2018 CITYPRENEURS

POLICY INTERFACE AT 2018 CITYPRENEURS SEOUL

SUCCESSES & CHALLENGES OF YOUTH ENTREPRENEURSHIP FOR THE SDGs IN SEOUL AND BEYOND

2018 POLICY INTERFACE PANEL 1

 

PANELISTS

PANEL 1 MODERATOR

Regional Youth Project Coordinator,

UNDP Asia-Pacific

SAVINDA RANATHHUNGA

Managing Director,

Seoul Digital Foundation

이정우 / JUNGWOO LEE

CEO, DOBRAIN INC.

2017 Citypreneurs Grand Prize Winner

최예진 / YEJIN CHOI

Programs Manager,

Hanyang Uni. Social Innovation Center

ZAHIN HUSSAIN

SUMMARY

01 [Challenges Faced by Youth-led Startups]

From the perspective of young entrepreneurs, main challenges include a lack of funding and facilities, difficulty in sustaining the motivation within the team, and a lack of networking opportunities, especially for young female entrepreneurs. To address such impediments, along with appropriate support from the government, young people need to be aware of the different market needs and regulations on startups and be prepared(be ready) to analyze and understand essential trends in social innovation. Citypreneurs can be a great platform for youth-led startups to exchange opinions as well as acknowledge the importance of social impact

03 [The Mindset Of Starting and Running Startups]

It is necessary to point out that the essence of a startup is on solving social problems with entrepreneurship rather than expecting financial success. Thus, young people need the entrepreneurial mindset of not giving up and consistently looking for opportunities that would enable them to realize their ideas. Going beyond ideation, it is also crucial to validate feasibility and resilience of the startup for the purpose of trust-building when it comes to receiving investment from the government or private sector partners.

05 [The Role of the Government in Strengthening the Ecosystem for Youth-led Startups]

Policymakers need to pay more attention to youth-led startups in order to minimize policy gaps and strengthen connectivity between different stakeholders. For example, there is a mismatch between reality and policies in government-led key performance indicators and lack of expertise in shaping programs related to fostering startups. Certain regulations on investment also impede the government from providing swift support to entrepreneurs. Therefore, there needs to be more understanding and cooperation between stakeholders to resolve such issues. Trust can be built through consistent communication between young people and the government.

02 [Sharing Good Practices Of Public-Private Partnership In Tackling Urban Issues in Seoul]

Case 1 – Seoul Metropolitan City partnering with KT Corporation on designing optimal night bus routes by using big data: In order to establish night bus routes, KT collected data on mobile phone call history and taxi rides across the city to visualize the moving pattern of citizens on a map. Case 2 – Waste management solution for Bukchon village by Ecube Labs: The Seoul City was able to optimize the operations of waste management by engaging a startup that installed sensors on every trash bin in the tourist area.

04 [The Role of Educational Institutions in Fostering Youth Entrepreneurship]

University should encourage youth to realize what they are passionate about and what impact they want to make by promoting awareness on social issues. Prior to incubating startups, educational institutions should play a role of “sandbox” where young people could engage in creative thinking without having to worry about failures. Connecting them with impact-oriented entrepreneurs at both local and overseas levels through programs such as networking events and boot camps, would empower youth to come up with innovative solutions to challenges hindering sustainable development.

06 [The Importance of International Cooperation between Cities in Fostering Startups]

With growing interconnectedness of the world, the government needs to work on strengthening international ties between cities, as well as startup ecosystems, in order to encourage Korean youth entrepreneurs to go beyond borders and strive to contribute to the Sustainable Development Goals. In doing so, thorough research and analysis of good practices from both developed and developing countries would be essential for more diversity and inclusivity. City of Shenzhen in China can be a good lesson on how public-private-academia cooperation towards accelerating the startup ecosystem is being implemented.

