Creative Economy Action Plan and Measures to Establish a Creative Economy Ecosystem

The Park Geun-hye Administration’s Creative Economy Blueprint, Creative Economy Action Plan and Measures to Establish a Creative Economic Ecosystem

Prime Minister Chung Hong-won hosted the Cabinet meeting on June 4. At the meeting, the ‘Creative Economy Action Plan and Measures to Establish a Creative Economic Ecosystem’ (henceforth to be called the ‘Creative Economy Action Plan’) were confirmed.

Background and Need for Drawing Up the Creative Economy Action Plan

The Korean economy has reached the limits of its ‘catch-up type strategy,’ which had driven economic growth for the last 40 years, due to the global economic crises and pursuit from emerging industrial economies.

The global economy is moving away from labor and capital (industrial economy), and knowledge and information (knowledge economy), to ‘innovation, technology and creative ideas (creative economy).’

Korea’s economic management paradigm also arose as pursuit-type growth through imitation and application, and the government is now working to switch the Korean economic paradigm to that of the leading-type growth founded on Korean creativity. In order to reach this goal, the government has drawn up the Creative Economy Action Plan, a Korean creative economy promotion strategy that utilizes Korea’s science, technology and information and communications technology (ICT) capacity, all of which are Korean strengths. The Creative Economy Action Plan proposes both a vision and goals for transforming into a creative economy. Each ministry was given tasks at the end of March to turn the vision of a creative economy into a reality. The Creative Economy Action Plan reflects the government’s efforts to collect opinions and receive suggestions regarding government tasks by The Federation of Korean Industries, The Korea Chamber of Commerce, the Korea Federation of Small and Medium Business, the Korea Trade-Investment Promotion Agency, the Korea Employers Federation, and the Korea Venture Business Association.

3 Goals, 6 Strategies, 24 Tasks

The Creative Economy Action Plan establishes a vision for ‘Realizing a New Era of Happiness for the Korean People through a creative economy’ in order to create a creative economy ecosystem. The government has set 3 goals:

1)      Create new jobs and markets through creativity and innovation,
2)      Strengthen Korea’s global leadership through a creative economy
3)      Creating a society where creativity is respected and manifested

The government has also proposed 6 strategies:

1)      Properly compensate for creativity and create an ecosystem that promotes the creation of startups
2)      Strengthen the role of ventures and small and medium-sized enterprises (SMEs) in the creative economy and strengthen their ability to enter global markets
3)      Create growth engines to pioneer new markets and new industries
4)      Foster global creative talent that has the spirit to rise to challenges and pursue dreams
5)      Strengthen the innovation capacity of science, technology and ICT, which form the foundation for the creative economy
6)      Promote a creative economic culture together with the Korean people

Each strategy is accompanied by 3-5 tasks
  
1. Properly Compensate for Creativity and Create an Ecosystem that Promotes the Creation of Startups

Create the Conditions to Easily Start New Businesses through Investment, not Financing

Financing pools will be reduced and investment pools will be increased in order to encourage investment in startups. No matter the person, if somebody comes up with a good idea, they will be able to easily start their business. Conditions will be created such that should one’s business fail in good faith, they will still be able to start another new business.

The Ministry of Strategy and Finance released the ‘Measures for a Venture-Startup Funding Ecosystem’ on May 15, which includes measures that fit into the Creative Economy Action Plan. The change in the structure of startup enterprise funding is centered on moving away from financing and towards investment. Angel investment is being stimulated, crowd funding is being institutionalized and the Future Creation Fund (500 billion won) will be created. Venture-startup ecosystem infrastructure is being expanded. Startup platforms are being diversified, mentoring is being strengthened and the environment for starting a new business (after failing in one’s first endeavor) is being improved.

Patenting Creative Ideas

The government will develop a ‘Country Patent Strategy Blueprint’ in order to secure patents for creative ideas that have high marketability, and will construct a mediation and proliferation system that will organically connect patents with standards and R&D. There will be financing support based on a value evaluation by type for intellectual property (IP), including patenting IP. In the case that corporations introduce employee invention compensation systems, those corporations will be able to receive institutional incentives.

2. Strengthen the Role of Ventures and SMEs in the Creative Economy and Strengthen their Ability to Enter Global Markets

The Government and Public Institutions Will Become the Number One Customer to Support the Pioneering of New Markets

Enterprises that produce promising future industrial products, such as convergence products and materials, will be given the opportunity to enter public procurement markets through excellent procurement goods selection systems. Products that are purchased through government procurement will be registered to a government-sponsored online shopping mall and will be able to be publicized.

Easing Regulations and Increasing Government Support to Stimulate Investment

Private investors who withdraw their investments will be able to boldly invest in ventures and SMEs without fear through the easing of stock market (KOSDAQ, KONEX) and M&A-related regulations. Government support for ventures and SMEs will be increased, and businesses will have various opportunities to receive funding support.

