The missing link for regional manufacturing startups: Accelerators

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One of the most frequently heard terms in recent regional startup policy is 'local creator.' It is true that startups based on unique regional cultures, content, food and beverages, tourism, and lifestyle brands are injecting new vitality into regional economies. The Ministry of SMEs and Startups' local creator support program records high competition rates every year, and interest in regional branding and local consumption is rapidly increasing.

However, a deeper look into the reality of regional industries reveals that the central axis actually supporting the regional economy remains small and medium-sized enterprises (SMEs) based on manufacturing and materials, parts, and equipment (SoBuJang) companies.

According to the '2023 Survey of Small and Medium Enterprises' (announced in August 2025) by the Ministry of SMEs and Startups, there were approximately 8.3 million SMEs in Korea as of 2023, and a significant portion of these are located outside the Seoul metropolitan area.

Manufacturing, in particular, is very closely linked to the regional industrial ecosystem. Industrial complexes in Busan/Gyeongnam, Daegu/Gyeongbuk, and the Chungcheong region, where automotive parts, industrial equipment, metal processing, chemical materials, and electrical/electronic component companies are concentrated, are essentially the core foundation of the regional economy.

The problem is that when we talk about regional startups, we tend to view these companies as separate entities from the startup ecosystem.

However, regional manufacturing entrepreneurs encountered in the field possess considerable competitiveness. Many of them have established their businesses after gaining 10 to 20 years of field experience in a specific industry, rather than starting a business with just an idea. Key examples include CEOs who founded material companies based on semiconductor process experience, CEOs who started equipment companies after working for a long time in automotive parts production, and CEOs who established special component companies based on their network within regional industrial complexes.

Their strengths are clear. They have a deep understanding of the essence of their industry, accurately identify on-site problems, and have already secured a certain level of customer and supplier networks. Many cases involve creating everything from the initial product development stage to the first sale on their own.

However, the problem arises at the very next stage.

Significant funds are required to mass-produce products, obtain various certifications, enhance technological capabilities, recruit personnel, and expand sales channels. Especially in manufacturing, where costs for prototype production, establishing production processes, and investing in facilities are high, it is difficult to grow solely with operating funds.

At this point, early-stage investment, TIPS (Program for Private Investment-led Technology Startup Support), R&D funds, and government policy funds can open up growth opportunities of a completely different dimension for regional companies. For example, if TIPS and R&D funds are linked with initial investment of around 100 million won, it can lead to a total growth fund of 800 million to 1 billion won. For regional manufacturing company CEOs, this becomes a decisive opportunity to open the 'next door' for their companies.

Yet, many regional companies are unable to even access these opportunities.

This is often because, despite their high understanding of technology and industry, they are unfamiliar with investment attraction strategies, business plan development, market expansion methods, and the terminology and practices prevalent in the startup ecosystem. In particular, entrepreneurs who have operated their businesses mainly in the field for a long time in regional areas struggle to explain their technical strengths in a language that investors can understand. They also have relatively fewer opportunities to receive external feedback and refine their business content compared to those in the Seoul metropolitan area.

This is precisely where the role of accelerators becomes important.

An accelerator is a specialized institution that discovers and invests in early-stage startups, and helps them grow rapidly through business strategy, mentoring, and network connections. However, the original role of an accelerator is not to pick out companies that are already fully prepared for investment. It is to first discover the potential of companies that are not yet ready for investment and then help them grow by jointly designing business strategies, investment stories, and market expansion structures.

In particular, nurturing regional manufacturing companies properly requires more than just program operation capabilities. One must understand the industry structure, be able to interpret technology, grasp the flow of supply chains and markets, and be able to connect with government policy funds and the venture investment ecosystem. Ultimately, accelerating regional manufacturing companies requires much higher expertise and much more effort.

However, in reality, many accelerators tend to prefer IT startups in the Seoul metropolitan area that are already well-prepared for investment. Opportunities are concentrated on young startup teams that understand things quickly and companies that can create rapid growth stories. On the other hand, regional manufacturing companies require direct factory visits, understanding of production processes, and studying the industry itself. It requires significantly more time and effort.

Therefore, it is not that there are no companies to invest in within the regions, but rather that there is often a lack of accelerating capabilities to discover companies, refine them together, and grow them into a form that can attract investment.

What regions need now are not organizations that merely accumulate program operation performance. They need organizations that go directly to industrial complexes, redesign business strategies from scratch with the CEOs, and connect them to investment and policy funds until the end. And accelerators that actually perform these roles should be followed by clearer compensation and policy support.

Regional manufacturing companies are much stronger than you think. It's just that there was a lack of someone to connect their potential to the language of the market and investment. And that connection role, ultimately, must be played by accelerators.

By Lee Soon-yeol, CEO of Qnestty, a public interest NGO for impact investment