Innovators say that autonomy is the key to innovation

An Israeli entrepreneurship expert said that the key to nurturing start-ups is to allow a certain level of autonomy instead of churning out subsidies.

Ami Appelbaum, chairman of Israel Innovation Authority, speaks during the International Symposium on 'Korea, the Country of Innovation and Start-ups,' held Tuesday at the SNU in Gwanak District, southern Seoul. [KIM SANG-SEON]

An Israeli entrepreneurship expert said that the key to nurturing start-ups is to allow a certain level of autonomy instead of churning out subsidies.

“We even out the investment through detail programs," said Ami Appelbaum, chairman of the Israel Innovation Authority during a forum co-hosted by the JoongAng Ilbo, KAIST and Seoul National University (SNU). The first International Symposium on 'Korea, the Country of Innovation and Start-ups' was held on Tuesday at the SNU campus in southern Seoul.

“For example, if the government aids a company 50 percent, it makes the company to itself raise the half.”

“In that way, we can prevent start-ups from abusing government support.”

Such an approach helped the country become home to many successful start-ups.

“Israel is now called a Start-up Nation, and the ‘necessity’ was the most important key behind that,” Appelbaum said during his speech.

“If a country lacks natural resources, it should think out of the box and develop solar power to gain electricity,” he added. “Necessity is the mother of all invention.”

Israel has only a 9 million population, which is less than Seoul. It lacks resources and is geographically disadvantaged due to conflicts with neighboring countries, he said.

But Israel is home to more than 100 Nasdaq-listed companies, third only to the United States and China.

Israel is the No. 1 country in the world in terms of the amount of money spent in research and development (R&D).

Israel used about 5.4 percent of its GDP for R&D in 2020, according to data from the OECD. Korea was No. 2 with 4.8 percent, while the United States was at 3.5 percent. The OECD average was 2.7 percent.

Scott Stern, professor at the MIT Sloan School of Management, speaks during the International Symposium on 'Korea, the Country of Innovation and Start-ups.' [KIM SANG-SEON]

Scott Stern, a professor at the MIT Sloan School of Management, stressed the importance of relationships with stakeholders.

“In order for a start-up to succeed, three things are important, stakeholders, system and strategies,” Stern said. “But normally, communication between stakeholders does not really work well.”

Since about 10 years ago, MIT has been running a regional entrepreneurship acceleration program (REAP) that allows people around the world to share their stories.

“We made consortium to listen to others more carefully and well,” Stern said. “Everyone should keep asking each other the things needed to make a start-up ecosystem and the reasons their attempts have failed.”

“The surrounding area of the MIT campus was deserted in the 1970s, but now it is the heartland of innovation with various companies,” Stern added.

“This dramatic shift was not made only by the government or a major company, but with the cooperation of many entrepreneurs, students and professors."

The presidents of Korean universities said that Korea should learn from Israel and the United States.

Seoul National University (SNU) President Oh Se-jung speaks during the International Symposium on “Korea, the Country of Innovation and Start-ups,” held Tuesday at the SNU in Gwanak District, southern Seoul. [KIM SANG-SEON]

“Silicon Valley was first formed based on Stanford University’s Research Park,” SNU President Oh Se-jung said. “Lots of innovations are made in the Silicon Valley now, and even if they are emerged outside of the area, they are all centered on the area.”

“The Rust Belt, which was once the heart of the U.S. steel manufacturing industry, is no longer a heartland,” Oh added. “But it is reviving as the Robot Belt, with lots of research on robots being conducted at Carnegie Mellon University and Pittsburgh University.”

“Innovation and start-ups are the trends of the times, and the way to strengthen national competitiveness in the accelerating global competition for technological superiority,” SNU’s Oh said during his speech during the symposium.

“Innovative start-ups are the only way for Korea to be a first mover in the global technology competition,” Oh added. “Universities, the government and the private sector must cooperate to form an ecosystem to support fostering innovate start-ups.”

SNU and KAIST are the front runners.

“Korea is home to some 30 unicorn companies, and of them, 30 percent were founded by people who graduated from the Seoul National University,” said Oh.

Unicorns are start-ups that have such promise that they are valued at $1 billion or more. Lee Seung-gun, CEO of Viva Republic, operator of Toss, Bang Si-hyuk, chairman of HYBE, the agency of BTS, and Ahn Sung-woo, founder of Zigbang, are SNU graduates.

SNU has been forming a Gwanak S Valley in Gwanak District to help students to found a company and start their business. A total of 13 centers have been opened, in which 112 new start-ups are headquartered with 711 employees.

Of them, 14 companies went public.

KAIST President Lee Kwang-hyung speaks during the International Symposium on “Korea, the Country of Innovation and Start-ups,” held Tuesday at the SNU in Gwanak District, southern Seoul. [KIM SANG-SEON]

KAIST has been pushing hard for a “1 Lab, 1 Start-up” program, which requires all professors, or students at their labs, to start a start-up.

“One of the biggest reasons why universities should support start-ups is that we should be more independent financially,” KAIST President Lee Kwang-hyung said. “KAIST and SNU are public companies so we receive money from the government every year. But it’s not like we can just rely on that budget.”

“KAIST supports professors and students to start businesses, and connects them to some major companies who have interest,” Lee added. “If they succeed, they pay back to the school. This virtuous circle is what I consider an ideal image of a university.”

Lee said he abandoned many unnecessary guidelines and policies to break barriers for people to start a business.

“Some students complained about the policy that the school only allows two-year leave of absence for people who wish to start a start-up,” Lee said. “So I abolished them.”

“There was also a policy that reduces wages of professors if they are engaged to start-ups,” Lee added. “I dropped that rule as well, for more professors to be encouraged.”

At KIAST, people need some six months to start a start-up, and it has been shortened that to two months.

Only 58 start-ups were founded in 2020 in KAIST. But that number jumped to 75 in 2021, and 74 in 2022 as of November.

“Our goal is to earn some 100 billion won [$78 million] for inking technology deals with major companies by the next 10 years.”

BY SARAH CHEA [chea.sarah@joongang.co.kr]