According to the ‘Measures for a Venture-Startup Funding Ecosystem,’ the KONEX market opened for ventures and SMEs, KOSDAQ listing and management systems were improved and M&A-related tax reductions and exemptions were modified. Also, the ‘Growth Ladder Fund’ was introduced, post office financial funds are being used to invest in ventures, and M&A-related funds have been introduced.

Setting the Goal of Startup Growth by Accessing Global Markets

It will be possible for promising startups to enter global markets through the consultation with domestic centers (such as the Global Startup Support Center). These startups will be able to receive localization support through overseas support centers and networks.

Creating an Ecosystem that Encourages Cooperation and Win-Wins between SMEs and Large Corporations

The government plans to encourage the proliferation of a business culture that fairly distributes and cooperates in order to create outcomes that help both SMEs and large corporations through an outcome sharing system.*

* Outcome sharing system: Large corporations and SMEs will agree to share outcomes and goals through a preliminary contract. Should outcomes arise, those outcomes (cash compensation, long-term contracts, joint patents, etc.) must be shared according to the contract.

The government expects that there will be active participation in production cost reducing joint cooperation projects* in order to prevent unfair pricing in advance.

* Large corporations and SMEs will form a consortium to cooperate in order to achieve their common goal of securing global price competitiveness.

Constructing a System that Connects Demand, Education and Recruitment to Resolve Human Resources Shortages

Venture and SME-related organizations, local governments, education and training institutes, and corporations will mutually cooperate in order to perform a preliminary investigation that matches ventures and SMEs, which are suffering from human resources shortages, with the required manpower, to provide education/training services, and to construct a joint human resources management system to connect venture and SMEs with those seeking employment.

3. Create Growth Engines to Pioneer New Markets and New Industries

Combining Science, Technology and ICT to Energize Existing Industries

Major industries will raise their competitiveness through joint public-private next-generation materials and product development and IT convergence innovation centers. Industries that were traditionally strong but are now lagging will improve their added value and productivity by expanding management systems based on IT, developing clean energy, and expanding simple smart phone payments for traditional markets. The government will take the lead on plans to sophisticate land and industry infrastructure, such as LTE systems for railroads and smart, automated driving.

Creating New Industry Based on Software and Internet

Software education will be strengthened and a cluster will be created that connects regional specialized industries with software convergence. The government will also promote software convergence technology development and the establishment of a software policy lab. The foundation will be built to foster new internet industries through the enactment of the ‘Cloud Computing Development Act’ and the construction of the ‘Big Data Analysis and Utilization Center.’ Over 5,000 people will be trained as security professionals by 2017, and Korea will be transformed from ‘a nation of security troubles to a secure nation.’

* Comprehensive measures for information protection industry advancement will be announced this June.

The ‘Dignified Korea Contents Fund’ and the ‘Korea Digital Contents Fund’ (400 billion won) will be created to support the contents industry. The government will foster 5 ‘killer contents*’ and digital contents that Korea are strong points for Korea into next-generation contents industries.

* Music, movies, games, animation, and musicals

Creating New Markets through Human-Oriented Technology Innovation

First, inconveniences and problems related to daily life, such as the environment, welfare, and safety, will be discovered, and R&D will be promoted to make improvements. Those improvements will be transferred to the private sector to create new services and markets. Government-level strategies will be prepared that target social systems and structures innovation and covers science, technology and ICT, and cultural system improvements. (‘C-Korea Project’)

* This includes the ‘5 Cs’ of science, technology and ICT ‘Convergence,’ the ‘Connection’ between technology, the humanities and society, public-private ‘Collaboration’ and social system ‘Conversion.’

Pioneering New Markets by Discovering and Fostering New Promising Future Industries

The government will support the development of promising sectors, such as the biomedical technology, nanotechnology, and environmental sectors, including genome analysis and treatment technologies, graphene displays and Carbon Capture and Sequestration (CCS). The government will focus its support on investing in large-scale national strategic industries, such as advanced reactor and mid-sized satellite exports and unmanned drone development. Promising new industries and businesses will be discovered through long-term future predictions in order to secure leading core technologies.

Promoting Market Creation and Industry Convergence through Regulation Rationalization

The government will actively pay attention to demand and difficulties of businesses in order to promote market creation and industry convergence. All ministries plan to work together to make these improvements. The government has discovered system improvements, including the 3 strikes copyright policy, through meetings with 7 private sector federations in April.

4. Foster Global Creative Talent that Has the Spirit to Rise to Challenges and Pursue Dreams

Strengthening the Development of Creative Convergence Talent

Elementary and middle school students will be exposed to convergence experiences and research education textbooks for math, science, technology, engineering, and art. University students will have access to a broad range of information outside their major through convergence classes and convergence departments. The government will introduce and promote the spread of the ‘Spec Transcendence Recruitment System,’ a system for students preparing to enter the workforce that will not waste time and money on unnecessary specializations and will promote the absorption of creativity capacity development.

* The ‘job competency evaluation model’ will be developed in order to support businesses that are struggling with difficulties related to finding the proper talent because outside of academic background and specializations, there are no proper evaluation standards. The ‘Spec Transcendence Mentor School’ that supports employment following the selection and professional mentoring of youth talent, will be established in June.

