SpringerLink
Log in

The Success Factors of Korean Global Start-Ups in the Digital Sectors Through Internationalization

  • Original Research
  • Published:
International Journal of Global Business and Competitiveness Aims and scope Submit manuscript

Abstract

With the growing importance of start-ups in building a sustainable national economy, both the Korean government and scholars are demonstrating growing interest in strengthening the competitiveness of start-ups. The Korean government has promoted a number of initiatives, but there are also a growing number of critics who argue that government regulations are obstacles to the efficient operation of start-ups and their competitiveness enhancement. Many of the preceding studies on Korean start-ups have emphasized the critical factors of survival and growth, including entrepreneurship, innovation, and technology. However, these factors do not guarantee market success. In addition to technological capabilities, a good set of strategies are needed. This paper investigates how Korean global start-ups scale-up their businesses and gain success through global strategy. Specifically, this paper adopts the ABCD model and global value chain strategy to analyze the success factors of fast-growing Korean start-ups that operate in the ASEAN digital sectors. This paper argues that the growth of Korean digital start-ups through internationalization has not been directly accelerated by government support but rather to avoid government regulations. Moreover, the four strategic factors of the ABCD model facilitated their entry and success in the ASEAN market by develo** a cooperative relationship with local firms for efficient operations on a cross-border network.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Aju News. (2017). Lee Seung-kun, the president of Vivari Publica, said, 11 million people are worth 8 trillion won; Considering global expansion. October 23. Retrieved from http://www.ajunews.com/view/20171023082411964(in Korean). Accessed 5 July 2018.

  • Barney, J. B. (1991). Firm resource and sustained competitive advantage. Journal of Management,17(1), 99–120.

    Article  Google Scholar 

  • Baron, R. A., & Markman, G. D. (2003). Beyond social capital: The role of entrepreneurs’ social competence in their financial success. Journal of Business Venturing,18, 41–60.

    Article  Google Scholar 

  • Debanes, P. (2017). Layering the developmental state away? The know-on effect of start-up promotion policies son the innovation bureaucracy in South Korea. Working papers in Technology Governance and Economic Dynamics no. 78.

  • Digital Daily. (2018). The fast-growing market of fintech financial service…the reasons behind the evolution of Finger. January 23. Retrieved from http://www.ddaily.co.kr/news/article/?no=164914(in Korean). Accessed 11 Nov 2019.

  • Dongascience. (2017). Korea is turning into a colony of digital economy. September 27. Retrieved from http://m.dongascience.donga.com/news.php?idx=19946. Accessed 5 July 2018.

  • Ellis, J. (2017). Korea’s Althea closes $7 m series B funding for global expansion. October 26. Retrieved from https://www.techinasia.com/althea-series-b.

  • Financial Times. (2019). South Korea pins hopes on start-ups to power economic growth. February 1. Retrieved from https://www.ft.com/content/89875374-f6be-11e8-af46-2022a0b02a6c. Accessed 13 Oct 2019.

  • Forbes. (2018). South Korea triples its financial commitment to start-ups. February 28. Retrieved from https://www.forbes.com/sites/amyguttman/2018/02/28/south-korea-triples-its-financial-commitment-to-start-ups/#6e7dfce955fc. Accessed 13 Oct 2019.

  • Gereffi, G. (1994). The organization of buyer-driven global commodity chains: How U.S. retailers shape overseas production networks. In G. Gereffi & M. Korzeniewicz (Eds.), Commodity chains and global capitalism (pp. 95–122). Westport, CT: Praeger.

    Google Scholar 

  • Gereffi, G., Humphrey, J., & Sturgeon, T. (2005). The governance of global value chains. Review of International Political Economy,12, 78–104.

    Article  Google Scholar 

  • Han, J. W. (2017). Study on the paradigm change of Korean SME policy. Asia Pacific Journal of Small Business,39(4), 159–179. (in Korean).

    Google Scholar 

  • Hellman, T., & Puri, M. (2002). Venture capital and the professionalization of start-up firms: Empirical evidence. Journal of Finance,57(1), 169–197.

