South Korea is seeking to strengthen its position in global technology by expanding startup activity beyond Seoul. The Ministry of SMEs and Startups has named Daejeon, Gwangju, Ulsan and Daegu as the country’s first Startup Cities, each with a distinct focus and development model.
The initiative was highlighted during 2026 Startup Korea Investment Week, which connected South Korean startups with domestic and international investors. It reflects a broader effort to use the country’s established industrial base, universities and public infrastructure to create companies capable of competing in international markets.
Daejeon is at the centre of the country’s deeptech ecosystem. The city hosts one of South Korea’s 17 Centres for Creative Economy and Innovation, which provide fundraising education, access to venture capital, corporate introductions and tax benefits. The centres are backed by local and national governments and linked to major conglomerates.
The city is also home to KAIST, one of South Korea’s leading science and technology universities. Since changing its governing law in 2022, KAIST has made startup support part of its official mission. The university now produces more than 100 startups annually, while students can take extended leave to build a company and return to their studies later.
Daejeon’s ecosystem benefits from a strong research base: about 70% of Korean patents are registered there. However, the city still faces a major funding challenge. Around 80% of investment money in South Korea is concentrated in Seoul, encouraging companies to relocate to the capital as they grow.
Ulsan is taking a different approach by connecting startups directly with its industrial giants. The south-eastern city is home to companies including Hyundai Motors, HD Hyundai Heavy Industries and SK, as well as major shipbuilding, automotive and petrochemical operations.
Its innovation centre helps startups work with established companies as testbeds, customers and potential markets. The centre runs an open innovation programme focused on shipbuilding with HD Hyundai, Samsung Heavy Industries and Hanwha Ocean. Shipbuilding startups have raised more than 100 billion Korean won since the centre was created, while current corporate priorities include robotics and artificial intelligence.
One example is Diden Robotics, whose four-legged robot can climb ship walls and perform tasks such as welding, painting and grinding. Ulsan is also testing hybrid vessels designed to become fully autonomous, as companies seek ways to address labour shortages and improve industrial efficiency.
Daegu is concentrating on medical technology. The city combines hospitals, electronic health data and state-backed facilities to help startups develop and test new products. Its Daegu-Gyeongbuk Advanced Medical Industry Complex includes centres for drug development, medical devices and preclinical research.
The complex is intended to make testing faster and less expensive by bringing doctors, AI engineers and founders together in shared facilities. It also gives pharmaceutical companies and investors a way to find medical innovation outside Seoul.
Gwangju, meanwhile, is building its ecosystem around artificial intelligence. The National AI Data Centre provides selected companies and universities with computing power, storage and workspace, including access to advanced Nvidia chips. The infrastructure is designed to reduce the cost of training and operating AI models for early-stage companies.
The centre is operated by the Artificial Intelligence Industry Cluster Agency, with support from central and city governments. The agency says companies it has supported have raised 56.3 billion Korean won, and it also operates an investment fund for local AI businesses.
Across the four cities, the strategy relies on combining public investment with universities, large corporations and specialised infrastructure. South Korea’s established companies can provide funding, mentorship, testing environments and potential customers, while regional hubs offer lower costs and access to research and industrial expertise.
The country’s relatively small domestic market means international expansion remains essential. Startup leaders and officials acknowledge that meeting overseas investors or potential customers is not enough on its own. Sustained relationships, international capital and continued engagement will determine whether these regional ecosystems can achieve lasting global relevance.
Sources: Sifted.