Received the ‘Open Innovation Challenger Award’ in recognition of venture development activities through industry-academic research cooperation

POSCO Holdings won the ‘Open Innovation Challenger Award’ at the 2022 CSS Awards* hosted by the ICC (International Chamber of Commerce) on the 6th.
* CSS(Corporate Start-Up Stars) Awards: An event where the ICC (International Chamber of Commerce) selects and awards global companies that have actively promoted collaboration with startups

The CSS Awards began with the European Commission’s ‘Corporate Startup Star Award’ in 2016. It is given to companies that have performed the best activities in Global Open Innovation and Start-up discovery, support, and development among Forbes 2000 and Fortune 500 companies every year.

POSCO Holdings won the ‘Open Innovation Challenger Award’ in recognition of venture development activities through industry-academic cooperation along with its investment amount, expected rate of return, fund size, and excellent investment process in the corporate venture capital sector.

This year, Korean companies including POSCO Holdings, Samsung, Hyundai Motor, LG Electronics, and Industrial Bank of Korea were awarded, and Siemens was selected as the best company and received the grand prize. In addition, many global companies such as Volkswagen, IBM, Coca-Cola, BMW, Honda, Toyota, and ENI (an Italian oil company) were also selected as award-winning companies for their efforts to Open Collaboration through ventures.

Seong-jin Park, Chief of Industry-Academy-Research Cooperation at POSCO Holdings’ Next Experience of Technology Hub attended to receive the award and said, “POSCO was the only company in Korea that established a cooperative system between industry and universities 35 years ago. We have a venture fund system that invests in startups being fostered in the venture valley of POSTECH and RIST, and we are actively supporting the overseas expansion with POSCO International.” He also emphasized, “The POSCO Group’s corporate citizenship management philosophy contains the spirit of the times when Korea is reborn as an innovative country that starts up Korea as an advanced country on the cornerstone of steel-making and education-based countries that have been strengthened over half a century.”

POSCO opened the CHANGeUP GROUND Pohang in July 2021 to establish the world’s best venture ecosystem network. A total of 113 companies moved into CHANGeUP GROUND and their corporate value is 1.5 trillion won. The number of employees is 1,104, contributing to the creation of local jobs. The venture fund invested 287 billion won to form a fund worth about 1.5 trillion won. It invests in 238 domestic companies and 841 overseas companies as a full-cycle fund from seed, growth, strategy, and CVC. The corporate value of 238 companies invested by domestic funds is about 23 trillion won. Earlier this year, POSCO launched the Future Technology Research Laboratory under the holding company system and is actively working to discover new future businesses through convergence between R&D, industry-academic research, and venture.

POSCO plans to expand its venture platform to the United States, Europe, and Asia by utilizing the POSCO Group’s overseas network.

▲ Seong-jin Park (on the right), Chief of Industry-Academy-Research Cooperation at POSCO Holdings’ Next Experience of Technology Hub is taking a commemorative photo at the CSS Awards ceremony in London, United Kingdom on December 6.

POSCO launched CHANGeUP GROUND Seoul in Gangnam-gu last year. After a year, POSCO opened another CHANGeUP GROUND in Pohang in July this year. There are more than 100 companies that are preparing to move into ‘CHANGeUP GROUND Pohang’, and they also dream of becoming unicorn companies that are comparable to Silicon Valley in the United States. The business areas span a wide range of fields. It includes machinery • materials, electrical • electronic • semiconductors, information and communication • software, bio • medical, and chemical • energy • resources. It has a solid technology that is good enough to be responsible for the technological boundary between Korea and the world. Now let’s get to know the details of CHANGeUP GROUND Pohang, the beginning for Another Pacific Valley.

l Take a look at CHANGeUP GROUND with a total area of 28,000 square meters

CHANGeUP GROUND Pohang boasts a scale of seven floors above ground and one basement floor with a total area of 28,000 square meters. It offers startup companies programs that are different from existing startup programs such as research support, investment promotion, and more. It is different in size and facilities from the incubating centers for startups so far. In particular, CHANGeUP GROUND Pohang is operated on different themes and subjects on each floor.

l CHANGeUP GROUND, the background of choosing Pohang as a base

Given its global competitiveness first, POSCO has come to the conclusion that the location is not that important whether it is in the metropolitan area or in Pohang. POSTECH is a strong supporter of CHANGeUP GROUND in AI research that requires novel materials, new drugs, and huge data centers.
In addition, POSTECH’s accumulated research results in science and technology can be important advisors and partners in solving technical problems for tenants of CHANGeUP GROUND.

After all, it is important how much higher the thinking and technology can be connected, and it is important to go one step further and have the infrastructure that can actually be implemented. Through these concerns, it has been concluded that it is optimal to set up a base for CHANGeUP GROUND in Pohang, where POSTECH is located. Pohang is a place that can be a cluster for startups as various infrastructures are already prepared for venture incubating.

The tenant company of the CHANGeUP GROUND aims to be listed not only in Korea but also in global stock markets such as the United States and POSCO has three support systems for this purpose.

①R&D and business space
CHANGeUP GROUND Pohang has a technological infrastructure that is hard to find in other venture incubating programs by utilizing the infrastructure of POSTECH, a world-class research-oriented university, including 3rd and 4th generation radiation accelerators. Through this, existing startup companies are overcoming the reality that they had no choice but to challenge only some modules such as developing new materials, processing big data, and artificial intelligence platforms.

② Completion of financial links
The reason why existing startups could not dream to challenge the global market was that it was not easy to secure funds. In order to provide an opportunity to attract investment in startups and to link with the company’s discovery of new growth projects, POSCO has been continuously investing in venture funds that are managed by excellent venture capitals at home and abroad since 2019. So far, it has invested 225 billion won and raised more than 650 billion won in funds and plans to continue to invest every year to expand the amount of investment.

③Business network support
CHANGeUP GROUND Seoul, which opened last year, and Pohang that opened in July this year, are forming a network of CHANGeUP GROUND regardless of location. In particular, since a startup network secured through the Idea Market Place (IMP) and a business network between domestic and foreign global companies have been formed, global-level cooperation would be possible if the startups have the technologies and business models.

The global growth of startup companies can be seen that they are responsible for the future of the country and region around the world. As Korea’s economic and cultural concentration is gradually deepening in the center of Seoul and the metropolitan area, if the connection between Pohang and Seoul is established and the foundation of the link to become a global company is laid, it will also be able to drive a new corporate growth model for Korea, not only fostering successful unicorn companies.

The reason why the CHANGeUP GROUND is taking on a global challenge under the slogan of ‘Another Pacific Valley’ is also the strong commitment to succeed by widening the gap with other regions by building a new business valley that can compete with the Silicon Valley of the United States.

l Leap into a global venture, Startup Support Program

CHANGeUP GROUND Pohang has various programs for tenant companies to become global ventures. The ‘Startup Support Program’, a venture company support program of CHANGeUP GROUND Pohang, consists of various support programs for these companies to make a substantial leap in four themes: Business Incubation, Market Support, Investment Connection, and Network.

l Efforts to create POSCO venture platform and venture ecosystem

POSCO created a startup ecosystem by utilizing POSCO’s industry-academic infrastructure in the promising field with active venture investment and created a win-win future industrial domain by sensing future promising industries and supporting excellent ventures for new business candidates through venture fund operation. The key is a Venture Valley, a startup ecosystem, and a venture fund for matching and supporting capital, which is promoting growth as a sustainable platform through continuous management and relationships, and discovery and support for subsequent ventures.

