South Korea is embarking on a major policy shift to foster a ‘national startup era,’ aiming to make entrepreneurship the core engine of economic growth. The government recognizes the entrenched ‘K-shaped’ growth structure, where benefits concentrate in large corporations and metropolitan areas, and seeks to address this imbalance. The new policy, led by President Lee Jae-myung and announced at the National Startup Era Strategy Meeting on January 30, 2026, prioritizes creating jobs through startups rather than traditional employment. The strategy includes comprehensive support from startup entry to growth and re-challenge, with the government acting as a partner to share risks.
The centerpiece of this initiative is the ‘Modoo Startup Project,’ a nationwide audition-style program open to anyone with an idea. The project will select 5,000 participants—4,000 in tech and 1,000 in local fields—with over 70% from non-metropolitan regions. Each participant receives KRW 200,000 for startup activities, and top candidates can access up to KRW 100 million in funding. The program is supported by over 100 incubators and 500 mentor entrepreneurs, with a dedicated platform (www.modoo.or.kr) for applications and collaboration. The government also plans to establish a KRW 50 billion ‘Startup Wind Fund’ for selected entrepreneurs.
Implementation began with the Modoo Startup Project’s launch on March 26, 2026, and applications are open until May 15, 2026. Additional policies target tech startups in defense and biotech, aiming to foster 100 defense startups and achieve KRW 30 trillion in biotech technology exports by 2030. Local startup support includes discovering 10,000 entrepreneurs annually and creating specialized commercial zones, with most beneficiaries from regional areas. The government is also reforming the startup competition landscape, launching the ‘K-Startup of the Year 2026’ with 12 leagues and major prizes.
Frequently asked questions include: Who can apply for the Modoo Startup Project? Anyone with an idea can participate, with simplified paperwork focused on the idea itself. What support is available for failed startups? The government offers a KRW 1 trillion re-challenge fund, issues ‘challenge career certificates,’ and provides preferential treatment for future programs. How does the policy address regional imbalance? Over 70% of selected entrepreneurs are from non-metropolitan areas, and most incubators and mentors are being encouraged to expand outside Seoul.
South Korea’s new startup policy represents a bold move to reshape the country’s economic landscape by prioritizing entrepreneurship. The Modoo Startup Project’s focus on inclusivity, regional balance, and risk-sharing is a notable departure from previous support models. The government’s commitment to funding, mentorship, and ecosystem reform, including support for failed startups, demonstrates a comprehensive approach. Success will depend on addressing practical challenges such as regulatory barriers and ensuring that regional entrepreneurs have access to resources and networks. The policy’s impact will be measured by its ability to foster real growth and innovation across the country.