1998-1999, The Venture Boom, Part 1

The Venture Business Act, the first of its kind in the world, was a springboard for the compressed growth of Korean ventures in 1997. Based on this, Korean ventures were able to grow by leaps and bounds to advanced levels in a short period of time. With comprehensive policy support for manpower, funding, and location, the Act was a unique Korean creation that reflected the challenges of venture capitalists at the time.

In 1998, INKE was created as an alternative to venture globalization. INKE is a network of Korean venture capitalists living abroad, and it has become a forward base to help localize ventures when they go overseas.

In 2000, a technology exchange was established. If the KOSDAQ supports leading ventures and the Venture Business Act supports startup ventures, the KOSDAQ is the organization in charge of the middle market. In particular, Korea's Tech Exchange was the world's first open innovation exchange aimed at selling intellectual property rights and mergers and acquisitions (M&A). China's technology exchange, which benchmarked us, has grown to become the most active M&A exchange outside of the United States.

In addition, a Venture Leaders Club was created as a communication channel between ventures, finance, media, and government, and an incubator was established.

01. Laboratory Startup Movement

"Let's create one venture company in every university laboratory."

Lab-Venture was a 'Knowledge Saemaul Movement' that activated the start-ups of professors and researchers by holding start-up roadshows. The goal was to foster one venture for every laboratory in a university, leading to the creation of more than 5,000 ventures per year. The idea was to promote entrepreneurship among professors and master's and doctoral students who work in universities and research institutes, which comprise more than 70% of the country's outstanding technical talent, and to give students a vision for their own ventures. The emphasis was on professors and masters and doctoral students.

The roots of Korea's current status as a venture-advanced country were laid in the University Laboratory. September 1, 1998 was the starting point for making university laboratories into the incubators of venture companies. The Venture Business Association officially raised the flag of the 'Lab-Venture' campaign, which was promoted as part of the 'Brain Power' action program, on this day. The launching ceremony of the '1 Lab 1 Startup' campaign was held at the New Engineering Building of Seoul National University.

The '1 Lab 1 Startup' campaign was jointly promoted by the Venture Business Association, the National Association of Engineering Colleges and Universities, the Small and Medium Business Corporation, the Technology Credit Guarantee Fund, and the Daily Economic Times to create conditions for university professors and researchers who possess more than 70 percent of advanced technical personnel at the master's and doctoral levels to start their own ventures. At the event, SNU Precision and Innostech, two laboratory ventures founded by SNU professors and students, were introduced in detail about their start-up, technology development, and commercialization processes. The attendees watched with bated breath. The deans and professors of the College of Engineering who participated in the event predicted that the '1 Lab, 1 Startup' campaign will significantly change the landscape of universities that have been complacent in their laboratories.

However, there were some people on the university scene who weren't so sure. "Why are you a businessman in a sacred ivory tower?" was the cry from the faculty community. From the perspective of a professor or scholar studying the humanities, it was difficult to tolerate. The Gwanak Tax Office, where Seoul National University is located, also repeatedly refused to register the business, saying, "It doesn't make sense to start a business inside a school.

Despite these difficulties, the Venture Business Association embarked on a major campaign of venture startup roadshows to spread the spirit of venture and induce venture startups. Starting with the inauguration ceremony at Seoul National University on September 1, the '1 Lab 1 Startup' campaign was held at 11 universities until November of that year. Along with this, they also held venture startup lectures. On September 22, the campaign was held at Chosun University, followed by lectures at Yonsei University Wonju Campus on September 24 and Yonsei University Seoul Campus on September 25. On September 28, we held a campaign at Chonbuk National University, October 1 at Kyungpook National University and Dankook University, and on October 15, we held a lecture for professors at Gwangju Institute of Science and Technology.

On October 16, he gave a lecture at the Korea Information Processing Society, followed by a campaign at Ulsan National University on October 21, a campaign at Chonnam National University and Gwangju Institute of Science and Technology on October 27, and a lecture at Chungnam National University and KAIST on October 28. On Oct. 29, Jeju National University held a campaign, followed by Korea University on Nov. 3, a lecture at Seoul National University's Department of Electronics on Nov. 4, and Korea Aerospace University on Nov. 24. It is estimated that more than 2,000 university students nationwide participated in the venture startup roadshow.

