Research Article
The POSCO’s Venture Ecosystem: Creation, Evolution, and Future Strategies
1 NYET (New York Institute of Entrepreneurship and Technology), 2 Myongji University, 3 Yonsei University
Published: January 2024 · Vol. 28, No. 3 · pp. 41-68
DOI: https://doi.org/http://dx.doi.org/10.17287/kbr.2024.28.3.41
Full Text
Abstract
This study explores and analyzes the “POSCO Venture Ecosystem,” a leading example of a corporate-driven venture ecosystem, with the primary objective of offering valuable insights to the private sector, where intense competition among innovation ecosystems is emerging. Additionally, the study aims to enhance the effectiveness of governmental institutional and policy frameworks at both regional and national levels. The “POSCO Venture Ecosystem” has evolved over the past 25 years, beginning with the formation of the “POSTECH Venture Fund No. 1 Investment Partnership” (90 billion KRW) in 1999. As of June 2024, the cumulative total amount raised by venture investment funds has reached 2.75 trillion KRW, representing an annual growth rate exceeding 12%. By June 2024, 483 companies have received investments from the POSCO Venture Fund, with a total investment amount of 1.6 trillion KRW. Including indirect investments, the ecosystem has supported approximately 1,500 companies. Compared to global benchmarks, such as Google's investment in around 1,300 companies over a similar period, this underscores POSCO Group's significant commitment and sustained effort in fostering a venture ecosystem. The “POSCO Venture Platform” consists of three core components: “Venture Valley,” “Venture Fund,” and “Venture Value-Up,” which are designed to function synergistically. A detailed analysis reveals that the “POSCO Venture Ecosystem” has surpassed the traditional venture ecosystem model, evolving into a comprehensive corporate innovation ecosystem that integrates the entire innovation lifecycle—from basic research to commercialization, venture creation, incubation, investment, and global scaling. This model is unique within South Korea and rare globally in terms of its scale and sophistication. While the primary aim of POSCO Group is to promote venture creation and support its growth through the expansion of innovation resources and networks, the “POSCO Venture Ecosystem” also significantly influences regional and national innovation ecosystems. To further enhance the “POSCO Venture Ecosystem,” the study proposes five strategic priorities: (1) establishing “POSCO Innovation Ecosystem” governance at the corporate level, (2) building a foundation for Corporate Entrepreneurship within the organizational structure, including mechanisms such as company-in-company (CIC), internal ventures, and spin-off/ spin-out/spin-in startups, (3) strengthening leadership in innovation investment through the expansion of POSCO Technology Investment’s proprietary and principal accounts, (4) scaling the “POSCO Innovation Ecosystem” to a global level, and (5) global branding of the POSCO Innovation Ecosystem. Finally, from an institutional and policy perspective, the study emphasizes the need to introduce the institution of the “Special Company for Industrial Innovation and Entrepreneurial Development,” drawing on models such as Corporate Venture Capital (CVC) and Business Development Companies (BDC) in the United States, to support the development of comprehensive venture ecosystems led by individual corporations, as exemplified by POSCO.
