'Talent over patents': Survey finds shifting growth drivers for venture firms

Securing talented employees matters more than acquiring patents or other intellectual property rights for venture companies in their early growth stages, a new survey has found. Knowledge-service ventures in software and information technology placed particularly high value on talent acquisition — significantly more so than their manufacturing counterparts.

According to a report released Wednesday by the Korea Institute for Small and Medium Enterprises and Startups, talent acquisition scored 4.400 out of 5 points among knowledge-service ventures, ranking third out of nine categories for capabilities that aided early growth. Intellectual property acquisition — covering patents and trademarks — scored 4.070 points, placing last at ninth.

The survey, conducted in October last year, covered 333 venture companies — 100 in knowledge-service industries and 233 in manufacturing. Respondents rated capabilities that contributed to sales and employment growth during their firms' early stages.

The top-rated capability among knowledge-service ventures was product and service quality (4.440 points), followed by product and service scarcity (4.430 points), talent acquisition (4.400 points) and R&D investment (4.320 points).

Manufacturing ventures showed a different pattern. Quality (4.545 points) and scarcity (4.485 points) again ranked first and second, but R&D investment (4.455 points) came in third. Intellectual property acquisition (4.250 points) ranked fifth, and talent acquisition (4.240 points) sixth.

The institute attributed the divergence to fundamental differences in business structure between the two sectors. "Manufacturing relies on production facilities, technology development and product competitiveness, whereas knowledge-service companies operate on the basis of intangible assets such as software, algorithms and data," it said. "The capabilities of key personnel and service differentiation have a relatively greater impact on competitiveness in that sector."

Similar results emerged in deep tech fields including AI, biotech and healthcare, cloud and robotics. Among knowledge-service deep tech firms, product and service scarcity ranked first (4.466 points), followed by quality (4.452 points), talent acquisition (4.438 points) and R&D investment (4.356 points).

The institute recommended expanding support policies beyond the existing technology-development focus to better reflect the growth characteristics of knowledge-service ventures. It also proposed subsidizing the initial transition costs when experienced professionals move to venture companies, and combining that support with stock option tax incentives to attract top talent and encourage long-term retention.

In addition, the institute said support should go beyond intellectual property acquisition to encompass service design, customer experience, design and standardization. "A policy approach that considers quality, differentiation, talent and customer experience together is needed to support the early growth of knowledge-service venture companies," it said.