With its vast middle class, population of 50 million and highly educated workforce, South Korea has performed an economic miracle since being left devastated by war more than 60 years ago. As Asia's fourth biggest economy with GDP of $US1.38 trillion in 2015, South Korea now leads the world in industries such as petrochemicals, semiconductors and lithium batteries, even as other industrial sectors such as shipbuilding and steel have given ground to lower-cost rivals.

But security and politics loom large, with foreign policy dominated by fears of aggression from North Korea, although the issue of potential reunification resonates more with foreigners than with citizens in the south of this divided peninsula.

The corruption scandal engulfing President Park Geun-hye, leading to her impeachment in early December, brought hundreds of thousands of protesters onto the street for days on end. It gripped the nation and points to a continuation of the nation's history of instability in domestic politics.

Promising to establish a "creative economy" on starting her term of government in 2013, and well before her current woes, President Park introduced initiatives to promote investment in start-ups and tax incentives for angel investors. Deregulation is a constant theme voiced by government officials.

"When I graduated from university more than 99 per cent of my friends thought about getting a job in Samsung, in LG or the government; now there's a gradual changing of thinking by students about their future," says 39-year-old Leo Kim. AP

Early results are evident: Google opened its first Asian campus for start-ups in Seoul in May 2015 in the famed Gangnam district. Start-up accelerators such as SparkLabs and Kstartup have sprung up with the aim of fostering budding entrepreneurs among the graduates being churned out from the regimented education system still oriented around the exams that open doors to a prestigious university and a highly paid job for life in one of the powerful, family-owned chaebols.

"There's been a fairly significant change in the last 10 years," says Ross Gregory, who moved to South Korea 13 years ago to set up Macquarie Group's securities operation in Seoul and who has since started up a craft beer company and a gym business.

"Is there a nascent desire to be innovative? Absolutely: the Koreans travel a lot more, they are very open to Western ideas and this 'It must be made in Korea' mentality has definitely departed.


"The Koreans are quick to adapt. Are they are as creative as the West? Well it's not in their education system to be creative so when you consider that I take my hat off to a lot of them."

Apartment buildings in Goyang, South Korea. The heir to the Samsung empire and other tycoons have taken a public drubbing by lawmakers over deep-rooted ties between politics and business that helped drive South Korea's economic ascent but are central to its recent political crisis. AHN YOUNG-JOON

But Gregory and others say there's still a long way to go.

"You will rarely hear Korean companies 'inventing' anything, but they do a great job in refining and streamlining which I think reflects the type of eduction laid out from a very young age," says Kenneth Park, the Korean-American co-founder of Urban Group, which runs the Vatos Urban Tacos restaurants in Korea and Singapore, a concept he started via a Kickstarter campaign six years ago.

"I do see a restless younger generation that wants to create, it's just a means of how to get to that point. There are more and more people realising that taking a corporate job doesn't really make them happy."

New companies often struggle with still-burdensome regulation, access to financing and a venture capital (VC) market that is still emerging.

Well before her current woes, President Park Geun-hye introduced initiatives to promote investment in start-ups and tax incentives for angel investors. Deregulation is a constant theme voiced by government officials. AP

"It's hard for start-ups," says Tareq Muhmood, ANZ Banking Group's head in Korea. "The VC, private equity market is still in its infancy here compared to many other countries."


Gregory agrees. "VCs in the States will throw money at businesses and be prepared to lose the lot because they only need one out of 10 that work," he says. "Over here they all went sure bets. Even VCs – let alone private equity – are incredibly cautious and they want companies with existing cash flows and profits. It's almost that they want the high returns and very low risk at the same time."

He points to structural impediments to capturing the innovative talents of Koreans, the cultural pressure on young people to get a university degree and get hired by one of the big name corporations instead of trying to start up a business, the "counterproductive" commercial rental system and inflexible labour laws. Foreign entrepreneurs will also encounter a level of distrust from Korean banks.

Down on Jeju Island, Kim says those involved with CCEI get a head start through its links with a network of VCs, fostered through Kakao, that provide advice on presentational skills and business planning as well as access to early capital. Among the start-ups the centre has fostered is TNDN, a restaurant guide app for Chinese tourists in Jeju, and Monolith, which is seeking to build a theme park on the island.

"We are not trying to help the big companies, we want to incubate the entrepreneurs with proper ideas: to find entrepreneurship, not single ideas," Kim says.