An Underlying Mechanism Of Government Policy & Social Support On The Facilitation Of Startup Business

A high unemployment rate along with a decrease in employment have been a worldwide trend due to a global recession & economic growth without employment increased.In order to resolve the issue,countries have adopted varying multi-directional policies & invested tremendous amount of money.Among various polices,facilitating the foundation of startup companies has universally received attention from the government & emerged as a major national economic policy.Government policy support for the foundation of startup companies can help new venture startups enter into a new market,expand market size,&increase an employment rate,eventually resulting in economic revitalization.Especially,Korea is under a challenging situation not just because of the economic growth without an employment increase but also because of a low birth rate & aging society.Given the current Korean situation,government policy that emphasizes nurturing small venture businesses & stimulating startup company activities can be considered an important solution to create jobs &resolve young adults' un-employment issue.The current Moon Jae-in government launched in May 2017 has been placing an emphasis on economic policies & treated potential job creation as a most urgent task.The government has declared that it would significantly strengthen support for startup businesses & expand the scope of its support to include small & medium-sized businesses(The Money Today,2017).However,despite the government's increased policy support,budget,& policy-related programs,social support for startup businesses has not been reached to a significant level that can invigorate active startup activities.Both societal support & the government policy support largely play an important role in stimulating startups.There are many underlying factors that affect the facilitation of new startup businesses such as personal background,personality for positivity thinking,societal support encouraging startups,& governmental policy support.To have an expected result,all of these factors should be aligned well with a balance.In this regard,the current research empirically analyzed the impact of government policy & societal support on the facilitation of startup businesses.Building on previous research related to Korean government policy support of startup business,entrepreneurship,social support,the process of startup business,research hypotheses were proposed.To investigate the research hypotheses,an empirical survey study was conducted with a sample of potential entrepreneurs.Using a structural equation modeling,the current study identified the impact of Korean government policy & societal support on the facilitation of startup business.The analysis results are summarized as follows.First,the Korean government policy support for startups has a significant effect on the startup process.Second,societal support has a significant effect on a startup process.Third,the startup process has a significant effect on the startup activity.Fourth,societal support does not have a significant effect on the startup activity.Fifth,the Korean government policy support for startups does not have a significant effect on the startup activity.In sum,government policy & societal support for startup businesses had significant effects on the start-up process & in turn the start-up process significantly affected start-up activity.However,government policy & societal support did not have a direct effect on actual start-up activities.This indicates that either government policy support or societal support alone cannot have meaningful direct impacts on actual start-up activities.With societal support &government policy support for startups,entrepreneurs may be motivated with stronger entrepreneurship in the process of startups,& in turn,related startup activities will be likely to increase.It is thus important to nurture & encourage potential entrepreneurs to have startup efficacy & entrepreneurship.All in all,only when startup business is encouraged at a societal level with proper government policy & social support in balance,the facilitation of startup business can be obtained.