KOREAN STARTUP ECOSYSTEM AND LESSONS LEARNT FOR DA NANG, VIETNAM

City is a product of human history. In our history, we have always utilized the knowledge, experience and the state of art technology we have in order to solve urban problems and respond to new demands at all times. The accumulation of this process can be seen as a City and a City Life of today. City is the place where we live, work and play together, and the accumulation of urban development process is eventually the history of mankind. City has been developed by the old generation’s establishment of the valuable zeitgeist, the new generation’s progressive succession and the continuous evolution, and the common efforts of both generations to realize it. Cities that have maintained this virtuous cycle have been leading the civilization and culture of mankind.

However, it is not easy to sustain. What do you think if the Athenians, the origin of western civilization 2000 years ago, and the Florentines, the pathfinder of the Renaissance 500 years ago, now see Athens and Florence which have become tourist attractions? Could people 300 years ago imagine the New York Silicon Valley of today? Will it still be the city the world admires even after 300 years? The answer would not be easy.

Seoul, which was one of the poorest cities in the world after the Japanese colonization and the Korean War, outshining its reputation as a 700-year capital, has become the fifth largest economic region in the world today. Danang is now the hub of the East-West Economic Corridor linking with four countries in the Indochina Peninsula, leading urban development and economic growth of the Central Vietnam. How Seoul and Danang could have achieved and sustained it, and what needs to be done to raise the quality of life for the citizens are the matter of the city and new demand of this age.

The answer is in the city. The future is the Age of City.

According to the UN, in 2016, an estimated 54.5% of the world’s population lived in urban settlements. By 2050, it is expected to increase to 66%, showing that urbanization combined with the overall growth of the world’s population could add another 2.5 billion people to urban populations. However, cities are becoming the main cause of climate change, which is the biggest crisis threatening the future of mankind today. It means that if cities grow in the same way just like today, the greatest threat to mankind will be the city. On the other hand, cities are attracting attention as a place of sustainable growth and a place where creative innovation takes place. This is because new opportunities for the future also exist in the city.

In the last century, cities have shifted their production capacity out of the city or out of town, weakening manufacturing industry. The rate of manufacturing industry in major cities around the world, including New York, London and Paris, do not exceed 5%, and Seoul has a steady decline in manufacturing. As a result, the traditional urban space, where production capacity used to be concentrated in, has completely transformed into a space of consumption and service.

Urban manufacturing has traditionally been the engine of the city that has brought entrepreneurship and entrepreneurs as a cradle of high technology and industry. However, the decline of urban manufacturing has led to the disappearance of jobs for young people who have come to the city in search of a better life. The city’s industrial ecosystem, where live, work and play are integrated, has lost its power due to a reduction in production capacity. Today, youth’s job problems have many causes, but the biggest culprit is because there is no sound industrial ecosystem that can provide the decent jobs in the cities. According to the UN, the global youth unemployment rate in 2017 is 13.2%, which is steadily rising since 12.8% in 2011. A more serious problem is that more than one-third of working youth are actually living below the poverty line despite having a job.

The solution to the problem can be found in urban innovation and related entrepreneurial activities. Today, cities are evolving into a global innovation platform to develop and commercialize academic and scientific research outcome. For this growth, new social capital and human resource need to be supplied constantly. The major cities of the world reaffirm the importance of the urban production capacity led by the advanced manufacturing industry along with the innovative development of digital technology. They have begun to make more efforts than ever to pre-empt the concept and realization of a new innovation district by linking the regional knowledge-based industrial ecosystem with the international knowledge-based industrial ecosystem through active knowledge exchange. The creative industries and advanced manufacturing industries have emerged as the core of city competitiveness. And at the very heart of it, there are creative entrepreneurs with entrepreneurial enthusiasm.

In Korea, the potential of human resources to lead creative industries and advanced manufacturing industries is higher than any other country in the world. 99.6% of the Korean youth population, i.e. nearly all of them, were born between the 1980s and 2000s, and are regarded at digital natives, a generation familiar with computer and internet environments. However, in the entrepreneurship of creative and high-tech manufacturing sectors, Korea is at 18th place among the 30 OECD countries, lower than the average. The more serious problem is that we have not thought about the necessary elements for the youth’s entrepreneurial activity to be actively pursued.

Korean society has been troubled that Korean young people have no entrepreneurship. Sangam Digital Media City (DMC) in Seoul, which is regarded as the most successful example of planned urban industrial ecosystem, has been supporting the transition of creative idea to valuable outputs in the whole process of media industry by combining start-ups, small and medium enterprises and large corporations. However, even Sangam DMC is not very active in terms of start-up business, compared to its remarkable business outputs of 900 companies, 50,000 creative workers, and 20 trillion won in annual sales (as of 2016). Since the world-class corporations such as Apple, Hewlett-Packard, and Google have begun in the garage, therefore, we just thought we could only provide better space than the garage. But it took us a while to get to know we had no real ‘garage’.

