The South Korean government has announced new regulations requiring at least 8% of the total procurement budget to be spent on products or services from startups.
This KRW 27 million (approx. USD 23 billion) public market, exclusively for startups, is scheduled to open this year.
Until now, no regulations required the public sector to buy from startups.
However, the Ministry of SMEs and Startups (MSS) recently issued an implementing decree and regulation supporting the SMEs and Startups Promotion Law.
This follows a vote by the State Council to revise the law to support startups.
According to government officials, public procurement will support startups by providing them with revenue, serving as a testing environment, and helping them survive.
With public sector budgets rising, the market is expected to grow to KRW 30 billion (about $25 billion).
To increase startup opportunities, the Korean government is revising regulations to define a startup better.
Under current rules, companies that relaunched similar products or acquired and developed new products are not considered startups.
To address these issues, MSS is revising the categorization process and expanding the definition of a startup to include.