Venture Valley
Venture Valley aims to produce 100 POSTECH startups and two unicorn companies every year by 2030. It is expected that it will not only discover outstanding talents and research results and link them to startups, but also contribute to revitalizing the local economy by laying the foundation for discovering new growth engines. To this end, it is creating an environment where a new industry-academic cooperation system establishment, the opening of CHANGeUP GROUND, the establishment of the world’s best startup infrastructure, and POSCO’s Idea Market Place can cooperate in a virtuous circle system.

Venture Fund
In addition to the creation of a Venture Valley, POSCO is making efforts to find venture companies in the promising field and POSCO’s new growth strategy field through investment in venture funds. POSCO plans to operate the venture fund so that it can invest in the full-cycle of venture companies, from seed-stage startups to listed companies, secure profitability and minimize the risk of investment loss by utilizing excellent domestic and foreign operators, and reinvest the recovered funds to keep venture funds running in the long term.

In 2019, POSCO signed an MOU between POSCO – the Ministry of SMEs and Startups and Venture Business – Korean Venture Capital Association to create a cooperative foundation for the creation of venture funds. Since then, it has formed both seed/growth funds that invest in the promising field and strategy/CVC funds that invest intensively in the company’s new growth strategy fields, completing the basic framework of full-cycle investment. POSCO formed a fund worth more than 650 billion won with the approval of 225 billion won in nine funds operated by excellent domestic and foreign management companies, and has invested over 550 billion won in more than 330 domestic and foreign venture companies. POSCO plans to continue to invest in funds every year to expand its pool of excellent investment companies and contribute to strengthening the competitiveness of the group in major promotion projects and creating new growth engines through Value-up activities.

CHANGeUP GROUND, a cradle where startup companies can grow into global companies, will continue to open the doors to much more prospective tenants. Also, it will continue to cooperate and support the companies even after they grow enough to graduate from the startup stage so that they can keep challenging the world through this space. We ask for your interest and anticipation for CHANGeUP GROUND Pohang, the beginning of our dream of creating ‘Another Pacific Valley’ on the west coast, along with Silicon Valley on the east coast of the Pacific Ocean.

To commemorate the opening of the CHANGeUP GROUND Pohang, on July 23rd, Professor William P. Barnett and Professor Hyun-sang Shin gave lectures under the theme of the value and performance of POSCO’s management philosophy, Corporate Citizenship. POSCO Newsroom delivers the lectures in detail!

The next site to visit is the special virtual lecture by Professor Hyun-sang Shin, a professor at Hanyang University Business School and the CEO of Impactree Search Lab, under the theme of ‘Evolution of POSCO: POSCO’s Transformation towards Corporate Citizenship’. Let’s take a look at how POSCO has changed, from the differences between its past and present perspectives on corporate philanthropy to an analysis of its management philosophy of corporate citizenship by looking back on its footprints.

l POSCO’s past, present, and future, “POSCO leaps through time!”: Professor Hyun-sang Shin

In this lecture, Professor Hyun-sang Shin analyzed POSCO’s management philosophy, Corporate Citizenship, by dividing it into three periods – ▲Before privatization ▲Globalization ▲After corporate citizenship declaration – and suggested the future direction.

Before talking about POSCO’s corporate citizenship, he introduced the four viewpoints on corporate philanthropy and explained the differences between the past and the present in each viewpoint. As time goes by, each viewpoint faces limitations. However, he said that corporate citizenship, the last of the four viewpoints and POSCO’s management philosophy, suggests a solution to the limitations arising from the other three viewpoints.

If a company adopts a viewpoint of corporate citizenship for corporate philanthropy, the next thing to consider is what kind of corporate citizenship it will pursue! Professor Hyun-sang Shin shows different types of corporate citizenship based on two familiar examples.

Authoritative corporate citizenship VS Imperfect but truthful and exertive corporate citizenship. Today’s corporate citizenship needs to contemplate which of the two directions it will be heading towards. If it moves towards the direction of imperfect but truthful and exertive corporate citizenship, how will it grow and develop, and how can it be evaluated and get feedback? Professor Hyun-sang Shin’s answers were in the ‘Novel Solutions to Social Problems’ by Professor James Phills of Stanford University.

The evaluation criteria for the cases of corporate citizenship presented by Professor Phills consists of three categories: Intention, Solution, and Performance. Based on this, Professor Hyun-sang Shin gave the analysis result of POSCO’s corporate citizenship by dividing it into three periods: Before privatization, Globalization, and After corporate citizenship declaration.

1. INTENTION: The analysis result of ‘Which problem of whose did you solve?’

To analyze the first criterion, Professor Hyun-sang Shin used W. Richard Scott’s Three Pillars of the Institutional Framework. This framework suggests that society consists of three pillars: Regulative (compliance with the law), Normative (embrace social needs and expectations), and Cognitive (support and appreciation from members, stockholders, and customers/clients). As an organization could collapse without getting resources and legitimacy from each pillar, the balance between the pillars has been emphasized. After corporate citizenship declaration, POSCO is gradually securing the balance between the three pillars with an increase in activities such as supply chain risk management, climate change response, and by-product recycling.

2. SOLUTION: The analysis result of ‘How did you solve the problem?’
In this category, collaboration with partners in corporate philanthropy is increasingly important. POSCO’s corporate philanthropy before privatization was more focused on simple cooperations such as independent projects or charities, and it went through the globalization period when it increased collaborations with some business partners. After the declaration of corporate citizenship, brand collaborations with clients such as INNOVILT and supplier collaborations such as ESG supply chain management and GEM fundraising increased. More collaborations with business partners imply a positive change towards the establishment of a win-win structure.

3. PERFORMANCE: The analysis result of ‘How well did you solve the problem?’

Professor Hyun-sang Shin emphasized the excellent use of the Five-Step Logic Model of Input→Activity→Output→Outcome→Impact to create a desirable change in this category. He explained the logic model by applying it to university students’ free tutoring service to underprivileged students. The input was how much resources the company invested in the university students’ volunteer system, the output was how much time the university students spent on the volunteer service under the company’s investment, and the outcome was whether the university students’ free tutoring service made much improvement in grade and satisfaction of the underprivileged students.

As you can see in the graph, POSCO started to get outcome reports on corporate philanthropy from the time of globalization, and the proportion of the report increased after the declaration of corporate citizenship. Although the increase in outcome implies a fairly positive change, Professor Hyun-sang Shin said that the company is still paying less attention to the outcome compared to the global standard. He suggested POSCO focus more on the outcome for its future development and also emphasized that the outcome should be applied to a solid strategy for business improvement so that the members can truly accept it.

In addition, he said that business outcomes might lead to an unintended way in the changing society and once again highlighted the importance of the authenticity of a company in those situations. The authenticity can be achieved through securing fairness with the balance between the three pillars of Regulative, Normative, and Cognitive, establishing a win-win structure through collaboration with business partners, and expanding outcome reporting into actual strategies in earnest.

POSCO Newsroom’s virtual lecture notes that delivered a meaningful lecture by Professor Hyun-sang Shin, who analyzed POSCO’s history of corporate philanthropy based on the viewpoint of corporate citizenship, ends here! We hope you had a meaningful time learning more about POSCO’s corporate citizenship.

To commemorate the opening of the CHANGeUP GROUND Pohang, on July 23rd, Professor William P. Barnett and Professor Hyun-sang Shin gave lectures under the theme of the value and performance of POSCO’s management philosophy, Corporate Citizenship. POSCO Newsroom delivers the lectures in detail!