As a cradle of entrepreneurship, the garage is a maker-space full of tools that can make anything of its own, and a workshop where they can work freely at any time. It is a stable residence with little cost without interference from parents. There is also a 24-hour city service that allows them to enjoy leisure and cultural life beyond the garage door. They can freely exchange and cooperate with their friends who have similar thoughts, and get the opportunity to realize and commercialize their own ideas in decent urban environment and social system. In other words, the garage is a creative cradle with an ecosystem of all the business start-ups that can live up to the minimum cost and space, and realize their own ideas and exchange and cooperate with others before they have a proper business. In this environment, when the real ‘garage’ culture meets the energy of entrepreneurs, it brings about the creative innovation. Indeed, Silicon Valley, as well as Manhattan and Meat Packing Factory in New York, Innovation District in Boston, and Tech City in London, are crowded with entrepreneurs with good ideas to lead the emerging high-tech driven manufacturing industry and create a new market value for this.

The success of the garage start-up culture may be a reference to other developing countries such as Vietnam, but it is difficult to apply it as a realistic future model. Therefore, we need to make efforts for our own definition and realization in terms of; the maker-space that can create prototypes as in the garage; spaces and programs to support start-ups; stable residence of a reasonable price; and last but not least urban environment of various urban services.

Vietnam has been transformed to a middle – income country in a generation. This trend is expected to continue for 30 to 50 years, based on its golden population ratio, which is the ideal percentage of the population needed for economic development as defined by the United Nations. In Da Nang, out of a 547 thousands people aged 15 or older who are able to produce, about 80% are actually participating in economic activities. In short, it has sufficient human resources to meet labor-intensive industrial demand in the short term and meet the demand for Vietnam’s economic and industrial structure change in the long term.

What is more remarkable is that the IT industry is already spreading in this young country and the entrepreneurial activities based on it are being actively carried out by young people. Vietnam’s internet penetration rate is 52% in 2017, of which 97% of young people between the ages of 15 and 24 are Digital Native, a generation familiar with computer and internet environments. In addition to the human resources that are favorable for the start-up of IT-based industries, the entrepreneurial activities are being fostered by national strong support for technology, engineering and entrepreneurship. In other words, up to now, there have been support for entrepreneurship can be regarded as providing a co-working space; linking upbringing institutions such as investors, accelerators, and incubators; capacity building at university education level; and institutional support of the governments.

However, in order for Danang to become a sustainable city in terms of creative entrepreneurial business, it is necessary to consider the ‘maker-space’, which is an important factor in increasing competitiveness of urban industry. Maker-space is a core infrastructure which is essential for start-ups to improve the production capacity and high-tech manufacturing of the city in this digital eraIt is equipped with experimental and production equipment such as metal 3D printers and advanced digital devices to experiment with technical ideas and produce prototypes as a public workplace. In other words, it serves as a basic infrastructure for establishing a digital-based manufacturing industry, and serves as a campus that facilitates cooperative cooperation and knowledge exchange by providing high-tech equipment for public purposes that might be too much expensive and difficult for individuals to equip.

Therefore, Vietnam needs to be equipped with a manufacturing space in the center of the city such as Da Nang city, where demand is concentrated and utilization rate is high in the long term. It is necessary to have all the processes of prototype production from DIY (do it yourself) to idea verification, commercialization, mass production, and also multi-dimensional education programs so that all generations can be educated. The success of maker-space allows many people to create various values through entrepreneurship, thereby creating opportunities and cultures for more entrepreneurship and challenges.

Therefore, making urban ecosystem for entrepreneurship in Vietnam should be starting with recognizing the importance of urban environment where Vietnamese entrepreneurs live stably, find their work fun, enjoy urban cultures, therefore, their entrepreneurial activities can grow as robust businesses. In other words, as did traditional cities, the modern city should play a role as a living laboratory, a test-bed, an experienceable market and showcase that would enable entrepreneurs and new ventures to continue to evolve.

Entrepreneurship should be understood not simply as industrial, job-related, but urban environmental issue. Therefore, streets of the city should be planned as a good walking environment for pedestrians and public transportation so that attract various people and various activities through openness and communication. A good walking street not only has a positive impact on the local economy by attracting a large number of people, but it is also an important factor to enhance urban vitality and competitiveness. It is also a way for the international society led by the United Nations to implement the Sustainable Development Goals (SDGs) in response to global climate change issues, although this is in view of the affordability of young entrepreneurs. It also meets the goal of “Cities for all” that UN-Habitat pursues through the New Urban Agenda. In other words, sharing physical resources, i.e. urban space, should build a foundation for active communication and exchange of diverse people, diverse activities and ideas, thereby provide opportunities for new innovation. In the end, pursuing a city that is sharing and inclusive through openness and communication is no longer a choice but a prerequisite for the sustainable development in the future.

We have an obligation to respond to climate change and rapid urbanization issues and realize the humanitarian goal of saving a healthy environment for the future generations. For this purpose, a virtuous circle of industrial ecosystem should be established in order to harmoniously and continuously promote the goal of environmental, social and economic development of this age by utilizing advanced technology. Creating a new entrepreneurial ecosystem will bring in new industries and creative workers so that restore urban productivity and vitality; continuously promote urban industrial culture; and enhance competitiveness of the city. The opportunity to create a higher value that can contribute to the future of the global society and mankind by utilizing the technological and industrial capabilities, potential, and excellent human resources that Vietnam already has in the field of entrepreneurship would start from the social consensus of all of us who recognize the real value of culture of entrepreneurship, the physical environment and the resources to realize it.

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