The '1 Lab, 1 Startup' campaign has led to the creation of 'laboratory ventures', which are ventures within universities. In fact, according to a survey of major universities nationwide by the Korea Economic Daily, there were more than 60 cases of professors starting their own companies as of the end of September 1999. According to the Small and Medium Business Administration, there were more than 100 'laboratory ventures' in the same period.

The 'laboratory ventures' were operated in such a way that professors provided technical and management advice with a partial equity investment, while master's and doctoral students were in charge of company management. A representative example was Visionnet, founded in July 1999 by Professor Youngbin Kwon of Chung-Ang University's Department of Computer Science. With a capital of 26 million won, Prof. Kwon commercialized a technology that recognizes architectural drawings and converts them into automatic files. Four fellow professors, including Kwon, participated as shareholders, and doctoral students served as representatives.

The way the company operates has also evolved. The number of professors taking on the role of president began to increase significantly. Song Dong-ho, a professor of computer science at the College of Aeronautics, founded Softonet in August 1999 and listed himself as the CEO. Within a month of its establishment, the company had exported its educational software technology to a Finnish company, with an export value of $250,000.

Professors Jinho Choi and Yong Sang Park of the Department of Chemistry at Seoul National University also started a biotech venture, Medicorux, to commercialize the gene therapy delivery system technology they developed. As the company's president, Choi became the first professor and venture capitalist at Seoul National University. Professors' participation in company management has become a trend. Anam Media, a laboratory venture at Korea University, is also headed by Professor Seok-Ki Kim of the Department of Electronics, and Professor Hyun Kim of Chonnam National University's Department of Biotechnology is the head of BioPia.

'Laboratory ventures' have spread from the center of science and technology to various fields. The economic and business fields were represented. Professors Lee Sang-bin and Kim Myung-jik of Hanyang University's School of Commerce and Economics founded IIT, a risk management software company for the financial industry, and Prof. Heo Soon-young of KAIST's Graduate School of Techno-Business developed a financial asset management solution and operated Synergy Consulting Group. Professor Hong Jeong-hwa of Inje University founded IPNC to provide food safety management services, and Professor Kim Chul of Kwangwoon University's Department of Mathematics started a computer password and security business using mathematical algorithms. As biotechnology emerged as a promising field, many professors in biotechnology-related departments at medical and natural universities started their own businesses. 'Neurotech', founded by six professors from Ajou University Medical School, including Professor Kwak Byung-sun, 'Macrogen', founded by Professor Seo Jung-sun of Seoul National University Medical School, and 'ABI', founded by Professor Kim Woo-hyun of Chonbuk National University Medical School, came out one after another.

The enthusiasm for venture startups that started in laboratories has spread to university students as well as professors and master's and doctoral students who are excellent technical personnel. In particular, the IMF (International Monetary Fund) bailout crisis and the unemployment crisis served as a catalyst to increase university students' interest in starting a business. By the end of 1998, there were more than 90 active university student venture clubs nationwide. Venture clubs, which were unfamiliar two or three years ago, have become mainstream clubs at universities. Dozens of venture companies, such as Internet integrated call service (Jcamp at Kyunghee University), voice communication software (Ifcomtech at Sungsil University), Internet mud game (Codinet at Sogang University), and 3D scanner (Inner Tech at Pusan National University), were born out of university clubs.

The increase in venture clubs has led to the emergence of venture networks. The Korea University Student Venture Startup Research Association (KVC) is an alliance of 22 university clubs nationwide. The KVC includes the Korea Advanced Institute of Science and Technology, Seoul National University, Yonsei University, Korea University, Kyung Hee University, Chonnam National University, Kyungpook National University, and Sogang University. They organized nationwide startup competitions and venture roadshows (investment briefings). In addition, the government created and supported a startup support center to foster venture companies.

Lack of interest from professors and researchers and complicated business registration and financing hindered 'lab ventures'. A typical example was the evaluation system. Venture creation was not reflected in the evaluation of professors or lab directors. Papers, project performance, patents, etc. could be evaluated, but startups were not. Lee Min-hwa, chairman of the Venture Business Association, took the initiative to change this contradiction. At the urging of Lee, who was also a member of the Regulatory Reform Commission at the time, startup performance began to be reflected in professors' evaluations, and the government began to reflect startup performance in the evaluation of universities and research institutes.

