.
The policy impacts entrepreneurs, youth, small businesses, and regional economies. According to the Ministry of SMEs and Startups, there are 38,216 certified venture companies in Korea as of 2024, with total sales reaching 236 trillion won. These companies employ over 828,378 people, surpassing the workforce of Korea’s four largest conglomerates. Korean startups also demonstrated global competitiveness at CES 2026, winning 206 innovation awards and securing significant business deals, especially in AI and deep tech.
Implementation began with the announcement of a 4.4 trillion won venture fund in January 2026, led by the Ministry of SMEs and Startups in partnership with the Ministry of Culture, Sports and Tourism, the Ministry of Oceans and Fisheries, and Korea Venture Investment. Of this, 2.1 trillion won will be government-funded to stimulate private investment, with 1.3 trillion won focused on AI and deep tech unicorns. The initiative includes expanding regional growth funds, activating secondary and M&A funds, and broadening support for early-stage, youth, women, and impact startups.
Frequently asked questions include: What is the main goal of the venture fund? The fund aims to accelerate startup growth, foster innovation, and address economic disparities. How will startups benefit? Startups will gain access to increased funding, business opportunities, and targeted support in advanced technology fields. What sectors are prioritized? AI, deep tech, and regional innovation are key focus areas. The government is also enhancing the venture investment ecosystem through new global funds and expanded support for diverse startup groups.
South Korea’s venture fund initiative is a significant step toward addressing economic disparities and promoting innovation. The government’s focus on startups and advanced technology sectors, backed by substantial funding and cross-ministerial collaboration, is likely to accelerate job creation and regional development. The policy’s data-driven approach and international achievements, such as CES 2026 awards, reinforce the country’s growing competitiveness. By expanding support to diverse groups and prioritizing key sectors, South Korea is laying a strong foundation for inclusive and sustainable growth.