Korea’s investment in financial technology to discourage technology leakage
The Republic of Korea in its region is considered the main country for public investment in innovative industries. In particular, it became known that Seoul authorities will invest more than $ 1 billion in financial and technological startups and blockchains until 2021.
The state is the main lender and venture capital investor in Korea, as well as Malaysia, Singapore and some other countries. This is due to the policy of preventing the leakage of valuable technologies from the country. Usually, a young business is acquired by transnational corporations precisely for obtaining its ideas and developments. In general, the Seoul government noted that in the near future, it will support not just high-tech companies, but those that have funding problems. The governors will give priority to fintech and blockchain.
According to the government, on average, the high-tech business in Silicon Valley accounts for about seven million dollars of investment. Similar numbers are in the UK. At the same time, in Korea, a high-tech startup accounts for only 1 million. The head of the economic policy department of Seoul expressed the opinion that the financing of young promising companies is intended to increase the introduction of innovations into society and strengthen corporate standards.
Korea investment in fintech and optimization of remittances
Korean officials were interested in financial technologies and blockchains primarily because the majority of large holdings in the state have banking divisions and at the same time, in fact, are transnational. Between offices around the world run the financial flows, from which a significant part goes to the commission of payment systems. The government is looking for ways to reduce the cost of bank transfers, and the blockchain and buffer cryptocurrency will help him in this.
Many American and European IT corporations are concerned about a large number of intermediaries who, in fact, provide automated services, charge for them a significant percentage of the amount transferred abroad. In particular, financial intermediation consists of two levels. On the first – serving bank. On the second – the payment system (for example, SWIFT). The Americans even created an initiative to reform the banking system and admit large producers directly to the clearing. Approximately the same problems and Korean high-tech companies. Therefore, the country’s leadership is interested in the development of financial technology and the introduction of new solutions in the corporate sector.
In addition to direct government investment in a young business, Korea plans to create programs for the development of private and private-public venture capital funds. This is done to increase investment in new technologies within the country, as well as to stimulate a startup ecosystem as a whole.
Seoul also created a working group to enable the introduction of the blockchain into the work of state bodies. According to officials, the openness and transparency of transactions is something that modern Korea lacks. There is even a development plan called Blockchain City Seoul.