CONGLOMERATES JOIN HANDS WITH STARTUPS

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It's difficult to respond to shifting market conditions the bigger and more structured conglomerates become. In order to adapt to such change quickly, large conglomerates have joined hands with startups for its investments in new businesses and product development.

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This startup has a patent for producing cosmetics with beer brewing by-products. The company is preparing to release new products under the auspices of a large liquor manufacturer, which has provided the R&D funds. The liquor manufacturer can benefit from the deal by reducing by-product processing costs and expanding its business areas in the long run.

[Soundbite] Lee Pom-joo(Cosmetics startup CEO) : "Creating new added value with by-products can become a new source of revenue."

And this startup specializes in robots. Executives from a large logistics company are seen here receiving field training. They learn how to promote autonomous driving and robotic technology into business items quickly, and grasp the latest market trends.

[Soundbite] Park So-young(Personnel Department, GS) : "Technology evolves so fast you never know what will happen next. Business leaders can catch early signs quickly only if they understand the latest technologies and the way startups work."

The trend gained momentum after financial authorities permitted ordinary holding companies to operate venture capital in 2021. Nine holding companies have invested over 80 billion won in corporate venture capital between 2021 and 2022. The trend is expected to help conglomerates and SMEs grow mutually. However, there are also concerns that large corporations may steal SME technologies.

[Soundbite] Yoo Jung-hee(Venture Business Association) : "Startups lack capabilities to protect their technologies because their organizational structures are not as well-established."

A survey shows nine out of ten SMEs and venture firms give up on patent lawsuits because they are high-cost and time-consuming. Policies are needed to further activate the venture business environment.