    Article  Google Scholar 

  • Im, J., Jung, S., Lee, S., & Chung, S. (2016). The study on the policy of the innovation cluster for start-ups incubation: Focus on Pangyo creative economic valley in Gyeonggi-province. Journal of The Korean Regional Development Association,28(4), 109–130.

    Google Scholar 

  • Jones, R. S., & Kim, M. (2014). Promoting the financing of SMEs and start-ups in Korea. OECD economics department working papers no. 1162. Paris: OECD Publishing.

    Google Scholar 

  • K-ICT Born Global Center. (2016). Korea start-up index. Seoul: K-ICT Born Global Center.

    Google Scholar 

  • Kim, Y. T., & Kim, J. J. (2019). A study on entrepreneurial support policy measures for start-up boom spread. Journal of Digital Convergence,17(6), 201–209.

    Google Scholar 

  • KITA. (2018). Mega-cluster analysis of TIMS start-ups of ASEAN four countries and its implications. Seoul: KITA.

    Google Scholar 

  • Ko, C. R., & An, J. I. (2019). Success factors of student start-ups in Korea: From employment measures to market success. Asian Journal of Innovation and Policy,8(1), 97–121.

    Google Scholar 

  • Kohler, T. (2016). Corporate accelerators: Building bridges between corporations and start-ups. Business Horizons,59(3), 347–357.

    Article  Google Scholar 

  • Korea Times. (2019). Toss grows but suffers ballooning losses. July 18. Retrieved from http://www.koreatimes.co.kr/www/nation/2019/07/513_272511.html. Accessed 11 Nov 2019.

  • KOTRA. (2018). ASEAN: Moving towards the cashless society. June 14. Retrieved from https://news.kotra.or.kr/user/globalAllBbs/kotranews/album/2/globalBbsDataAllView.do?dataIdx=166966&searchNationCd=101081. Accessed 5 July 2018.

  • Lee, S. B. (2015). Entrepreneurship and start-up promotion policy in Korea: Evaluation and policy recommendations. Koreanische Zeitschrift für Wirtschaftswissenschaften,33(1), 97–114. (in Korean).

    Google Scholar 

  • Lee, S. (2017). An analysis on the critical start-up success factors in small-sized venture businesses. Asia-Pacific Journal of Business Venturing and Entrepreneurship,12(3), 53–63. (in Korean).

    Article  Google Scholar 

  • Lee, Y. W. (2018). The strategy for sustainable competitiveness: Theoretical extension and application to the global conglomerates in the cultural industries. Unpublished Ph.D. dissertation, Seoul National University.

  • Lee, Y. W. (2019). Synergistic co-operations in the cosmetic industry: Learning and convergence between firm and social media. Kritika Kultura,32(1), 237–259.

    Google Scholar 

  • Lee, W., & Kim, B. (2019a). Business sustainability of start-ups based on government support: An empirical study of Korean start-ups. Sustainability. https://doi.org/10.3390/su11184851.

    Article  Google Scholar 

  • Lee, Y. W., & Kim, K. C. (2019b). The next growth strategy for Hallyu: A comparative analysis of global entertainment firms. Kritika Kultura,32(1), 79–116.

    Google Scholar 

  • Lee, J. M., Song, C., Park, K. M., Choi, I., & Kim, Y. (2019). The effects of direct and indirect government policies on technology entrepreneurship considering national cultural context. Innovation Studies,14(1), 33–59.

    Google Scholar 

  • Moon, H. C. (2016). The strategy for Korea’s economic success. New York: Oxford University Press.

    Book  Google Scholar 

  • Moon, H. C. (2017). The strategy for Korea’s economic success: Innovative growth and lessons from Silicon Valley. Review of International and Area Studies,26(3), 1–33. (in Korean).

    Google Scholar 

  • Moon, H. C. (2018). The art of strategy: Sun Tzu, Michael Porter, and beyond. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Moon, H. C., & Yin, W. (2017). Korea’s strategy for attracting foreign direct investment in response to the new US government. Seoul: KOTRA.

    Google Scholar 

  • Morrison, A., Pietrobelli, C., & Rabellotti, R. (2008). Global value chains and technological capabilities: A framework to study learning and innovation in develo** countries. Oxford Development Studies,36(1), 39–58.