Administrative regulations were also a problem: It was not easy to register a laboratory venture as a business with the competent tax office. Business registrations were issued only upon the recommendation of the heads of laboratories in schools and research institutes. Raising funds was also a challenge. Most of the 'lab ventures' were in the idea stage, not the finished product stage, so it was not easy to raise startup funds.

Military service was also a major obstacle for researchers. To solve the problem of military service, it was necessary to allow Ph.D. professional researchers who were already exempted from military service to start their own companies, and to exempt the president and research staff from military service if the winners of interlaboratory startup competitions or national competitions started their own companies. This problem was solved in 2000 by applying military service exemptions to Ph.D. graduate students working in companies started by university professors or researchers.

The key to the revitalization of laboratory ventures was to allow professors and researchers to hold dual positions as employees of the ventures. Professors who would lead the startup were restricted by the prohibition on dual jobs in the National Civil Service Act. In developed countries such as the U.S., universities encouraged participation in startups through profit realization early on, both in private and national universities.

The Venture Business Association prepared Article 16, Paragraph 2 (Special Provisions for Researchers to Hold Part-Time or Dual Positions) of the Amendment to the Special Act on Fostering Venture Businesses by the Regulatory Reform Commission to allow dual positions. This is because it is necessary to provide grounds for professors and researchers to hold dual positions as employees of venture companies to encourage venture startups.

A forum was organized to overcome these obstacles. On July 22, 1998, a luncheon meeting was held at the Blue House for small and medium-sized enterprises. At this meeting, President Kim Dae-jung promised to actively support venture startups and instructed the administration to do so. However, when the relevant law was revised in 1998, the Ministry of the Public Administration opposed dual jobs, citing the leave of absence system. They argued that the National Civil Service Act prohibits civil servants from engaging in commercial businesses outside of their official duties, and that a leave of absence system had already been introduced.

The Venture Business Association pushed hard to allow dual positions, arguing that the leave system for professors and researchers does not lead to actual startups due to the fear of reinstatement. They argued that it would not be equitable to allow professors from private universities to hold dual positions while only professors from public universities are prohibited from holding dual positions. Eventually, the Ministry of Education, the Ministry of Public Administration and Self-Governance, and the Ministry of Trade, Industry and Energy agreed to allow dual positions in the Venture Business Act.

The government has also started to support 'laboratory ventures' with open arms. In 1999, the government quickly implemented the resolutions of the Regulatory Reform Commission to promote laboratory ventures. This was a follow-up to the December 1998 and April 1999 amendments to the Special Measures for Fostering Venture Businesses Act and its implementing regulations.

According to the law, prospective founders can receive venture company confirmation if they are evaluated as having technical and business potential at the pre-founding stage. Prospective entrepreneurs who are evaluated as having excellent business and technical potential by a venture company evaluation agency can establish a venture company after receiving a preliminary venture company confirmation from the local SMBA. In this case, the minimum capital required to establish a venture is 20 million won. Even though the Commercial Act stipulates a minimum capital of 50 million won, it was lowered to 20 million won for venture companies. The law also allows factory registration for 'laboratory factories' that are installed in research facilities owned by universities or research institutes. Professors and researchers can apply for factory registration with the city, county, or district after obtaining approval from the head of their institution.

It also allowed professors and researchers to start a venture or hold a dual position in a venture while still in their current position. The door was opened for professors and researchers to participate in management if they received permission from the head of their institution to serve as a representative or employee of the venture. This was not the only change: stock options, which were only available to company employees, were expanded to include outside experts and universities and research institutions. Professors and researchers, as well as licensed lawyers, certified public accountants, patent attorneys, tax accountants, business advisors, technical advisors, and university research organizations were eligible. This led to a rapid increase in the number of 'lab ventures'.

The 'lab startup' movement was in full swing in the second half of 1998, during the economic crisis, and it played a major role in reviving the economy. It provided economic vitality by connecting the atmosphere of startups to actual startups. In that sense, it is understandable to call it the 'Knowledge Saemaul Movement'.