The first site to visit is Professor William P. Barnett’s special virtual lecture under the theme of ‘POSCO and Corporate Citizenship: An Evolutionary Perspective’ to commemorate the opening of the CHANGeUP GROUND Pohang. Let’s learn about POSCO’s corporate management from Professor William P. Barnett’s unconventional viewpoint!

l Evolution in Corporate Management, “Learning more about POSCO’s Corporate Citizenship!”

Professor William P. Barnett, together with Professor Jae-goo Kim of Myongji University and Professor Moo-weon Rhee of Yonsei University, conducted joint research on POSCO’s management philosophy, Corporate Citizenship. Professor William P. Barnett mentioned that POSCO, which took corporate citizenship as its management philosophy, can be viewed from an evolutionary perspective by comparing it to the Red Queen Hypothesis. In particular, POSCO is the first company he wants to study as it has preemptively declared corporate citizenship in response to the rapidly rising ESG trend.

The Red Queen? An evolutionary perspective? If you are not sure about the relationship between these unfamiliar words and corporate citizenship, let’s look into the core content of Professor William P. Barnett’s virtual lecture with POSCO Newsroom!

According to Professor William P. Barnett, a company’s development of something new through innovation means that the company’s performance, quality of product, production innovation, and efficiency go up together. When a company becomes powerful in the market, the competitor also increases. Therefore, the company has to continuously innovate and improve its product quality and efficiency to not fall behind the competitors. In other words, competitive companies continue to innovate to stay ahead of their rivals, thereby creating a virtuous evolutionary circle in which innovation causes another innovation.

In an anecdote from Through the Looking-Glass and What Alice Found There, the sequel to Lewis Carroll’s children’s tale Alice’s Adventures in Wonderland, the Red Queen tells Alice that she must keep running to survive in the competition. The Red Queen Hypothesis, taken from this anecdote, explains that competition makes every company on the market stronger.

The most innovative companies have led the virtuous circle of change, and POSCO is at the forefront of the change, leading innovation in the manufacturing and steel industry. POSCO is evolving into a more innovative company by exchanging benefits with its partners as well as competitors.

Most companies attempt innovation with their own motivation. Then, what is POSCO’s motive for innovation, that is to say, the reason for POSCO to innovate?

POSCO is taking ESG (Environmental, Social, and Governance) as its stepping stone for innovation and evolving towards perfect corporate citizenship.
Professor William P. Barnett says that even though many companies took corporate citizenship as their management philosophy, they are not taking concrete measures to implement it. Without practical and concrete measures to achieve corporate citizenship, a better world is just a fantasy. However, POSCO is implementing practical and concrete actions to support its goal of achieving corporate citizenship, he added.

l POSCO positioned itself as a leading ESG management company in the steel industry

POSCO recently announced its three-stage plan to pursue carbon neutrality by 2050. The plan is to reduce carbon emissions by 20% by 2030, 50% by 2040, and finally achieve carbon neutrality by 2050. To this end, POSCO set forth an objective to reduce the existing blast furnace facilities and commercialize the hydrogen-reduction steel facilities by 2050. In particular, it presented a policy to solidify its carbon-neutral position unparalleled in the global steel industry by accelerating the development of HyREX technology.

Many experts predict that challenges and opportunities will coexist in the upcoming era of profound change, and the importance of ESG will be even greater. Then, what is the main content of the ESG business that POSCO is promoting in preparation for the profound change?

POSCO has long been a good example of corporate development and innovation, and the members have also actively participated in its innovation. Many experts were uncertain and skeptical about POSCO’s technical prowess at the time of its establishment. Still, with the unwavering belief of becoming a leader in technological innovation, POSCO has grown into a company walking shoulder-to-shoulder with the world’s greatest corporations. Consequently, the initial vision of POSCO has made what POSCO is today.

Professor William P. Barnett said that it was utterly regrettable to give a lecture virtually as he could not visit the site in person due to the pandemic. In response, POSCO CEO Jeong-woo Choi expressed his gratitude to Professor William P. Barnett for giving a lecture in the evening due to the time difference.

The lecture finished in a warm atmosphere, but is this the end of the Special Symposium on Corporate Citizenship?
Wait! In the next episode, Professor Hyun-sang Shin will be joining us. Let’s continue to look into the core content of Professor Hyun-sang Shin’s virtual lecture!

It has been 3 years since POSCO made a public declaration about its management philosophy, ‘Corporate Citizenship’ with the wish of being a 100-year long company in July 2018. What will be talked about here is: POSCO’s intensive effort and remarkable achievement to follow the philosophy with the Special Symposium for a Path to the Future Management with 3 Years of POSCO Corporate Citizenship, which was held on July 21st.

l Setting Standards for Work-Life Integration with the Declaration of the ‘Corporate Citizenship’

POSCO desired to identify its new culture to make the growth of a 100-year long company earning respect from others while not only sticking to the philosophy ‘Contributing to the Nation with Steel Production’ with a 50-year history but also developing together with interested parties and contributing to the community.

This background drove the company’s proactive declaration of the management philosophy, ‘Corporate Citizenship: Building a Better Future Together’ in 2018. POSCO with its management philosophy, ‘Corporate Citizenship’ – pursuing ‘the value of coexistence’ while growing together across the industry and countries – has reached a stage in its evolution by contributing to the community.

After the declaration, POSCO keeps moving forward with three strategies:
△ Business With POSCO, to create value with customers, suppliers, and business partners
△ Society With POSCO, to shape a better society together,
△ People With POSCO, to nurture company culture of trust and creativity.
Employees engaging in innovation work with ‘the Three Principles’:
△ Pursue quality over formality
△ Pursue action than talk
△ Pursue practical interest rather than finding a cause

In July 2019 – 1 year later – ‘the Charter of Corporate Citizenship’ was declared as a business direction to move forward for the ‘Corporate Citizenship’.

▲ On July 25th 2019, the Charter of Corporate Citizenship was declared in the convention room of Pohang Head Office. The CEO of POSCO Group, Jeong-woo Choi, and the employee representatives are holding hands with each other after the declaration.

The charter concluded by the discussions with advice from internal or external panels and opinions from employees includes practical principles to achieve the POSCO’s Corporate Citizenship. In order to allow the principles to work in every business activity, it sets details for the principle:
△ to create a healthy industrial ecosystem with business partners,
△ to be a leader dealing with social problems and enhancing society,
△ to foster a company culture on trust and creativity to create a place ensuring employees feel valued and happy.

In July 2020, POSCO issued the Corporate Citizenship Management Standards (CCMS) to provide detailed guidelines to call for actions.

▲‘The Corporate Citizenship Management Standards (CCMS)’ were announced on July 28th 2020 as a keymap to keep being on track and reach the ‘Corporate Citizenship’

The Charter of Corporate Citizenship provides the concepts and direction of its management philosophy, ‘Corporate Citizenship’ that the employees should adopt while CCMS suggests a standard on actions and decision making, which helps employees practice and achieve practically for work and life.

l Establishing a new department for the Corporate Citizenship, holding meetings for advisory and strategies

POSCO’s new organization and conference groups established to implement its management philosophy, are leading POSCO in the right direction, playing their roles with responsibility.

In 2019, the internal governance set up a department for the Corporate Citizenship to control action and spread the philosophy more widely. In 2020, it also founded the Environment, Society, Governance Group (ESG) under the Corporate Citizenship department and established a firm foothold. In 2021, the ESG committee was established under the Board of Directors.

As an external advisory organization, the Corporate Citizenship Committee which directly advises the CEO began on March 15th 2019 welcoming its initial members: three external experts from the economic, management, humanities and social science, and law industry, and also seven other directors from inside and outside the company.

