JEJU — Kim Jae-won, chairman of the Korea Startup Forum and CEO of Elice Group, said policy should focus on cultivating startups capable of competing in global markets in the era of artificial intelligence. With borderless competition unfolding in new technology fields, he argued, aggressive regulatory reform and a more active capital market are the top priorities.
"Once the market is lost, easing regulations means nothing," Kim said in an interview marking the forum's 10th anniversary, held on the 18th in Hangyeong-myeon on Jeju Special Self-Governing Province. "Proactively removing regulations, not just creating new systems and policies, should be counted among the core achievements of the government and the National Assembly." Launched in 2016 with about 50 startups, the forum has grown into South Korea's largest startup association with more than 2,900 member companies. Kim took office as its fifth chairman in February this year.
More than a decade after startups began calling in unison for regulatory reform, rules remain the biggest obstacle on the ground. "Look at data use in new industries such as AI, autonomous driving and telemedicine — the privacy protection perspective takes precedence over fostering the industry," Kim said. "The 52-hour workweek is likewise a one-size-fits-all rule ill-suited to a startup environment where flexibility is essential." The forum plans to assess the effectiveness of the regulatory sandbox to gauge the government's progress on easing rules.
On taxes and capital markets, Kim stressed the need to build a virtuous cycle that channels capable talent and venture capital into startups. "Thanks to AI, the value a single person can create has grown far larger, but stock options — practically the only tool startups have to attract talent — carry a tax benefit capped at 500 million won," he said. "We need to consider whether that is enough in such a fast-changing era." Under current law, income tax exemptions on gains from exercising stock options at unlisted venture companies are capped at 200 million won a year and 500 million won cumulatively.
Kim also said conditions for running a startup while unlisted have improved as the government made efforts such as creating fund-of-funds programs. "But if the KOSDAQ, which serves as the exit market for venture investment, fails to become more active, it could simply inflate a bubble at the pre-listing stage, so careful policy is needed," he said. Exit options should be diversified beyond initial public offerings to include mergers and acquisitions, he said, while creating an environment that draws long-term institutional investors into the KOSDAQ market.
