Revitalizing Private Funding for Korea's Growth

In a bold move to boost Korea's potential growth rate to 3%, experts are calling for the easing of Corporate Venture Capital (CVC) regulations. The Korea Chamber of Commerce and Industry highlighted the urgent need for private financial capital to play a more active role in corporate funding during a recent seminar.

The Path to 3% Growth

Hwang Se-woon, a senior researcher, emphasized the necessity of maintaining capital input contribution at 1.5% or higher. Achieving this requires an annual additional capital investment of '75 trillion won + α', a challenge given the current financial constraints and the fierce competition in advanced industries.

Breaking Down Barriers

The seminar proposed leveraging private capital to overcome government financial limitations. Strengthening CVC functions and introducing Business Development Companies (BDC) were suggested as viable solutions. Despite CVC's potential, strict regulations have hampered its growth, with last year's investments accounting for only 2.2% of total venture capital.

A Call for Regulatory Reform

Prof. Joo Jin-yeol criticized Korea's excessive regulations, which have stifled the growth of advanced industries. He advocated for allowing general holding companies to own asset management companies and easing ownership limits for financial holding companies, suggesting a shift towards a negative regulation system to foster innovation and competitiveness.