02. Collecting Venture Gold and Saving 'Hangeul'

On June 15, 1998, a memorable press conference was held at the Lotte Hotel for Korean venture firms. Lee Chan-jin, president of Hangeul and Computer, and Kim Jae-min, president of Microsoft Korea, stood side by side and announced that Microsoft had agreed to invest $10 to $20 million in Hangeul in exchange for abandoning the business. Hangeul Computer, famous for its Hangeul, was effectively sold to Microsoft. The abandonment of Daewoo Hangeul marked the end of the "Hancom myth," a symbol of Korean ventures, and meant that four million Daewoo Hangeul users would have to buy and learn to use Microsoft's word processor.

"Due to the economic crisis and piracy, we were unable to recover our reinvestment costs, making it difficult to continue our business," said Lee Chan-jin, president of Hancom, "so we decided to seek foreign investment from Microsoft.

Although Hancom announced that it would abandon the Daewoo Hangul business but continue to sell Daewoo Hangul products and provide technical support so that existing customers would not be inconvenienced, it agreed not to release a new version of Daewoo Hangul after 'Daewoo Hangul 97', effectively making Daewoo Hangul disappear. However, on July 20, a little over a month later, Lee broke off the agreement with Microsoft and announced a campaign to save the language, saying, "Let's save our word processor.

The shock of Haewa Hangul's departure, which opened up the possibility of venture Korea, was great. 'It's worse than losing to Mexico in the World Cup,' they said, 'We should have kept the writing, even if it meant closing the company. 'It's not a bad thing that a foreign giant wants to invest in Korea because the world is expanding into a single market and we need foreign currency,' said some. As the only indigenous word processor left in the world after the collapse of the Japanese market in 1997, Hangeul was considered a source of pride for South Korea, and the cultural pride of not being able to hand over Hangeul to another country led to a 'mental breakdown'.

The collapse of the program was blamed not only on market shrinkage, piracy, and unfair trade, but also on the lack of management skills of Lee Chan-jin and the government. It was also pointed out that the program was not supported by upgrades, so users turned away from it, and it was relatively expensive compared to other programs. In addition to market misjudgments and management problems, some pointed to Lee's political activities instead of focusing on his business, and pointed to discord among Hangeul developers. "Hancom has been glorified by the national sentiment that it is a representative venture of Korea, while the quality of its products has declined," said one critic.

Nevertheless, many viewed market shrinkage and piracy as the main reasons for the downfall. In 1998, PC sales dropped to one-third of the previous year's level, collapsing the entire PC, peripheral, and software industries. Rampant piracy has locked genuine copies of Hangeul in warehouses. There have been claims that the more than 3 million users of Daewoo Hangul who are not using the genuine version could be saved if they pay an annual fee of 10,000 won for a free upgrade for one year.

Under these circumstances, the Venture Business Association calculated that the sale of Hancom would be a national loss of more than 1 trillion won, and launched a campaign to save Hangeul on June 18, 2016. The Venture Business Association issued a statement saying, "MS's unfair trade is destroying consumer choice, and the damage amounted to 1 trillion won," and suggested, "Let's organize a nationwide movement to save Hancom." The slogan was 'From Hangeul to the Internet. This emphasized the value of writing as the basis for the future internet revolution. To this end, the association suggested that users of Hangeul bet 10,000 won to save the company.

The association also urged the government to purchase and install genuine versions of Daewoo Hangeul on PCs in each institution, eradicate piracy, and take a firm policy against unfair trade practices such as free distribution of Microsoft's software in order to maintain a fair trade order. On June 22, the Venture Business Association, along with 15 other organizations including the Hangul Institute, set up a campaign headquarters to protect Hangeul and began full-scale activities.

Some people had negative opinions about the campaign to save Hancom. "Even if Hancom disappears, a new domestic word will be born," and "There is no need to stop the suicide of writing to save the product of a weak businessman."

In the midst of this mess, MS debated whether or not to invest in Hancom, and Hancom tried to save itself by searching for a new president. The search for a new president was held until July 24, and 30 people applied. On the 26th, three candidates were interviewed and narrowed down to two, and by 12 o'clock that day, Geoworld President Hajin Jeon was elected as the new boss. At the time, it was said that "Lee You-Jae, who competed until the end, stood out for his various ideas for Hancom's new development plan, ability to cope with situations and marketing ability, while Jeon Hajin's deep understanding of the software industry and sense of internationalization as a venture capitalist stood out as strengths." Mr. Lee You-Jae, who was also a contender, will join Hancom as an outside director.