YOUTH INNOVATION FOR SDGs IN THE FOURTH INDUSTRIAL REVOLUTION

2018 POLICY INTERFACE PANEL 2

 

PANELISTS

PANEL 2 MODERATOR

Associate Sustainable Development Officer, UNESCAP

LI ZHOU

Regional manager for South and Central Asia, Techstars

ANURAG MALOO

Founder, Adriel AI / Solidware

UN High-Level Panel on Digital Cooperation Committee Member

SOPHIE SOOWON EOM

SUMMARY

01 [Opportunities of Frontier Technologies for Start-ups]

Frontier technologies associated with the 4th Industrial Revolution (4IR) will transform many parts of our economy and society. This will offer opportunities for start-ups, particularly those that leverage new technologies to create new markets or disrupt dominant providers in existing markets through increased efficiency and product differentiation. The scale of transformation associated with 4IR will generate many opportunities, and start-ups will drive a lot of this transformation if it is in an environment where dominant players are not shielded from competition.

03 [Ethical and Human-Centered Development of 4th Industrial Revolution]

Citypreneurs focuses on impact, including economic, social, and environmental impact. Inherent in this approach is to integrate externalities into the assessment of business models. Therefore, it is important to consider the ethics surrounding the way new technologies are used, and whether it is environmentally and socially sustainable; the assessment should also include both the outcomes (the ends) as well as the process (the means).

A humancentered approach is not only important from the perspective of positive impact; it is also crucial in the era of increased human-computer interaction that still relies on humans to make choices in the marketplace. A human-centered approach is therefore also important to access new markets and generate revenue.

05 [Open and Competitive Markets]

To successfully take advantage of 4IR, start-ups and innovators must have access to competitive markets. Existing corporations and the government will have a role to play in ensuring the market is open and competitive. Zero-sum thinking can inhibit the generation and diffusion of innovation and lead innovators to relocate to markets that are more open, therefore weakening the innovation system overall. The interlinked nature of 4IR technologies further benefits from positive sum thinking that promotes collaboration.

02 [Considerations of Risks Associated with Frontier Technologies]

As with all economic transformations, there are risks associated with frontier technologies. One area of concern that has already showed up in statistics is the impact of automation technologies on employment, particularly youth employment. Young people in the Republic of Korea have experienced a trend of in declining employment rates, not just in manufacturing, but also in professional services and office clerical work. As the country leads the world in robots per capita, the trend of AI displacing non-manufacturing employment may be an early data point signaling potential labour market disruptions. Supporting youth entrepreneurship is therefore an important opportunity for young people as traditional avenues of employment narrows.

04 [Building an Inclusive Fourth Industrial Revolution]

The transformative potential of 4IR will affect everyone in society in profound ways, making it important that everyone be included in this revolution. Inclusion is important both in the composition of its workforce and in their approach to customers. If opportunities arising from 4IR continue to be dominated by one segment of the population while the dislocation effects are borne by others, the social sustainability of 4IR will be challenged. Inclusion in hiring and investments will be a crucial factor in expanding opportunity and mitigating against increasing inequality. Additionally, the engagement of diverse groups in the development and implementation of new technologies will be important to spread the benefits of 4IR products. This is particularly important in the context of rapid population ageing, in which a large portion of the population may not be digital natives. An inclusive approach here will further support the expansion of new markets for 4IR start-ups.

TECHNOLOGY, INNOVATION & INCLUSION

2018 POLICY INTERFACE HIGH-LEVEL STAKEHOLDERS MEETING

 

SUMMARY

01 [What is inclusion and why does it matter in technology and innovation?]