▲ The Corporate Citizenship Committee’s first meeting being held on April 8th 2019. Members shared opinions on revising ‘the Charter of Corporate Citizenship’ to inform employees about the importance of Corporate Citizenship to encourage their actions.

A Corporate Citizenship Committee’s meeting is held quarterly to discuss POSCO’s direction, management strategy advice, and suggestions especially regarding Environmental, Social, Governance (ESG) trend changes, and lastly, they review the results from achievement in social value following the plan.

The advisory organization, the Corporate Citizenship Advisory Conference, that began this year, gives direct advice to the CEO. It also consists of three additional experts in safety, environment, and organizational culture to provide more ESG related advice. The organization takes suggestions about industrial safety, health, and ESG business management strategies over its current assignment.

▲ The first half of the strategy meeting of the Corporate Citizenship held on April 16th, POSCO’s directors, the presidential boards, the heads of overseas corporations are attending online and in-person to talk about the company’s advancements, adaptation to social changes, and how to maintain competitiveness and continue to create a 100-year long legacy.

Moreover, POSCO analyzes its actions carried out by the philosophy for the entire groups, attending the Corporate Citizenship Strategy Meetings annually since July 2019 to share the best practices and reshape the strategy with 20 presidential board members in every first and second half of the year. On April 16th, the meeting for the first half of 2021 was held to discuss for the solution to be more distinctively competitive and to create a strategy to further maintain its reputation for 100 years.

l The birth of ‘the Five POSCO Corporate Citizenship Brands’ to shape a better society

Same as other content from ‘the Charter of Corporate Citizenship’, POSCO has carried out various projects at the corporate level and understood its role within the society as a member by suggesting solutions for social problems to create a better society. In 2019, the ‘Representative Six Projects’ were selected and subsequently announced publicly to further help people’s understanding of these activities while publicizing the meaning of Corporate Citizenship.

On the other hand, the project reorganization was required as followed by the company’s reaction to climate change, the need for communications on the environment and safety. Its separated projects and achievements by each different group helped expand the role of the management philosophy, ‘Corporate Citizenship’. Finally, the ‘Five POSCO Corporate Citizenship Brands’ were launched for the purpose of having more diverse projects in March 2021.

The brands are divided into five categories: the signature brand, ‘Green With POSCO’ to lead the hydrogen industry in an action of ‘Carbon Reduction’ and achieve it by 2050’, ‘Together With POSCO’ to create developments together with suppliers and customers, ‘Challenge With POSCO’ to revitalize the venture ecosystem and foster new growth within the industry, ‘Life With POSCO’ to actively resolve social challenges such as a low birth rate and the increase in unemployment rates while ensuring its employees’ safety and happiness. ‘Community With POSCO’ aims to suggest development models for both the community and company to maintain sustainability and coexist together.

More details of the brand projects are shared in ‘An Easy-to-understand Five POSCO Corporate Citizenship Brands’

l Having the moment to share the achievements of the ‘Corporate Citizenship’ projects and researches

POSCO holds an annual event to showcase best practices and achievements. In the annual event in 2019, Tae-won Chey, the Chairman of SK Inc., and Ki-moon Ban, former Secretary-General of the United Nations was invited as special guests to hold lectures in order to further enhance the quality of the event.

The first commemorative performance event around the theme “Corporate, Becoming a Citizen” was held on the 3rd of December 2019, shortly before the COVID19 pandemic occurred. It drew a wide audience with its diverse selection of prepared programs from the commitment to action for the six representative projects, panel discussions, and conferences. Also, visitors had chances to have on-site experience of the ‘Corporate Citizenship’ – touring a public information hall, sharing achievement, visiting booths for the venture platform, charity flea market, and enjoying busking performances, which were all well received by those in attendance.

▲ On December 3rd 2019, the achievement was shared first in Atrium on the 1st floor of the POSCO center. More than 1,000 people including employees, officers from national organizations, experts, and citizens joined and created an atmosphere of joy.

Additionally, the best practices were shared in each category, Sang-young Lee, a leader from POSCO International for Business Section, Yo-han Lee, a leader from POSCO Chemical for People section, Jong-chul Lee, a team leader from POSCO Community Serving Volunteer Group for Society section. Their truthful and humorous stories moved the audience.

On December 8th 2020, the Corporate Citizenship Culture Day was held with the theme of ‘a Path to the Future Management with the Corporate Citizenship’. During the event, Ki-moon Ban, former Secretary-General of the United Nations, gave a special lecture about ‘Sustainable future for the corporate and directions for POSCO with the ‘Corporate Citizenship’ in front of about 10,000 employees.

Moreover, the book with a summary of corporate accomplishments from activities and research on numerous areas including management, economy, and sociology, was released and swiftly had a discussion meeting with the authors and professors.

l Special symposium to celebrate 3 years of the ‘Corporate Citizenship’:
a Path to the Future Management with 3 Years of POSCO’s Corporate Citizenship

It has been three years since the declaration and on 21st July 2021, a special symposium was held to talk about ‘a Path to the Future Management with 3 Years of POSCO’s Corporate Citizenship’. For the event held both online and in-person, important members of the company and academic panels: Jeong-woo Choi, the CEO of POSCO Group, Soo-keun Kwak of the ‘Corporate Citizenship Forum’, an honorary professor of Seoul National University (also a leader of the Corporate Citizenship Advisory Conference), Ho-keun Song , a chair-professor of POSTECH (also a director on Society department of the Corporate Citizenship), Hyeong-goo Mun, an honorary professor of Korea University (also a department director of the Corporate Citizenship–People).

POSCO Group CEO Choi announced ongoing achievements and said, “after the declaration of ‘the Corporate Citizenship’, POSCO reinforces competitiveness in particular business areas such as electric vehicles, environmentally friendly materials, and hydrogen energy business while also building a global collaboration system for expanded use of a by-product of steel production, the virtuous circle system to re-use waste resources and to further the development of hydrogen-based steelmaking. Lastly, the corporate’s accomplishment is to enable people to enhance the safety management policy, and reinforcing facilities, while developing and implementing smart safety technology.”

Not only, Professor William P. Barnett of Stanford University, Professor Jae-goo Kim of Myongji University, Professor Moo-weon Rhee of Yonsei University, Professor Hyeon-sang Shin of Hanyang University and Seong-jin Park, the head of POSCO Industry-Academy-Research Cooperation Office were all invited to give special lectures about the value and achievement of the philosophy.

▲ On the 21st of July, Choi, the CEO of POSCO Group is conducting an online Q&A session with William Barnett, the professor of Stanford University as well as the speaker of the event, marking the three-year anniversary of the declaration.

Professor Barnett explained that “in the times of ESG management, POSCO is actively leading the industry by introducing the management philosophy, ‘the Corporate Citizenship’. The value and standards on others should be suggested too.”

In the following session, a total of 12 corporate case studies were presented and linked the achievements of the POSCO Group with corporate citizenship in collaboration with the five major brands based on research from scholars in the major Korean universities. The results were shown by each of the brand’s case study professors, and executive employees from the corresponding case studies with their results. The presented materials have been published in an E-book format and are available for download on POSCO’s website. (POSCO’s Website – Home)

The POSCO’s Symposium was held to declare corporate citizenship as its management philosophy and everyone involved shared their accomplishments. Corporate Citizenship will be truly achieved only after the Charter of Corporate Citizenship and CCMS cultivates the philosophy to every employee to follow and act accordingly.