As the new head of Hancom, President Jeon Hajin launched the 'Hangeul Soft 1 Million Member Recruitment Campaign' on August 15 of that year, offering an annual membership fee of 10,000 won and a genuine license. Hancom members were offered the following benefits: Hangeul 8.15, a free email address and homepage space, free software for public use, and low-cost commercial software.

While Hancom's internal initiatives were taking their own measures and offering 'carrots' to computer users, there was a big support group waiting for them outside: the 'Movement Headquarters for the Defense of Hangeul' (headed by Lee Min-hwa, head of the Venture Business Association) organized a 10,000 won donation drive for the defense of Hangeul. In addition, software companies and organizations claiming to be alternatives to Hangeul issued statements and fundraising campaigns through newspaper advertisements. Many of these companies were experts who had participated in the development of Hangeul, distributors of Hangeul, and companies with close ties to Hangeul.

Heung-ho Park, president of Namo Interactive, who has been actively involved in the development of Hangeul since its establishment in 1990, has been in close contact with Hangeul's developers and related companies. Mr. Park declared that he would either organize a fundraising campaign to save Daewoo Hangeul and block the final contract between Microsoft and Hancom, or develop a new domestic word processor using his past experience in developing Daewoo Hangeul. In particular, he estimated that the development of an independent new product would cost 2 billion won, of which 1 billion won would be raised by the company alone or from multiple investors, while the remaining 1 billion won would be raised by the government.

Bit Information Technology, the distributor of DUAH Hangul, also joined the effort to save DUAH Hangul. President Lee Jong-hoon of Bit Information Technology took out full-page advertisements in daily newspapers and issued an appeal to the public under the name of the National Movement to Save Hangeul. In the appeal, Lee said, "Even if Hangeul Computer Company disappears, 'Hangeul' must be saved," and added, "Let's gather the power of people who love Hangeul and reject the contract with Microsoft." He said that he plans to organize the 'Hangeul National Movement to Save Hangeul' and appeal through the media, the Internet, and PC communications in various ways, and appealed to people to participate in raising advertising funds. In addition, Watso Telecom, which has been supplying mice and keyboards to Hankook Computer, has also taken the lead in the 'Save Hangeul' campaign.

On the other hand, after Hancom's declaration to abandon the writing, there were many articles opposing and protesting the decision and appealing to join the fundraising campaign, and signature drives were also widely spread. The movement to save Hangeul, which began with fundraisers, signature drives, and public appeals, led to a movement to use genuine software. It expanded into a national movement to save the domestic software industry. As the movement spread, the government also stepped in. The Ministry of Culture, Sports, and Tourism took center stage and began a review to find a way to revive the industry.

The Save Hangeul movement, united by patriotism, grew in strength day by day. Within two months of the movement, 500,000 shares of Hancom stock were distributed to members, and the movement to use genuine software was the "CPR" that saved Hancom.

In particular, the prosecution's massive crackdown on pirated products that began in April 1999 was decisive.

Governments and corporations purchased genuine Daewoo Hangul and reinstalled the program. As a result, Hancom's sales increased from 3.5 billion won in January-March 1999 to 14.4 billion won in April-June. The New York Times reported at the time that "Hancom, which nearly fell into the hands of Microsoft Corp. in the U.S. due to a bankruptcy crisis, has made a comeback and grown to become Asia's largest Internet service company." Since August 1998, Hancom has sold more than 700,000 genuine articles for 10,000 won. The 7 billion won raised became the seed of Hancom's revitalization. Sales increased sixfold from 3 billion won in the first half of 1998 to 17.9 billion won in the first half of 1999. The market value of the capital stock, which was 4 billion won, became 200 billion won thanks to the opening of the KOSDAQ market. Hancom began its Internet business in earnest by offering the 'Net Peace' service, which arranges office space for individual members on the Internet Hancom site.

The Save Hancom Movement marked a turning point for Hancom as a second startup, with patriotism at the center of its power. In addition to revitalizing Hancom, the Save Hancom movement also achieved the goal of spreading genuine usage.

03. Internet Korea and the movement to train 100,000 webmasters

In July 1998, the Venture Business Association proposed a Korean version of the Hoover Dam Project to the government.

It was a policy to improve Korea's national competitiveness by utilizing the global 'Internet economy' centered in the United States and to solve the problem of college graduate unemployment. It was the 'Internet Korea' project, a new paradigm for overcoming the IMF (International Monetary Fund) economic crisis. It was an initiative to change the economic paradigm beyond just creating jobs.

