The Wall Street Journal recently posted an article on South Korea’s startup scene. While the U.S. startup scene is experiencing a slowdown, South Korea is one place that is experiencing significant growth. The number of funds raised in the U.S. has declined 34% from last year. In contrast, South Korean venture capital firms are experiencing an increase. The number of Korean startups has nearly doubled to 28,193 in 2012 from just 15,401 in 2008.
What does this mean? While the article points to youth unemployment near the end, we wonder otherwise. Does the slight decrease in U.S. venture capital funds and the rapid increase of South Korean venture capital funds indicate a drop in innovation in the U.S.? Or is it possible that this is related to consumer confidence? It could very well be a combination of the two. In South Korea, we see consumer confidence at a level of 104 and trending upward in South Korea, consumer confidence in the U.S. is trending downward at 78. Not to mention all unending cover stories of innovation in America nearing its end.
Clearly there are other factors that make up South Korea’s current success that may have more impact that South Korea’s success itself.
Does South Korea’s startup boom have bigger implications that we think? What other attributes do you think affect South Korea’s startup scene?
-Steve Hogan, Managing Partner, Tech-Rx