Title
Government to strengthen support for entrepreneurs restarting after failure Responding to criticism that support is concentrated on the start-up stage, the measures include raising the range of assets exempt from seizure in personal bankruptcy.
- Связанные страны
- 한국
Content
The government said it would strengthen the system that supports second attempts and re-established businesses after a start-up fails. Criticism had persisted that policy support was concentrated on the start-up stage while support for restarting remained thin. Noting that the cycle running from investment to recovery and from failure to a second attempt was weak, the government set out a series of measures.
- Criticism had been raised that government policy support is concentrated on the start-up stage while support for restarting is thin.
- The government proposed raising, in line with real conditions, the range of assets exempt from seizure in a personal bankruptcy caused by business failure.
- The two-year survival rate of government-supported restarted businesses was 83.9 per cent, against 47.5 per cent for new start-ups.
- Lee Young-woo, chief executive of Apostille Korea, won the top start-up prize in the 2016 competition for innovative cases of failure.
A diagnosis of a weak second-chance cycle
Government policy support has broadly been concentrated on the start-up stage. By comparison, support for the stage of starting again after a failure has drawn criticism for being relatively scarce. Comparing start-up and second-chance policy support in 2017, the amount allocated to the second-chance stage fell far short of the start-up stage. When a business fails, the burden falls largely on the founder as an individual. The continued use of joint surety arrangements by private financial institutions was also identified as adding to that burden. In such a structure, the government judged, the cycle from investment to recovery and from failure to a second attempt does not work properly.
What the survival rate of restarted businesses showed
The government acknowledged that the perception equating a failed start-up with no way back still lingers. It therefore concluded that institutional and policy support needed to be strengthened. The figures bear this out: the two-year survival rate of new start-ups stood at 47.5 per cent as of 2014. The two-year survival rate of government-supported restarted businesses, by contrast, stood at 83.9 per cent as of 2016. Lee Young-woo, chief executive of Apostille Korea, was presented as an example of re-establishment. He had run an internet search engine business that failed, worked for five years at an association for innovative small and medium-sized firms and then started again, winning the top start-up prize in the 2016 competition for innovative cases of failure.
Frequently asked questions
Why is the government strengthening support for second attempts?
Because policy support was concentrated on the start-up stage, leaving thin support for those restarting after a failure. The government judged the cycle running from failure to a second attempt to be weak.
What is the survival rate of restarted businesses?
The two-year survival rate of government-supported restarted businesses stood at 83.9 per cent as of 2016, higher than the 47.5 per cent recorded for new start-ups as of 2014.
What was proposed regarding personal bankruptcy?
A measure to raise, in line with real conditions, the range of assets exempt from seizure when business failure leads to personal bankruptcy, so as to ease the pressure on daily life.
Source: 정책뉴스 · 2017-11-17