Discussants shared their various perspectives on inclusion and echoed the importance of the Sustainable Development Goals’ commitment to “Leave No One Behind” as the guiding principle in its consideration. Discussants viewed inclusion not only through an economic dimension but also through a social dimension. Considerations were given to social identifiers such as gender, race, age, religion, disabilities, and sexual orientation. Discussants agreed that inclusion should be grounded in providing universal accessibility and equal opportunities for everyone. Discussants proceeded to acknowledge that inclusion, however, is not often a key consideration for businesses, and that there is a misconception that an inclusion agenda runs counterproductive to a profit agenda. Discussants discussed this misconception and sought to challenge its proliferation – arguing that the importance of inclusion for businesses goes far beyond social good, and that it can also align with a business’s economic interests. It was argued that having a diverse range of perspectives is important in generating different ideas and fostering innovation, in helping businesses to successfully breach different markets, and in challenging hidden assumptions and groupthink. Tangible statistics were provided to support the notion that inclusion and profit can be economically aligned. Companies whose boards had a higher than average percentage of women outperformed those with fewer than average¹. A 2017 McKinsey report found that if there are three or more women on the board of a company or in a startup, statistically they generate a 47% higher return on equity and 55% higher earnings before interest and tax². A PIIE report also noted that companies whose executives comprised of greater than 30% women earned, on average, 6% more net profit than those with less than 30%. Diversity³ practices positively impact competitiveness through increased team efficiency and 60% higher results⁴. As such, in addition to more creativity, innovation, and balance, inclusion can generate concrete and tangible benefits as well.

03 [Challenges and Barriers to Inclusion]

Discussants shared the various challenges that they had encountered in the process of pushing for greater inclusion in their respective areas of responsibility. Policymakers noted that the public sector generally lacks sufficient understanding and knowledge on the full potential of technology, which leads to confusion on what policy agenda should be pursued with regarding inclusion. The space is new even from a policy perspective, which signifies that there are not many clear precedents on many of the topics that need to be addressed. Therefore, the issue is not only about the implementation of good policies, but also about the identification of such policies are. Even when good practices are identified, it is often hard to scale them up to a meaningful degree, especially when complemented with the necessity to accommodate the needs of everyone. In addition, investors are generally interested in matters of return on their investments, with less attention given to the importance of inclusion and sustainability, which naturally leads to a lack of funding for many social and impact-driven startups.

05 [Efforts of the Seoul Metropolitan Government]

Governments have become increasingly aware of the impact that social enterprises have on the building of sustainable, inclusive communities. Representatives from the Seoul Metropolitan Government (SMG) discussed some of their work and challenges within the space.

  • The SMG is engaged in ongoing efforts targeted towards human development and inclusion. One of the key considerations of any project it engages in is the distributional effect of the funds invested within the community. An example of this is in the method through which the SMG makes group purchases for its operations – it grants special benefits to female-led enterprises through procedures such as a preferential purchasing system or sealed, competitive bidding.

  • There has been a minimal increase in the proportion of startups founded by women in the past five years. The SMG had previously opened the Seoul Startup Hub in Mapo City and set up fifteen entrepreneurship support centres exclusively for women; however, female entrepreneurs are not making full use of the infrastructure. This highlights the difficult nature of gender inequality in the innovation space, an issue that the SMG will continue to work diligently on.

The efforts of the SMG are still in their early stages. As such, the government lacks proper indicators to guide and measure the success of impact-driven startups. The public sector in South Korea has been earmarked to significantly expand its interest in social enterprises as well as small to mediumsized businesses. It is hoped that together with this shift in focus from the government, there will be increasing commercial interest from investors. From a perspective on policy implementation, the discussion of whether new policies should be introduced or existing policies should be transformed is still ongoing. Working through changes of administration is an issue confronting all departments. Designing robust and sustainable solutions is, therefore, a must.

02 [Positive Precedents of Policies, Practices & Projects]

Discussants shared several examples of policies and projects that had successfully challenged harmful stereotypes and encouraged greater inclusion in the technology and innovation space.

  • One example given was from New York City, which spends $16 billion USD annually on project procurement. The policy cited was one that stipulated that of the annual budget for procurement, a minimum of 8% must go to Women- and Minority-owned Business Enterprises (WMBEs). This example highlighted the critical role that governments can play in making investments and hence their potential in creating more opportunities for underrepresented groups.

