The IFEZ and Zhongguancun, China: the Cradles for Innovative Business Startups
At 17 years old, the IFEZ is still just a youngster, really. And yet, this youngster dreams of something new: becoming a hub for innovation by drawing in startup activities. With this goal in mind, the IFEZ has taken lessons from Zhongguancun, China, a place that has already managed to realize this same dream.
Written by Seo Bong-man, Senior Researcher at the Incheon Institute
The IFEZ Heralds in a New Era with Startup Park
Last year, the IFEZ succeeded in inducing ‘Startup Park’ using Tomorrow City as an innovation startup hub for Korean companies. Startup Park draws in investment interest with demonstrations of full-swing product and service development and supports startups’ efforts to make inroads into overseas markets. Its scale is the largest in Korea, with approximately 49,000 of space to accommodate and incubate more than 180 startups focused on bio-convergence, Smart City, Big Data, and AI.
Startup Park will operate Startup Tower, Startup Tower and Healing Tower. Startup Tower is operated by a consortium from the private sector and will house accelerators and venture investors. Startup Tower, operated by Incheon Techno Park, will have the facilities for demonstrations to conduct tests on products and services manufactured by startups. Lastly, in Healing Tower, convenient facilities for residing companies’ employees and citizens will be provided.
Zhongguancun, Motivated by the Enthusiasm to Create New Business
Zhongguancun is often called the ‘Silicon Valley of Asia.’ It is a science and technology complex formed in the establishment of private high-tech companies by individuals with science and technology backgrounds who had been working at public science institutes and high-level education institutions across China. As of now, there are 2.7 million employees from 22,000 companies in the complex, and 30% of them are working in cutting-edge industries. In addition, there are a number of foreign companies and institutes on hand, such as Google and Microsoft.
They play the role of supporting Chinese startups as they penetrate the global market. Approximately 50% of startup funding in China is focused on Zhongguancun, and if a startup is registered in the science and technology management committee at Zhongguancun, more than 10 supporting institutions will provide the services required for startup, such as accounting, human resources management, pilot-product manufacturing, and legal services. Along Zhongguancun’s startup street, there are more than 2,000 venture investors residing. The place is crowded with talented graduates from more than 40 universities, including Peking University and Tsinghua University, 26 university science and technology institutes, and foreign student startup complexes.
Based on the case study on Zhongguancun, the strategies for the IFEZ’s Startup Park are focused on demonstrations, while investment for the global penetration of startup companies is significant. Lastly, here are three recommendations. First, efforts to upgrade the startup ecosystem in Incheon, which have focused on support for startups in the initial stage, should be made continuously. Second, in order to enable private accelerators and venture investment institutions to sufficiently carry out their own roles, the public sector, including the IFEZ and Incheon Techno Park, needs to assist them. Third, active opportunities must be provided through Startup Park, so that startups can communicate with various overseas startup founders and investors. In this new era under a global pandemic, there are high expectations for the future of the young IFEZ. At 17 years old, the IFEZ is still growing and represents great potential — even under the circumstances of internal and external crises!