South Korea's Startup Ecosystem Achieves 12th Globally, 4th in Asia

Korean Startups, 'Warning Light' in AI Transition Despite Excellent Policies While Korea ranked 12th in the global startup ecosystem (2025 APEXE report), indicating a strong performance, a warning has been sounded about the urgent need for proactive responses to the transition to the AI era. Particularly in Asia, Korea ranked 4th, following Singapore, India, and China, showing an increasingly competitive landscape. This report, published by Startup Genome, evaluated the actual performance of each country against its 'innovation potential' through a fair comparison that considered population and GDP. Notably, in the policy evaluation targeting G20 countries, Korea ranked 3rd (7.6 points) after France and Australia, demonstrating its excellent support system. Specifically, it showed strength in funding and programs, but talent was pointed out as a relative weakness. This higher policy score compared to major competitors like the U.S., China, and Japan suggests systematic support efforts. However, the report expressed concern about Korea's response as the current startup ecosystem rapidly transforms into the 'AI era'. The WEF and OECD warn that AI will replace over 20% of jobs worldwide, and most new high-value-added jobs will be concentrated in the U.S. and China. While governments worldwide emphasize that investing in their domestic AI startups is effective for creating high-value-added jobs, Seoul's investment share in AI-native startups was significantly lower compared to major cities such as Silicon Valley, London, and Beijing. This implies that Korea could fall behind in fostering innovative companies centered on AI. The report cited examples of countries like Korea, Taiwan, Singapore, and Israel, which achieved economic leaps through proactive action during past technological transitions like the computer era, emphasizing the importance of decisive investment in the current era of 'thinking computers'. Indeed, just as Paris achieved a 50-fold return on AI investments, the analysis suggests that bold actions, rather than just investments within current capabilities, will dictate future growth. Startup Genome stated that establishing an AI policy framework to be reflected in the 2026 budget is urgent and proposed cooperation with key ecosystem policymakers. With its excellent policy foundation and top-tier ecosystem, it remains to be seen what strategy Korea will adopt to lead innovation during the AI transition, and the future direction of its economy is under close watch.