It was to transplant the paradigm of social indirect capital construction, such as building dams and roads during the Great Depression, to the knowledge society. The 'Internet Korea' project was a way to accelerate national informatization while absorbing the most serious unemployment problem, the advanced brains of college graduates. Specifically, the project was to train 100,000 unemployed college graduates as webmasters and entrust them with the task of creating and maintaining the websites of 1 million sole proprietors and 100,000 small and medium-sized enterprises. It was also a project to create a new market based on information technology by laying the Internet throughout Korea.

To do this, the project was to create homepages for all companies and individuals, connect them to the cyber market, and create companies that processed the information in the cyber market to create new added value. In addition, it was necessary to develop a telecommunications network to support this and to build web TV and digital satellites as infrastructure. This is the gist of the 'Internet Korea' project.

The goal of the Internet Korea project was to establish Korea as a leading country in the new network economy, the economy of connectivity, catalyzed by the Internet. The core concept was to create an 'Internet market economy' based on the online exchange of product information, which would reorganize the unemployed workforce. This was to reorganize the unemployed workforce to form a human resource infrastructure and create direct employment through the website construction project.

The 'Internet Korea' project was to be implemented in three phases.

In the first phase, 100,000 pure manufacturers will be targeted to create a basic infrastructure through homepage construction to induce the creation of new distributors on a pilot basis. The second phase is to create websites for all manufacturers, including service businesses. About 3 million businesses will be targeted. The second phase is the activation of new distributors and the initial establishment of internet capitalism. The third stage is to spread the use of the Internet across the country. The idea is to realize internet capitalism through homepages. In the 'Internet Korea' project, the homepage is not just a promotional tool, but a means of connecting the results of a company's activities with the outside world and a foundation for the network economy.

The Venture Business Association's specific business proposal for 'Internet Korea' was as follows. It was to invest a total budget of 10 billion won in web hosting companies and production companies participating in the 1 company, 1 homepage, 1 lab, 1 homepage construction project to create 100,000 homepages. That's 100,000 won per manufacturer. If the production support is provided for 3 million homepages in the second phase, competition among webpage producers will be formed, and the promotion and production of basic infrastructure will be carried out at the private level. By organizing the content infrastructure through the second phase of government investment, it is possible to trigger the startup of new distributors.

There are prerequisites for the 'Internet Korea' project. There are two prerequisites for the 'Internet Korea' project: organizing a consortium to implement the project and creating the 'Internet Korea' label. The government can provide legal support through the Information Society Promotion Committee, chaired by the Prime Minister, and provide the necessary information through the Korea Information Society Project website.

The 'Internet Korea' label is a symbol that certifies that a website qualifies as basic infrastructure. Each website can display the label on its own website when it meets the requirements, which is done by the Internet Korea Consortium. The consortium will need to develop the label and create new distributors so that it can be a useful marker for future changes in the Internet.

The 'Internet Korea' project is ultimately to mass produce new distributors. The basic infrastructure for new distributors is the one company, one homepage, one lab, one homepage movement, but various legal and technical support is needed to get on track. In addition, guidance and fostering of new distributors is needed by continuously holding startup fairs and business briefings.

The 'Internet Korea' project emphasizes retraining the unemployed and inducing employment as the core of building human infrastructure. The 'Internet Korea' project is also important in terms of securing Internet-related knowledge workers in advance, which will be in short supply when the country transitions to a network-centered economy. A 'technology passport' system should be established to foster human resources. It is a system that manages an individual's career in a detailed and cumulative manner, away from the unrealistic certification system. For example, all records related to an individual's knowledge exchange, donation, and acquisition are recorded in the technology passport in the form of confirmation from related educational institutions or certification organizations. This can be managed electronically and utilized for national-level labor supply. The technology passport system is a new competency certification system for the knowledge society.

The Venture Business Association's 'Internet Korea' project concept was accepted by the Ministry of Information and Communication, and in March of the following year, Minister of Information and Communication Nam Goong-seok reported to President Kim Dae-jung and materialized into the 'Cyber Korea 21' plan. 'Cyber Korea 21' was the government's basic plan for information infrastructure, with a total investment of 28 trillion won, including 17.3 trillion won in private capital, over a four-year period from 1999 to 2002. The idea was to create 1 million jobs and generate 118 trillion won in output by investing 28 trillion won in information infrastructure by 2002.

