North Korea’s unlikely venture into startups

photo credit: Shin Hyon-hee/The Korea Herald

SINGAPORE -- Though North Korea remains one of the world’s most isolated economies, Pyongyang officials have apparently been seeking to nourish an unlikely entrepreneurial domain: startups.Four officials from the North’s National Academy of Sciences received a four months of training from September last year at a startup space run by Singapore’s state-run venture capital firm, Infocomm Investments, company officials said Wednesday.Dubbed Build Amazing Startups Here, or BASH, the Southeast Asian country’s largest all-in-one facility brings together all stakeholders across the value chain, from young startup hopefuls and entrepreneurs to accelerators and incubators.The “accelerators” -- largely former and incumbent corporate executives -- are tasked with assessing market demand for product development and then helping build startups. BASH also offers office space and other support for free to the up-and-coming entrepreneurs. With the mentor system, the overall success rate easily tops 40 percent, compared with below 1 percent posted by the traditional scheme, Infocomm head Alex Lin said.During their stay, the four North Koreans studied the new incubation system in a perceived bid to harness the country’s relatively advanced information technology skills, such as in courting investors to its special economic zones, Infocomm officials said.The move has been deemed part of the Kim Jong-un regime’s efforts to explore fresh ways to secure hard currency, as it has been struggling to keep its economy afloat amid tightening international sanctions over its nuclear programs.In August 2014, North Korean researchers and businesspeople took part in a two-week workshop as part of Choson Exchange’s Tech Start PY program, focusing on helping foster an entrepreneurial culture and a favorable environment for startups there, according to the Guardian newspaper. Last July, the Financial Times reported the communist state held its maiden, weeklong startup fair at a university, though it was attended by six foreign professors and students only, without any real venture firms or investors.While showing a keenness and high ability to learn as well as technical expertise, the North Koreans confronted two main challenges: language barriers and their lack of fundamental understanding of a “market-driven economy.”“(The problem) was their ability to translate their thinking into the market. They don’t communicate with markets enough to be able to find out what is needed and to adjust,” Lin told visiting Korean reporters.It remains unknown whether and how the officials have utilized their lessons in their own business projects. Since their return home, they have rarely been in touch, though they did send emails once in a while, he noted.“But they’ve seen more customers here, and would see more customers back home. That would help them a lot. That is the change.”By Shin Hyon-hee (heeshin@heraldcorp.com)Korea Herald Correspondent