The Korean government has made fostering a “creative economy” a top priority. The goal is to shift
Korea's economic paradigm to one based on innovation in which new start-ups and venture businesses play
a key role. However, the venture capital market is still at an early stage of development. To make venture
investment a growth driver, it is important to expand the role of business angels, activate the merger-andacquisition
market and foster entrepreneurship. A creative economy also depends on making SMEs, which
account for 87% of employment, more dynamic. The productivity gap between large firms and SMEs,
which benefit from a wide range of public support, is widening. SME policies should be streamlined and
improved to promote market-based financing and reduce the negative effects of government funding
programmes, which discourage the expansion of SMEs.
