Dear Foreign Investors, You’re Not Welcomed Here. Love, Korea

Where’s My Foot? I Wanna Shoot It
Private equity investors, who have capital that can provide startup capital and knowledge, should be very active in Korea. Smart, highly educated people, and very picky customers who are technologically savvy. When you add in a highly regarded art scene and fashion industry, you have a combination of people along with society which makes Korea a logical incubator for all types of new companies. It is true that many local shops exist, and new applications for both the Android and Apple operating systems originate in Korea. However, the successes are limited, and more frustratingly, the platform for the systematic development of multiple startup companies does not exist. Some of the factors are described here in a previously written post. The problem with this objection? It hurts Koreans, and especially the educated, and massively underemployed college graduate and young adult population. When coupled with the surge in unemployment by college graduates in Korea, you end up with an inexplicable situation.

Korea Richly Deserves Its Reputation of Hostility
On an individual basis, native Koreans can be kind to foreigners visiting and/or living in Korea. There are numerous blogs and tweets that exist in the blogosphere that will state all sorts of opinions on various aspects of Korean life. Many of the blogs are written by teachers who are temporarily living in Korea while teaching English to knowledge-ravenous students (whether or not it is self-induced hunger may the topic of some debate). That said, Korean society as a whole does not welcome foreign investors for a variety of reasons. At a time and a situation where private equity investors should be welcomed into Korea, they are not. Foreign investors of all sizes are similarly treated. On this Financial Times blog, Beyond Brics, the attitude has made news. Here is a link to a story that is disheartening, not because it isn’t true, but because it is true.

Incubators as a Solution
In other advanced economies, incubators exist which provide initial support for new companies. Legal and accounting support are provided, along with managerial experience. The communication with eventual, permanent investors is also facilitated to those who have little experience in these matters. Communication, of course, is a two-way street. Young Koreans must do their part by searching for these opportunities. They don’t just present themselves magically. Perhaps if young, entrepreneurial Koreans actively search for these opportunities, then some of the attitudes that currently exist can be overcome.