Seoul world's 10th best city for startups: survey

Seoul is the 10th best city in the world for venture companies, according to Startup Genome's survey this year. Gettyimagesbank

City's robust support for foreign firms contributed to the highest-ever rank

By Ko Dong-hwan

A survey by a U.S. think-tank has named Seoul as the world's 10th best city for startups. The survey results are based on a comparison of 280 cities in 100 countries.

Startup Genome, a private agency that has been releasing the annual report since 2012, unveiled "Global Startup Ecosystem Report 2022" during "London Tech Week" on June 14.

The survey assessed candidate cities based on funding, knowledge, performance, connectedness, experience and talent, and market reach, then scored each category on a scale of 10. Performance accounted for 30 percent of the overall score, followed by funding (25 percent), experience and talent (20 percent), market reach (15 percent), connectedness (5 percent) and knowledge (5 percent).

Based on a total score of 43 out of 60, Seoul has an "ecosystem value" worth 223 trillion won ($177 billion), according to Startup Genome.

Seoul in 2019 ranked below the top 30 in the survey, but jumped to 20 in 2020 and 16 in 2021.

Out of the six assessment categories, the survey graded Seoul the highest nine points in "funding." The Seoul Metropolitan Government said it introduced in 2018 the "future innovative growth fund" and has been in the process of investing 2.9 trillion won from the fund to local private startups ever since. The city government said it will keep expanding the fund by introducing more business-friendly policies.

"Our goal is creating 2,000 new startups and matching them to 200 medium- and large-size companies by 2024," the city government said.

Five large-scale exits (of invested capital), including Coupang, have greatly contributed to increasing the city's ecosystem value from 54 trillion won last year to 223 trillion won this year, according to the government. A boost in investment in the early stages of startups also helped the city grab the top spot in "funding" among Asian candidate cities and beating Beijing and Tokyo.

The government also launched in February this year "Invest Seoul," a program dedicated to promoting investment in the city for foreign firms. From market analysis to startup launch, investment promotion and stabilized settlement in the city, the specialized division offered an "all-in-one" package to startups, the government said.

Under the city's robust startup-friendly blueprint, Yeouido has become a hub for fintech-related startups, while Hongneung in Dongdaemun District boomed with biomedical startups and Yangjae in Gangnam District stood out with startups specializing in artificial intelligence (AI). Some 13,000 startups have been created in these regions, according to the city government.

The survey selected AI, big data, analytics, life sciences, advanced manufacturing and robotics as rising industrial sectors among the startups in Seoul. The government plans to designate "Yangjae AI District" as a specialized growth zone until 2023 and expand a "bio-cluster" from Hongneung to Changdong in Dobong District, Sanggye in Nowon District and Magok in Gangseo District. A "robot-cluster" will nest in Suseo in Gangnam as the city is currently testing autonomous delivery robots along Teheran Road and in the vicinity of COEX exhibition center in southern Seoul until November 2023.

Seoul Mayor Oh Se-hoon waves in a self-driving electric taxi on Teheran Road in the city's Gangnam District, June 9. The city is currently testing a service called "Roboride." Courtesy of Seoul Metropolitan Government

According to "Seoul Vision 2030" introduced by the metropolitan government earlier this year, the city designated G-Valley (Guro in Guro District and Gasan in Geumcheon District), Magok, Yangjae, Hongneung, Changdong-Sanggye, Y-Valley (Yongsan electronic appliances shopping district), Yeouido and Suseo as regional clusters to lead the city's innovative industries. Dongdaemun, Sangam Digital Media City (DMC) in Mapo District and Jamsil in Songpa District will spearhead the city's culture and tourism industries, according to the plan.

"Seoul's entry into the top 10 is the result of the city's steadfast efforts to accommodate startup-friendly environments and create a unique ecosystem where entrepreneurs from various fields can cooperate and grow together," Hwang Bo-yeon, chief of the Economic Policy Office under the city government, said.

To become one of the top 5 global economic cities by 2030, Hwang said the city aims to breed at least 40 unicorn companies by nurturing workers, promoting an environment that attracts corporate investments, and supporting rising local firms to allow them to expand to overseas markets.

Silicon Valley in the United States scored perfect 10s in all six categories and took the survey's top spot, extending the honor from the previous year. New York City and London, the United Kingdom, respectively took the second and third places, also the same as last year. Five Asian cities were selected in the top 20, including Beijing (5), Shanghai (8), Seoul (10), Tokyo (12) and Singapore (18).

Following London, Amsterdam (14), Paris (15) and Berlin (16) ranked high among European cities. Boston (4), Los Angeles (6) and Seattle (9) were high rankers in North America.