In upcoming September, POSCO sessions will be held at the World Knowledge Forum (WKF) arranged by Maekyung Media Group to discuss new possible company roles and shape the future based on the achievement created within the 3 years of Corporate Citizenship. Moreover, at the end of November, the Corporate Citizenship Brand Day will be held for its employees to present and discuss their best practices produced by their experiences and actions with Corporate Citizenship. These events will allow everyone to take a close look at the changes that have been implemented through these times and aid us in becoming a 100-year-old company earning respects by customers, business partners, and suppliers alike.

POSCO marked three years with the declaration of ‘Corporate Citizenship’ in July 2018. POSCO has fiercely worked to accomplish the Corporate Citizenship. Respectively, the Corporate Citizenship has now established itself as a management philosophy to provide the way of future management. Nevertheless, POSCO will still put its effort into shaping a better society, creating higher company value through practicing the Corporate Citizenship with sincerity.

In this episode, we will introduce the Challenge With POSCO brand.

Challenge With POSCO brand was created to revitalize venture ecosystem and foster new growth industries. The department in charge operates a nurturing system that creates a startup infrastructure that enables venture businesses to conduct business and research at the same time and helps startups grow smoothly. Based on these efforts, creating the foundation for POSCO Group’s new growth businesses, creating jobs, and enhancing economic vitality is the future that the Challenge With POSCO brand is going to create.

POSCO is pushing for various projects to realize the vision of the Challenge With POSCO brand. It is also striving to find future growth engines for POSCO Group by investing in venture funds and matching businesses between POSCO Group and POSCO venture companies. Let’s take a closer look at the brand’s core businesses and the newly launched programs in 2021 one by one.

l Venture Business Incubation Center

POSCO supports startup spaces by creating incubation spaces for venture businesses, including the CHANGeUP GROUND SEOUL, a public–private partnership incubation center (Ministry of SMEs and Startups).

▲ CHANGeUP GROUND SEOUL (Yeoksam-dong), a public-private partnership startup space operated by POSCO.

The CHANGeUP GROUND SEOUL made up of seven stories above the ground and one basement floor is different in size from the existing venture startup space launched in Korea. In the meantime, many companies and universities in Korea have operated nurturing and support programs such as venture startup support programs, space provision, and investment but CHANGeUP GROUND is entirely different in scale and research support and investment nurturing programs show a different evolution in scale and systematic aspect.

▲ CHANGeUP GROUND POHANG about to be completed on July 21, 2021.

What makes POSCO’s venture incubation center ‘CHANGeUP GROUND’ special? First of all, venture businesses that have moved in aim to be listed on the global stock market, including the United States. This strategy was established to set a business direction with the goal of targeting the global market from the beginning and decided to have global competitiveness by fiercely challenging businesses and Research & Development. From platform companies to bio ventures, the business situation is getting fiercer. The business model of global companies has changed to an open growth model through venture investment and symbiosis, and it has become difficult to survive with romantic and slow-paced models such as starting a business in a garage. POSCO supports companies to succeed in challenges in these difficult situations and has three systematic support systems for venture companies. Let’s take a closer look at what kind of system POSCO has built.

① Selecting supplier from ESG perspective
The first among them is Research & Development and business space. It enables the utilization of technological infrastructures that are difficult to find in other venture incubation infrastructures. Using the infrastructure of POSTECH, a world-class research-oriented university, including the 3rd and 4th generation of radiation accelerator owned by POSTECH, new materials are developed and big data is processed. It has helped to overcome the reality that existing startup companies like artificial intelligence platforms had the only choice of challenging limited modules.

② Financial links
The reason why existing startups could not dream of challenging the global market was that it was difficult to secure funds. POSCO has established investment-related conditions and raised venture funds with a total of 800 billion won to ensure that venture businesses are not restricted in terms of research size with insufficient energy and funds needed to attract investment. It plans to invest 400 billion won in promising fields and another 400 billion won in new growth domains by utilizing excellent domestic and foreign operators.

③ Business Network support
Including POSCO CHANGeUP GROUND SEOUL which opened in 2020, it is currently forming a CHANGeUP GROUND network regardless of location. It has also formed a business network with startup networks secured through Idea Market Place (IMP) and global companies in Korea and abroad so that there is no problem with global cooperation if only technology and business models are in place. Such infrastructure will be of great help not only to venture businesses but also to open collaboration and global expansion of POSCO Group’s various businesses.

In addition, POSCO has been providing technical support and expanding the business scale by directly participating in various projects promoted by venture companies, as well as a venture business nurturing platform and idea discovery since 2021. The challenge of Challenge With POSCO continues until the day when it succeeds by widening the gap with the startup craze in China and other regions!

l Industry-Academic-Research cooperation eco-friendly energy projects to foster venture business and contribute to carbon neutrality

POSCO, POSCO Chemical, and POSTECH are proceeding with eco-friendly solar energy production projects with Gyeongsangbuk-do Province, an energy platform startup ‘H Energy’, and battery ESS business startup ‘PMGROW’ and it is a project of industry-academic-research cooperation.

This project is a business that installs solar energy modules on the rooftops of private buildings of residents in Gyeongsangbuk-do Province and sells eco-friendly energy produced from the modules.

Once the project is on track, POSCO will be able to reliably purchase solar energy needed to achieve carbon neutrality. POSCO’s Global Quality & Service Management Office supports research on weight lightening of energy modules using Giga steel, high tensile steel, and high corrosion-resistant steel and is also pushing to supply “Posmac.”

Gyeongsangbuk-do Province plans to provide low-priced electricity to vulnerable groups in the region by utilizing a portion of the generated energy revenue. The plan is to contribute to revitalizing the local economy, creating jobs, and welfare for low-income groups and the data generated from power platforms will be processed worthily by POSTECH’s AI analysis and used to build the data ecosystem of Gyeongsangbuk-do Province.

l Development of battery standard model for eco-friendly small and medium-sized electric vehicles

The next business to introduce is cooperation in lightening battery packs for eco-friendly electric buses and automobiles. This business is in partnership with PMGROW, an electric vehicle service platform startup. It is pushing to replace low-priced steel plates or aluminum-based electric vehicle battery cases with high-quality steel materials. In particular, it is planning to propose the shape and steel of optimal battery pack case in line with the battery pack performance enhancement bill that is to be revised from July 2021.

With the technical cooperation between the two companies, PMGROW expects to extend the usage time and lighten the weight by increasing battery capacity and reducing the cost compared to Al. The first goal is to apply in new electric buses that will be released in the first half of 2022. In particular, the completion ceremony of the PMGROW’s mass production plant was held in the next-generation battery regulation-free zone located in Pohang, and it signed an NDA with POSCO for the development of lightweight battery packs under the supervision of the Automotive Materials Marketing Office. It is also planning to develop batteries that will be used for electric vehicles, electric bikes, and small electric vehicles in the long term.

▲ At the signing ceremony of NDA for co-development of lightweight batteries with PMGROW on July 5th.

PMGROW also participated as an angel investor in POSCO Capital and if its corporate value increases by continuously strengthening its competitiveness, it can contribute to POSCO’s profit generation.

We took a look at new programs that POSCO is launching with the goal of Challenge With POSCO. I am so excited that there are a lot of interesting programs and I am looking forward to it. Until the day when the startups fostered and supported by POSCO become decacorn companies beyond unicorn companies, POSCO’s challenge will continue in 2021!

A brand created to revitalize the venture ecosystem and foster new growth industries, Challenge With POSCO! POSCO will continue to carry out activities that create a foundation for new growth businesses, create jobs, and enhance economic vitality.

I POSCO, we want to deliver a sincere message.

