ABSTRACT

Purpose - Entrepreneurship promotion is emerging as an importanteconomic growth agenda. However, in Korea, entrepreneurshiphas weakened because of the collapse of theventure bubbles of the 2000s and the global economic recessionin 2008, which have induced the business community tochoose stability over risk. The Korean government has been implementingseveral support projects to inspire and promoteyouth entrepreneurship through various means including financialassistance; however, the perpetuation rate of young entrepreneurshipis still low as compared to advanced economiessuch as the US and EU. This case study focuses on the Youth Start-Up BusinessSupport Program of the Small & Medium Business Corporation,and explores practical alternatives. Further, it aims to suggestmanagerial factors and a conceptual model for change managementfactors affecting the business performance creation of astartup company, based on the Small and medium BusinessCorporation’s young venture startup fund. Research design, data, and methodology – Many studies examinethe current progress and issues of startup firms, for example,a lack of systematic cultivation of entrepreneurship andstartup business training, lack of commercialization funding foryouth startup businesses, lack of mentoring, and inadequateinfrastructure. From prior research, we address four factors,namely, personal managerial capabilities, innovative businessmodel, sufficient cash flow, and social network, affecting startupcompanies’ business performance. This study involved a samplesurvey of 200 young entrepreneurs to investigate casual relationsbetween the four factors and business performance. A re-gression analysis was used to verify the hypotheses. Results - First, in relation to differences in the founder’s personalcharacteristics, age, sales amount, and number of employeessignificantly impact business performance. Second, regardingthe causal relation between the four factors for creating businessperformance, an innovative business model and social networkinghave supported the hypotheses, revealing that the morethat a start-up founder has an innovative business model andsocial networking, the more the start-up firms are likely to havebetter performance (e.g., sales volume, employment, ROE, ROI,etc.). Although the founder’s competency and sufficient cashflow have no significant relationship with business performance,the mean value was higher performance for high founder’s competencyand sufficient cash flow. Conclusions - This study provides basic data on policy supportstrategies of the Small and Medium Business Corporation,to help young entrepreneurs achieve their start-up businessgoals. It shows that young entrepreneurship startup firms shouldstrive to explore ideas to satisfy customers’ needs, and thatchanges in customer value and the continuous innovation ofbusiness model differentiation are required to actively respond tochange management. Moreover, at the infant startup stage, theyshould activate social network programs to share information,thereby offsetting resource scarcity and managing business risk. Further, the establishment of a long-term vision and the implementationof training programs in related specific fieldsshould be supported to strengthen founders’ personalcapabilities.

KEYWORD

Youth Startup Firm, Entrepreneurship, Korean Ventures and SMEs, Managerial Factors, Business Model.

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