Saving the Challenging and Entrepreneurial Spirit

Special after school activities and weekend programs will be utilized, and a ‘technology startup camp’ that provides career experience and mock startup competitions will be operated. Support will be expanded for youth and university student startup clubs. Successful venture entrepreneurs will visit and introduce students to the challenge of starting a business in order to give students the courage to strive for new frontiers. (One-on-One Mentoring)

Stimulating the Overseas Advancement and Domestic Inflow of Creative Talent

The newly created ‘K-Move Portal’* and the ‘Government Foreign Internship Program’** will be utilized for young adults who dream of working on a global stage, and these students will be able to get real experience working on overseas industrial sites and will learn to think in global terms.

* The K-Move Portal integrates and supplies localized job information through the KOTRA network
** 7 ministries (this includes the Ministry of Education, the Ministry of Trade, Industry and Energy, the Ministry of Gender Equality and Family, the Ministry of Agriculture, Food and Rural Affairs, the ministry of Culture, Sports and Tourism, the Ministry of Land, Infrastructure and Transport, and the Small and Medium Business Administration) are supervising 13 projects that dispatch 2,620 people. 

Foreigners possessing excellent technologies will be able to receive the newly created ‘(tentatively named) Startup Visa’ to enter Korea and smoothly start a new business. Conditions for settling in Korea for foreign talent, such as shelter, medical care, and education will be improved, and support will be offered to help 300 researchers out of the top 1 percent of researchers settle in at the International Science and Business Belt.

5. Strengthen the Innovation Capacity of Science, Technology and ICT, which Form the Foundation for the Creative Economy

Creating an Autonomous and Challenging Research Environment and Supporting the Commercialization of Research Outcomes.

Government investment in basic research, a part of government R&D investment, will be increased by 40 percent by 2017, and the government is working on ‘Future Challenge Adventure Research Projects’ (2nd half of 2013) in order to offer the opportunity to creative young researchers to make their creative ideas a reality. The government is also working on the ‘Research Outcomes Commercialization Support Project’ (2nd half 2013) that will offer support for researchers to take their research results, plan a business model, work in R&D incubators and commercialize the results.

Pioneering Next-Generation Markets by Strengthening ICT Innovation Capacity

Promising future technologies from the C-P-N-D sectors, such as 5G mobile communications and realistic media will be selected and developed. Next-generation networking industries will be fostered, such as next-generation Wi-Fi and 10Gbps internet and will be targeted at overseas markets.

Stimulating the Regional Economy and Strengthening the Commercialization Function and Regional Innovation of Universities

Technology planning and management organizations will be created for each region in order to strengthen local government’s technological management capacity while taking into account the special circumstances of each region in order to construct regional innovation clusters.

Solving International Social Problems through Korean Science, Technology and ICT in Order to Raise Korea’s Status

‘Science Technology Innovation Centers’ will be established in major emerging nations to connect local startups and the commercialization of optimal technologies that emerging nations require.

6. Create a Creative Economic Culture Together with the Korean People

Creating a Creative Culture that Realizes Creativity and Imagination

In the second half of this year the government will host the ‘Creative Economy Expo,’ for Koreans to come in contact with examples of creative economic success and a culture of challenging and open-mindedness. Support will be offered for regular people with excellent ideas to get those ideas patented through the ‘1 Household 1 Intellectual Property Movement.’ ‘Infinite Imagination Rooms’ will be installed in science museums, post offices, and libraries. After managing 5 demonstration sites, these rooms will be installed throughout the entire country. Anybody, including students, will be able to visit these ‘Infinite Imagination Rooms’ in order to foster their ideas and receive mentoring from professionals that can connect their ideas with startups. The government will host ‘Idea Festivals,’ which will create a social atmosphere where anybody can actively propose their imaginative and creative ideas, and support will be given to promote the commercialization of excellent ideas. The government constructed and manages ‘Creative Korea,’ an online portal. Through this portal, any Korean citizen will be able to easily access the creative economy, and receive comprehensive support in order to take a good idea, commercialize it, and start a new business.

Fusing Korean Ideas with Public Resources through Government 3.0

Data that the government possesses will be made public, including bus service information, and learning materials in order to create various business models that will utilize the government’s data in the private sector. The government is working to enact the ‘Public Information Supply and Use Stimulation Act’ in order to support these goals.

Innovating Government Working Methods in order to Realize a Creative Economy

The government will construct the ‘Integrated Government Communication System’ that will make possible communication and cooperation through video conferencing and materials distribution for each administrative agency. The integrated government center will be transformed into a cloud computing center, and the ‘National Future Strategy Center’ will be established in 2015 to utilize policy decisions made from comprehensive analyses of big data.

Creative Economy System

Centering the Creative Economy on the Private Sector, not the Government

The government will meet with private sector economic organizations in the high level ‘Creative Economy Public-Private Conference’ and the ‘Working-level Conference’ in order to construct private sector led communication and cooperation systems.