Measuring South Korea's Innovation Economy

Mind the Bridge presented in Seoul the latest application of its framework for measuring innovation ecosystem health, focusing on South Korea. The firm has developed a model designed to standardize comparisons of innovation ecosystems across countries and regions, while acknowledging each ecosystem's distinct traits.

The methodology employs a pyramid structure for companies. At the base are startups, followed by scaleups—companies that have raised over $1 million in venture capital. The number, growth rate, and sector mix of these companies provide insights into an ecosystem's maturity. Additionally, the model accounts for companies that have achieved international scale. It also includes a frequently under-measured group: innovative SMEs that are not venture-backed but compete through technology and innovation.

The model emphasizes that merely counting tech companies is insufficient; innovation's true economic impact arises when it meets demand. Demand is represented by both local and international corporations, which can support startup solutions through accelerator programs, M&A, and other collaborations. Consumer demand also plays a significant role in company growth.

South Korea's innovation pyramid comprises 3,359 scaleups. This positions South Korea as the world's eighth-largest national innovation ecosystem. Seoul ranks as the 11th most developed ecosystem globally. Below the scaleup layer are approximately 10,000 startups and about 25,000 non-venture-backed technology SMEs.