    Article  Google Scholar 

  • OECD. (2013). Start-up Latin America: Promoting innovation in the region. Paris: OECD Publishing.

    Book  Google Scholar 

  • OECD. (2016). Entrepreneurship: Promoting innovative entrepreneurship. October. http://www.oecd.org/policy-briefs/bycountry/korea/. Accessed 13 Oct 2019.

  • Pangarkar, N., & Wu, J. (2013). Alliance formation, partner diversity, and performance of Singapore start-ups. Asia Pacific Journal of Management,30, 791–807.

    Article  Google Scholar 

  • Park, J. W., Park, M. S., & Kim, D. Y. (2012). The policy of fostering youth start-up firms within the framework of entrepreneurial ecosystem. Proceedings of Conference on Business Venturing,4, 132–144. (in Korean).

    Google Scholar 

  • Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.

    Google Scholar 

  • Porter, M. E. (1990). The competitive advantage of nations. New York: Free Press.

    Book  Google Scholar 

  • Ries, E. (2011). The lean start-up: How today’s entrepreneurs use continuous innovation to create radically successful businesses. New York: Crown Publishing Group.

    Google Scholar 

  • Seo, Y. W., & Lee, Y. H. (2019). Effects of internal and external factors on business performance of start-ups in South Korea: The engine of new market dynamics. International Journal of Engineering Business Management,11, 1–12.

    Article  Google Scholar 

  • Singapore Business. (2018). ASEAN e-commerce forecasted to grow 32% to almost US $90b by 2025. January 31. Retrieved from https://sbr.com.sg/economy/asia/asean-e-commerce-forecasted-grow-32-almost-us90b-2025. Accessed 5 July 2018.

  • Start-up Alliance. (2018). Start-up trend report 2017. Seoul: Start-up Alliance.

    Google Scholar 

  • TechCrunch. (2017). Korea’s top financial services start-up lands $48M from PayPal and others. March 10. Retrieved from https://techcrunch.com/2017/03/09/viva-republica-toss-korea-paypal-goodwater-capital-48-million/. Accessed 11 Nov 2019.

  • Tresca, R. (2013). Global business networks and the competitiveness of SMEs. Symphonya,2, 1–12.

    Google Scholar 

  • UNCTAD. (2013). World investment report 2013: Global value chains: Investment and trade for development. New York and Geneva: UNCTAD.

    Google Scholar 

  • Yeung, H. W., & Coe, N. (2015). Toward a dynamic theory of global production networks. Economic Geography, 91(1), 29–58.

    Article  Google Scholar 

  • Yim, H. R. (2008). Quality shock vs. market shock: Lessons from recently established rapidly growing U.S. start-ups. Journal of Business Venturing,23, 141–164.

    Article  Google Scholar 

  • Yin, W. (2017). Global value chains (GVCs): Theoretical integration, extension, and empirical analysis. Ph.D. dissertation, Seoul National University.

  • Yin, W. (2019). A new model for globalization in the film industry: Lessons from Sino-US film co-productions. Kritika Kultura,32, 117–140.

    Google Scholar 

Download references

Acknowledgements

We appreciate the helpful comments and suggestions by the editor and three anonymous reviewers.

Author information

Authors and Affiliations

  1. Seoul School of Integrated Sciences and Technologies (aSSIST), 46, Ewhayeodae 2-Gil, Deodaemun-Gu, Seoul, 03767, Korea

    Wenyan Yin, Hwy-Chang Moon & Yeon W. Lee

  2. Professor Emirate of Graduate School of International Studies, Seoul National University, Seoul, 08826, Korea

    Hwy-Chang Moon

Authors
  1. Wenyan Yin
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Hwy-Chang Moon
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Yeon W. Lee
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Wenyan Yin.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Yin, W., Moon, HC. & Lee, Y.W. The Success Factors of Korean Global Start-Ups in the Digital Sectors Through Internationalization. JGBC 14, 42–53 (2019). https://doi.org/10.1007/s42943-019-00003-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s42943-019-00003-2

Keywords

Search

Navigation