Financial Services Commission chairman Shin Je-yoon said Monday that the Korea New Exchange will lay the foundation for the development of a “creative economy” in Korea where start-ups and small and medium enterprises can grow without the fear of financial failure.

In a speech to celebrate the opening of the KONEX, the FSC chief said the new stock exchange will help form a new market paradigm that can lead anyone to come up with creative ideas and secure investments for business.

The KONEX will further bridge the gap between venture entrepreneurs and investors, and boost the circulation of capital allowing start-ups to use the investments for expansion and investors to retrieve and reinvest in new emerging tech companies.

This so-called venture eco-system will “put forth buds in (the Korean) Death Valley,” the FSC chairman said.

Korea’s start-up industry is often referred to as Death Valley as opposed to Silicon Valley in the U.S., as most domestic start-ups fail to attract investment.

But the government aims to change this through the KONEX and help start-ups tap a combination of investments and policy loans or funds.

Korea also seeks to encourage angel investments and crowdfunding for early-stage start-ups before listing on the new exchange.

FSC chief asked the public and the market to be patient in seeing the KONEX fully establish itself in the Korean financial industry.

He said he was aware of rising doubts and concerns the market has over the new stock exchange, but exemplified that there were only about 10 small companies listed on the Alternative Investment Market of the London Stock Exchange when it launched in 1995.

Currently, there are over 1,000 companies listed on the AIM.

Shin said the government will fully support the KONEX to become successful enough to serve as a benchmark for other economies.

By Park Hyong-ki (hkp@heraldcorp.com)