  • Another example given was from Brazil, where the City of Porto and several other cities together hosted a Hackathon, called Hackacity. Under the partnership with the Human Smart Cities Network, these cities opened up their databases and invited citizens from the community to come up with innovative solutions to the community’s urban problems. For example, in Belo Horizonte, the Open Data Portal was newly launched for the Hackathon. The first winner of the Hackathon was a low-income, homosexual woman of Afro-descent, challenging the stereotype of what an innovator should look like and alleviating the unwarranted fear of policymakers in the opening up of data.

  • One last example given came from Portugal, an initiative called “Portuguese Women in Tech”. Structured as a competition, it was launched to recognise and award women who were making contributions to the technology industry. The initiative was seen to be important in showcasing female role models within the technology industry in the hope that it may inspire other women.

04 [Current Issues Experienced by Young Innovators]

Discussants heard from a young entrepreneur based in Seoul with regards to her experience navigating the policy landscape of Seoul City. Three points were raised that she felt to be important.

  1. Social welfare for workers is often tied to their employer, not directly to the government. As a result, workers will often be hesitant to enter newer, more fledging organisations as these organisations are generally not able to provide the same level of social welfare benefits as larger employers. Therefore, it is important that the government provides adequate social protection and social services to reduce workers’ reliance on employer-based benefits, and hence encourage more participation in the startup space.

  2. Governments should measure the success of their innovation and startup funding through a more diverse set of criteria. Currently, the criteria for measuring the success of a startup are heavily skewed towards metrics around how much employment the startup generates. The government should consider a broader set of criteria, including metrics that account for growth and innovation. This shift is crucial in facilitating the increasing youth demand to pursue impact-driven enterprises in Korea.

  3. Support from the government for innovation and startups is currently limited in the avenues through which support is provided. Currently, government support is primarily through funding and other financial support. However, the support from the government should be more all-encompassing – including infrastructure, mentoring systems, and the creation of an ecosystem conducive to innovation in order to maximise the chances of success for startups.

06 [On the Way Forward]

Education is a crucial factor in the continued focus on inclusion and sustainability and in the progress towards an informed, inclusive ecosystem. Those in power need to take the lead in challenging stereotypes, pushing for change, demonstrating the importance of inclusion, and sharing best practices that local communities can learn from. For full impact, leaders need to play an active part in the promotion of inclusion to demonstrate their commitment to the wider community.

 

Idea and policy assessment from diverse stakeholders are imperative, given that opportunities and policy impact will differ depending on the context. Based on the resulting feedback, policymakers should adopt a more longitudinal perspective in their analysis of challenges and opportunities to ensure that their policies are not counter-productive. In this light, SDGs 17 – strengthening the means of implementation and revitalizing the global partnership for sustainable development – is the key to scaling-up and expanding the results of discussions/dialogues.

 

It is important that there be an aggregation of ideas and assessments from a diverse range of stakeholders. There needs to be a multisectoral platform to attract voices from all pockets of society to tackle issues confronting the innovation and technology space.

1 Catalyst Knowledge Center (March 2017). “Women on Corporate Boards Globally: Quick Take.” https://www.catalyst.org/knowledge/women-corporate-boards-globally

2 McKinsey & Company (October 2017). “Women Matter: Time to Accelerate – Ten Years of Insights into Gender Diversity.” https://mck. co/2SiUurO

3 Barbara Kotschwar, Tyler Moran & Marcus Noland (February 2016). “Is Gender Diversity Profitable? Evidence from a Global Survey.” Peterson Institute for International Economics Working Paper Series. https://piie.com/system/files/documents/wp16-3.pdf

4 Cloverpop (2017). “Hacking Diversity with Inclusive Decision Making.” https://www.cloverpop.com/blog/research-shows-diversity-inclusionbetter-decision-making-at-work