Recently, advertisements by Swedish carmaker Volvo have become a hot issue online. Volvo, famous for proving the robustness of the product through destructive safety tests, once again produced an advertisement titled ‘The Ultimate Safety Test’. The appearance of a polar region with a glacier in the intro raises the expectation that safety tests in dangerous situations will be carried out. However, with the scene of the glacier collapsing, the twist begins. Then the message says “Climate change is the ultimate safety test. That’s why we’re changing to all-electric”, clearly revealing Volvo’s future direction.

Volvo Cars is actually operating a carbon emission reduction action plan and is actively participating in a joint project to cope with climate change. “We are part of the problem of climate change, but we can also be part of the solution. We have a responsibility to act,” said Hanna Fager, Head of Corporate Functions at Volvo Cars. This is an example of the sincerity of the values and social responsibilities pursued by companies.

In addition, not long ago, a campaign video of a chair brand gained popularity on YouTube with more than 5.9 million cumulative views. The Fursys Group’s ‘Lean on’ campaign is a video showing the contents of social contribution activities that produce and send customized chairs to those in need, such as grandmothers of Hangeul University and street busking musicians. This campaign received enthusiastic responses and won the “2020 Consumers’ Choice Outstanding Ad” online category.

Philip Kotler, a professor emeritus at Northwestern University who is called the master of management, defines the phenomenon that the company’s brand itself has become an active act on social responsibility as ‘brand activism’. This is because the company that the public wants to work with is ‘a company that steadily delivers a genuine message through the brand’.

POSCO has also been steadily practicing since the declaration of its management philosophy as a “Corporate Citizenship” in 2018 and the announcement of its five major projects. If so, let’s take a closer look at what the Five POSCO Corporate Citizenship Brands are.

I The background of the birth of the Five POSCO Corporate Citizenship Brands

As the preamble of the Corporate Citizenship Charter states, ‘As a member of the social community, POSCO is seeking and practicing corporate-level roles to engage in addressing social issues and to create a better society’.

And after the declaration of management philosophy, in 2019, the six major projects were selected to make these activities easier for more people to understand and empathize with.

However, with the recent emphasis on ESG management, it has become more important to respond to climate change and communicate with stakeholders on the environment and safety. In addition, the scope of activities as corporate citizenship has been further expanded, such as promoting major projects suitable for the characteristics of POSCO as well as group companies and also generating results.

In this way, in March 2021, the Five POSCO Corporate Citizenship Brands were finally born.

I Intensive exploratory! the Five POSCO Corporate Citizenship Brands

In last December, as POSCO declared to achieve ‘2050 carbon neutrality’, Green With POSCO (a company you protect the environment with) was set as its signature brand, and Together With POSCO (a company you want to work with), Challenge With POSCO (a company you want to grow together with), Life With POSCO (a company you build a future together with), and Community With POSCO (a company you engage with for the local community) were designated as five major brands.

First, let’s take a look at Together With POSCO, ‘a company you want to work with’. POSCO shows its willingness to create a stronger supply chain and industrial ecosystem based on its experience of presenting a new paradigm for shared growth with business partners. The brand includes activities that pursue cooperation and win-win value with various stakeholders.

POSCO is carrying out a new level of shared growth activities to meet higher social expectations and flexibly cope with changes in the management environment. The major projects are Benefit Sharing (a system that shares the performance of POSCO and its partners), Open sourcing (suppliers can promote their products without visiting in person), and Steel Win-Win Fund (worth KRW 100 billion funds to overcome the COVID-19 crisis, providing liquidity to small and medium-sized enterprises). Especially, 897 company members signed up in the e-Catalog system which is an open sourcing business, 5,257 products were introduced, and 1,529 products were contracted for purchasing (July 2019 to present).

Next is Challenge With POSCO, ‘a company you want to grow together with’! It is a brand that shows its willingness to become a ‘company that wants to grow together with’ by discovering and nurturing promising venture companies. It aims to achieve change and innovation in society and industry as a driving force for POSCO Group’s innovation and sustainable growth.

POSCO has established startup incubation spaces and is providing places for startups, including ‘Seoul Change Up Ground’, a public–private partnership incubation center (Ministry of SMEs and Startups). It also incubated and accelerated 60 startups through venture platforms in 2020. It continues to build a virtuous circle venture platform by discovering promising venture companies twice a year and supporting the entire process of business from the idea stage to the business model establishment, investment, and follow-up management. POSCO utilizes POSCO Group’s business capabilities and resources in line with the Sustainable and low-carbon trends while working with partners with ideas to pursue “environment, sustainable city, production, and consumption.”

The signature brand, Green With POSCO, contains POSCO’s strong will to create ‘a company that protects the environment together’.

To achieve the target of ‘2050 Carbon Neutrality’, POSCO sets out a mid-to long-term target of 20% carbon reduction in 2030 and 50% in 2040. For now, it plans to optimize low carbon solutions that reduce carbon emissions that are already in use and apply low carbon technology step by step in the future. The first step is to improve energy efficiency and replace economically low carbon fuel materials, the second step is to upgrade scrap utilization and apply Carbon Capture Storage & Utilization (CCUS), and the third step is to develop existing FINEX-based hydrogen reduction and renewable energy-based low-carbon steel process.

POSCO not only develops technologies to realize Carbon Reduction but also carries out continuous communication and partnership activities with stakeholders. In addition, as a corporate citizen, it also actively participates in ‘My Little Challenge’, which can reduce carbon in his work and daily life.

Life with POSCO, ‘a company that makes the future together’, protects valuable values for employees such as safety, health, welfare, and education. POSCO strives to make Pohang and Gwangyang good cities to give birth to and raise children, and to provide various educational opportunities to develop the dreams of future generations.

‘1% Sharing Art School’, which helps to build dreams in culture and art, ‘Do Dream’, a program that supports teenagers in child welfare facilities to stand on their feet, and ‘Science Beyond Imagination’, an experience-based creativity lecture project that visits local schools in person are the major projects. Also, believing that ‘the future of young people is the future of a country’, POSCO aims to strengthen the employment capabilities of young people by operating ‘POSCO YOUTH DREAM’. It supports young people through academies to foster AI/Big Data-related talent and enter the industry, startup incubation schools for prospective startups, and Youth Sharing h, a job-linked program for small and medium-sized companies.

Community With POSCO, ‘a company you engage with for the local community’. POSCO perceived growing up with local communities as a corporate social responsibility from the beginning of its foundation. It plans to continue to present a model of coexistence and development around the hub area where POSCO Group’s business sites are located.

Currently, POSCO employees operate a total of 80 talent volunteer groups in Pohang, Gwangyang, and Seoul, participate in regional differentiated social contribution programs, practice sharing, and build trust with the local community by using work characteristics and specialties. It also operates free meal service centers in Pohang and Gwangyang and established a university student volunteer group ‘Beyond’ since 2007 to help regenerate farming and fishing villages and serve as a bridge between cities and villages.

In addition, it provides cultural contents of various genres that enhance the self-esteem of residents through classical music, musicals, and expert lectures such as POSCO Culture Concert, Kids Concert, and Year-End Concert. It also installed sculptures made with POSCO’s steel materials in Hwanho Park in Pohang and also installed sculptures that represent the local community in villages near Gwangyang Steel Works and strengthen solidarity with the local community.

I The power of a respected 100-year company comes from POSCO Corporate Citizenship!

Now, I think we should discover and promote activities that many people can sympathize with by utilizing the Five POSCO Corporate Citizenship Brands. As soon as the value of the five major brands that we practice and realize in person becomes POSCO’s corporate culture, won’t the public exclaim, ‘As expected, POSCO Corporate Citizenship!’ POSCO will continue to strive to help more people to participate and empathize with the five major brand activities of corporate citizenship. Concluding the story of the birth of the five major brands, we look forward to your continued interest and encouragement in “An easy-to-understand the Five POSCO Corporate Citizenship Brands’ story” that will be serialized in the future.