'Cyber Korea 21' was a plan to connect high-speed periodic networks to 144 currency zones nationwide by 2002, speeding up the Internet usage speed of the general public 100 times faster than in 1999, providing computer and English education to 10 million students, 900,000 civil servants, and 600,000 military personnel, and giving IDs to 10 million citizens to improve their information processing capabilities. It also planned to maximize the efficiency of information distribution among companies and raise the country's global informationization ranking from 22nd to 10th by connecting large companies and small and medium-sized subcontractors operating in eight major industries such as automobiles and electronics through a computerized information network (CALS). Other plans included fostering internet-based industries by creating software towns and expanding e-commerce, and creating new businesses by revitalizing the information and communication device and equipment industry. Of the 28 trillion won required, the government said it would secure 10.7 trillion won from the government budget, while the remaining 17.3 trillion won would be raised by attracting private investors.

The first step of the 'Cyber Korea 21' project was the '100,000 Webmaster Training Campaign'. The program was launched by the Venture Business Association as one of the alternatives to establish an internet infrastructure in the knowledge information society. At the beginning of 1998, there were 300,000 unemployed college graduates, and the plan was to train 100,000 of them as webmasters to create and maintain the homepages of 1 million sole proprietors and 100,000 small and medium-sized enterprises. This is more than the construction of highways and railroads by the state in the past industrial society. It was a groundbreaking proposal that would not only transform the country into a knowledge information society, but also eliminate unemployment.

At the time, the association estimated that supporting each webmaster for six months at 600,000 won per month would cost about 3.6 million won per person, and supporting 100,000 webmasters would cost 3,600 billion won per year. However, the added value they would create would be at least 50 million won per six months, considering that venture companies cost at least 100 million won per person per year. Moreover, the value added by webmasters to businesses by establishing internet homepages was expected to be even greater.

Based on these policy proposals, the Ministry of Information and Communication led the spread of PCs and the Internet, the foundation of the Internet economy, through a program called Cyber Korea. Hanaro Telecommunications introduced an unconventional pricing plan based on Korea's apartment culture, which led to a proliferation of PCs in Korea that is unprecedented in the world. Network equipment companies, such as HANA Systems and Dasan Network, began to flourish.

Korea also became the world leader in the development of internet games based on PCCs. Network game companies such as Kim Jeong-joo's Nexon and Na Sung-gyun's Neowiz, founded by KAIST alumni, began to establish themselves. Ncsoft, led by former Hancom CEO Kim Taek-jin, introduced the world's first three-dimensional network game, Lineage, and Kim Bum-soo's Hangame also emerged.

Portals, the core of the Internet economy, also made a splash. In response to the entry of Yahoo and Lycos into Korea, indigenous portals such as Lee Hae-jin's Naver and Lee Jae-woong's Daum were introduced. These portals were media, advertising, marketplaces, and information sharing centers. This was a difficult business for Korea's existing offline giants to comprehend. Then came online retailers such as Auction and Interpark (these companies are valued in the trillions of won).

However, these internet businesses had few revenue models in the beginning. They only became profitable when they crossed a certain threshold. In the U.S., the Nasdaq acted as a capital-raising window, allowing giants like Yahoo, Microsoft, Amazon, and Cisco to be born. Japan has not had such an emerging investment market and has been slow to adapt to the internet economy. In neither the U.S., Japan, nor Europe have traditional brick-and-mortar conglomerates successfully entered the new economy. The two main infrastructures of the new economy are youth entrepreneurship and the existence of venture investment markets.

Korea was fortunate to have prepared two venture incubation infrastructures, the KOSDAQ and the Venture Business Special Act, before the IMF crisis. At the time, KOSDAQ allowed loss-making companies to list on the market, allowing them to go public through auctions and follow-on offerings. With this funding, young companies were able to overcome Amazon and Yahoo with their entrepreneurial spirit.

The "Internet Korea" movement contributed significantly to the creation of an internet-based market economy. It was the first time the Korean economy surpassed Japan's for the first time. By 2000, Korea was at the forefront of the global Internet economy, thanks to the rapid development of the Internet industry. The "Internet Korea" movement was the Korean version of the Hoover Dam Project.