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Location and Employment Characteristics Features of Technology-based Start-ups and Policy Implications

Author Kim, Jeonghong & Jeong, Yoonseon Date 2015.03.24 Issue No 608
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A technology-based start-up is defined as an independent company less than five years old that has more intangible assets or higher R&D intensity than the  population averages.


● According to the analysis of Statistics Korea’s 2010 Economic Census, R&D investment and intangible assets of technology-based start-ups account for 2.19% and 3.25% of their capital respectively. A total of 9,723 technology-based start-ups, or about 10% of the total 93,797 start-ups, meet these two requirements.
● With the ratio of R&D investment or intangible assets to capital almost zero, the rest 90% start-ups started their businesses relying on some tangible assets and manpower without technological preparations. Technology-based start-ups have a significantly higher total employment growth rate than other start-ups, and the increase rate of the number of regular employees is also about twice as high. As for the geographic distribution of technology-based start-ups, about two thirds are located in the capital region particularly in Seoul and Gyeonggi Province. Various measures including startup support and technology commercialization are necessary to attract technology-based start-ups to non-capital region and create more jobs in the non-capital region..
● In particular, it is necessary to establish “Regional Technology-based Start-up Support Council” (tentatively named) as a platform to create the technology-based start-up ecosystem.
● It is also needed to carry out “Technology-based Start-up Support Program” (tentatively named) to promote  technology-based start-ups in the non-capital region.