Venture companies and POSCO. At first glance, the connection between the two seems irrelevant, but POSCO’s investment and support for ventures go a long way. In 1997, POSCO established POSTECH Capital (currently POSCO Capital) to foster venture companies, and, as of present, it is striving to find the future growth engine of the company through the venture platform.

ISSUE The foundation of venture startups and its growth is vulnerable

The advent of the 4th Industrial Revolution has caused a rapid shift in the future industrial paradigm, and existing companies are facing challenges of sustainable growth. As a countermeasure, many global companies are strengthening their competitiveness and looking for new business opportunities by investing and cooperating with venture companies.

So, what is the situation of the venture industry like in Korea? As a joke, it is said that in Korea, the best graduates only start a business when they fail to find a job. The issue is not only the lack of capital and resources but the lack of excellent personnel as well. In Korea, the economic structure is centered on large companies hence it is a challenge for venture companies to advance here. Moreover, due to COVID-19, a lot of business owners are facing a hard time, which has also made it hard for entrepreneurs to start new venture businesses.

According to a survey of the Korea Chamber of Commerce & Industry (KCCI) in 2017, 62% of venture companies in Korea couldn’t survive more than three years, ranking 25th among the 26 OECD member countries. However, if it is possible to create an ecosystem where large companies and venture companies can coexist, the situation will improve. Ventures can be provided with growth opportunities through joint research and testbeds with large companies, and large companies can obtain new growth opportunities and even profits.

The reason why large companies and ventures need to share growth with cooperation could be found here.

And it is also why POSCO is trying to invest in and nurture venture companies with its “Venture Platform,” which incorporates a Venture Valley and a Venture Fund. The POSCO Venture Platform utilizes its unique industry-academia-research infrastructure that includes Pohang University of Science & Technology (POSTECH) and the Research Institute of Industrial Science & Technology (RIST).

SOLUTION 1. Come to “POSCO Venture Valley”

To successfully establish a sound venture ecosystem, “startups” should become more active. POSCO has been helping young venture entrepreneurs lay the foundation to grow their businesses through research, investment attraction, and technology sharing through the “Venture Valley”.

When you hear the word ‘venture’ where is the first place that comes to mind? It would probably be Silicon Valley of the U.S. Silicon Valley is a startup cluster and a jungle of entrepreneurs, housing giant technology companies, such as Google, Apple, and Tesla. The objective of POSCO’s Venture Valley is to build the world’s best venture cluster and produce unicorn companies to become Korea’s Silicon Valley.

Other large companies only participate in the investment of ventures, but POSCO aims to create a Venture Valley as well, with its outstanding venture infrastructure. The distinctive feature of POSCO Venture Valley is that it is backed up with the following factors: 1) space for startups in their early stage, 2) POSTECH, which offers exceptional talent, 3) RIST and R&D infra, that support the advancement of technologies and products, and 4) MOU with MSS and the KVCA.

To this end, POSCO decided to invest 200 billion KRW to create “Incubating Centers” for venture companies in Seoul, Pohang, and Gwangyang, and named it “Change-up Ground”. The incubator facilities would change the future of startups and act as a ground to upgrade their business.

In July, POSCO opened “Change Up Ground,” the first public-private partnership in TIPS (Tech Incubator Program for Startup Korea) Town, Seoul. TIPS Town is a Korean version of Silicon Valley that the Ministry of SMEs and Startups (MSS) has been constructing in Seoul since 2015. MSS is operating the areas Street S1 to S4, while Gangnam-gu Office runs S5. POSCO became the first private company to cooperate with MSS and opened S6.

Pohang Change Up Ground is under construction on a total floor area of 28,000㎡ with seven floors and is expected to be completed in the first half of 2021, housing more than 100 venture companies. Startup tenants can receive support according to the development phase, from startup training to initial investment. Through corporate specialized consulting and mentoring, the ventures will be prepared with a theoretical and practical foundation and participate in various events, such as the Idea Market Place (IMP) and the Venture Valley Biz-Day, where they can attract investment and advance into the market. Also, through coordination with the venture capital, which supports the Venture Valley, the venture companies can apply for the “TIPS” program, a program to support private investment-led technology startups, which might eventually lead to investment from the government. Ventures that have successfully established their foundation in Pohang and Gwangyang can promote and expand their business into the metropolitan area with a secured base on the Streets of Entrepreneurs established by the Ministry of SMEs and Startups in Seoul.

Meanwhile, POSCO launched the “Venture Valley Business Council” in September 2019. The council is to foster youth ventures by communicating with venture companies, incubators, and local governments in Pohang and Gwangyang. To promote technology exchange and benchmarking among ventures, the Venture Valley Business Council will form subcommittees of the three major business areas of POSCO Venture Valley: Materials, Energy, Environment, Bio-pharmaceuticals, and Smart City & Smart Factory. Through this, POSCO plans to provide practical support in creating a venture ecosystem, revitalizing the local economy, and creating jobs for the youth.

With the Venture Valley, POSCO not only utilizes POSTECH’s master’s and doctoral personnel, professors/researchers, but also various startup infrastructure of Pohang in order to build a Korean version of Silicon Valley in Pohang. Therefore, POSCO aims to produce 100 entrepreneurs from POSTECH per year and produce two unicorn companies.

SOLUTION 2. Here Comes the “Venture Fund”

– Investment for POSCO’s future growth also carried out through Venture Fund

Another strategy of POSCO’s Venture Platform is the Venture Fund. While Venture Valley supports in-house and external venture companies to start businesses and grow further with POSCO’s industry-academia-research infrastructure, Venture Fund invests in not only occupying companies of the Venture Valley but also aspiring domestic and overseas ventures to discover new growth engines for POSCO Group. The steel industry is a profound one centered on utilizing heavy equipment, so keeping up with the speed and determination required by the venture sector is challenging. Therefore, the strategy aims to discover new businesses through this kind of open innovation.

Attempts to discover new business ideas and technologies by investing in venture companies aren’t new among large companies in Korea and overseas. On the contrary, it has become an inevitable decision for companies in order to survive the rapidly changing business environment of the 4th Industrial Revolution era. Then, what is the investment strategy of POSCO Venture Fund that sets it aside from other large companies?

POSCO forms and operates various types of funds tailored to the characteristics of each phase of the venture business growth. POSCO’s Venture Fund is differentiated in that it supports the rapid growth of promising venture companies at each stage and executes follow-up investments in outstanding ventures, aligning them to POSCO’s new growth domains.

The investment sector of the fund includes not only new growth domains set by the company but also various promising areas of the 4th Industrial Revolution era. Promising business areas identified in the fund operation process are then included as the company’s new growth domains, which are then sought as new business opportunities to flexibly respond to the rapidly changing business environment. POSCO plans to utilize the Venture Fund investment as a subsidiary means of M&A, and make it a core operating principle to discover the company’s mid- & long-term new growth business and generate investment returns.

Funds for the promising investment field are classified into two, depending on the growth stage of the company: “Seed Fund” is one and the “Growth Fund” is the other. The “Seed Fund” will provide seed funding for newly established ventures that are based on outstanding technologies possessed by university laboratories. For this purpose, in 2019, POSCO created two Seed funds that are operated by POSTECH Holdings and Seoul Techno Holdings, and plans to expand the scope of discovering excellent start-ups of leading domestic universities in their early stages. Recently, POSCO also created the IMP Fund dedicated to supporting selected ventures of the IMP (Idea Market Place) program so that the ventures can receive continuous support for growth after the program.

The “Growth Fund” invests in domestic and overseas venture companies that have entered a rapid growth stage after the venture’s new idea has gone through initial verification in the market. It is operated through collaboration with the best investment operators. As of 2019, there are three domestic Growth Funds operated by SV Investment, Premier Partners, and STIC Ventures, and they are currently being invested in ventures.

Through overseas funds, POSCO plans to read the trends of advanced technology in high-tech and promising fields at an early stage and discover aspiring global ventures based in Silicon Valley. In 2019, “Schroders” was chosen as the investment operator, and the fund was utilized as Fund of Funds to invest in promising overseas ventures. By utilizing the investment operator’s global venture network, POSCO hopes to support overseas investment and entry into the global market, which are essential factors for the quantum jump of domestic venture companies.

Since last year, a total of 95 billion KRW was invested in “Seed” and “Growth” funds investing in these promising fields, and investments will continue in the future as well.

The funds investing in the domain field focus on new growth domains as their main investment field, including the secondary battery material business field, which POSCO is currently pursuing as a new growth engine. In 2019, 50 billion KRW was invested in the “CVC Fund,” and in August 2020, an investment plan of 80 billion KRW was confirmed for the “Strategic Fund,” laying the foundation for investment in the entire growth cycle.

The “CVC Fund,” which is operated by POSCO Capital, is created with POSCO Group funds only and is used to invest in outstanding ventures within the domain. The fund seeks to increase strategic links by partnering with the investment operator from the early stage of the venture. The “Strategic Fund” is a fund investing in venture companies that meet POSCO’s new business strategy and have grown beyond a particular scale. With outstanding external operators, like the “Korea Growth Investment Corporation,” the fund is to be used in expanding the scope of discovering outstanding companies and increasing the scale of investment.

The venture fund is planned to be created based on 800 billion KRW, and the fund strategy will continue to be operated yearly in line with changes in the domestic and global venture investment market and the direction of the group’s new business strategy. In addition, POSCO plans to continue the venture fund in the long-term by utilizing the profits generated from the fund.

Also, POSCO will further enhance cooperation with outstanding domestic investment operators and leading investment institutions, such as KDB Bank, Korea Venture Investment Corporation, and Korea Growth Investment Corporation, that are jointly participating in the existing funds, and strengthen the network with the global venture investment industry.

With these endeavors, POSCO Venture Fund will be able to play a part in the growth of young entrepreneurs, who will become new engines of national competitiveness, while discovering venture companies with potential and nurturing them as new businesses of the company.

※ POSCO Idea Market Place Cases

The Venture Platform is what POSCO has prepared for venture companies that will lead the future with creative ideas and passion! From Venture Funds worth 1 trillion KRW and Venture Valleys to the Idea Market Place for entrepreneurs, POSCO will continue to invest in venture companies to secure new growth engines and revitalize the local economy.

POSCO (CEO Jeong-Woo Choi) is leading the venture ecosystem with substantial support by finding venture companies.

On December 15, POSCO held a demo day for venture companies selected at the 20th POSCO Idea Market Place (IMP) and launched six teams as the second “POVENTURES,” an in-house venture to discover new businesses for future growth.

In compliance with the government’s quarantine policy of social distancing due to COVID-19, the event was broadcast live online with only a minimum number of people attending.

The selected ventures held a presentation at the ^*Change Up Ground and designed a detailed business roadmap with technical and investment advisory groups via video call. Investors and prospective entrepreneurs also participated in a Q&A session with venture companies online.
^*Seoul Change Up Ground (TIPS Town S6): A public-private partnership incubator facility that POSCO opened for the first time for a private company in Seoul TIPS Town with the Ministry of SMEs and Startups (MSS)

▲ A venture selected at the IMP is giving a presentation online

Among the six venture companies selected in the fields of energy and bio, Beyond Honey Comb of “Robotic Restaurant”, where food is made and sold utilizing AI, and CorbonEn, where carbon dioxide generated in the steelmaking process, is separated and made into liquefied carbonic acid to be supplied for carbonated beverages or welding gas, received attention.

POSCO has been operating the ‘Idea Market Place,’ a program to discover and nurture startups in early stages, since 2011. For the past ten years, the company has invested 20.3 billion KRW in a total of 111 outstanding ventures. Previously, the subjects of the program were set to ventures less than 7 years, but from this year on, it has been changed to prospective entrepreneurs and promising startups of less than 3 years, as to strengthen support for venture companies in their early stages.

Also, POSCO selected six teams as the second “POVENTURES,” an in-house venture program introduced to spread a creative workplace culture and discover new growth businesses of the future. The selected in-house venture teams are incubated for a maximum of one year before the startup decision is determined. During the incubation period, they receive various benefits, such as office space, support funds for marketing, and mentoring.

Out of the 12 teams selected as the first POVENTURES, seven teams have succeeded in starting businesses within a year, showing a start-up rate higher than 50%. In November, among the first POVENTURES, POSREGEN and iOmtek received the highest award at the “K-Startup Challenge,” which was jointly held by the MSS, Ministry of Education, and Ministry of Science and ICT, in recognition of its technology and growth potential.

POSREGEN developed a product with by-products of the ferronickel smelting process that can replace cement and has been supplying it to 25 construction sites. iOmtek combines by-product slag and waste plastics to produce materials for construction and infrastructure use that can substitute asphalt or sidewalk blocks.

Meanwhile, POSCO received the “Butterfly Lamps,” which were installed by the MSS at the COEX Square in July. The lamps featuring butterflies fluttering their wings deliver the message of hope — that our small wing flaps can revitalize our economy and create a brighter tomorrow. POSCO installed the lightings in the streets of its TIPS Town on December 12 so that citizens passing through the streets can feel the comfort of their hearts as they watch the bright and dynamic wings of the butterflies.

On September 7, POSCO established the first ‘IMP (Idea Market Place) Fund,’ Korea’s first venture capital to be organized by a startup accelerator.

The first IMP fund is a dedicated fund established for venture companies selected through Idea Market Place, POSCO’s unique incubating program intended to find and nurture venture companies. The fund is worth 5.1 billion KRW in total.

The fund is operated and managed by POSTECH Holdings, Korea’s top startup accelerator that holds excellent capabilities in investing and nurturing venture companies as well as in attracting subsequent investments. Since POSTECH Holdings already participates in the selection, nurturing, and mentoring phase of the Idea Market Place program, its role of fund management is set to allow better focus on the growth of venture companies.

The venture companies will be provided with mid- to long-term support for future growth, including POSTECH’s technology and research equipment and access to ‘Change Up Ground,’ an incubator facility in Seoul. Additionally, promising venture companies will be incorporated into POSCO Group to foster them as new growth businesses of the company.

The first IMP fund is the first case under the ‘Venture Investment Act,’ implemented since August, allowing startup accelerators to invest in venture companies to increase autonomous investment and expand its ecosystem. A startup accelerator formed with a venture capital instead of an angel fund (capital from individuals) facilitates the participation of corporate investors. With the expanded autonomy of investment, a more diverse venture investment portfolio is expected as well.

POSCO has been operating the ‘Idea Market Place’ since 2011. For the past ten years, the company has invested 17.6 billion KRW in a total of 102 companies, and the program has been recognized as one of the best incubation programs to foster venture companies in Korea. Previously, venture companies were first selected and fostered before investment decisions were decided. However, starting this year, the system has been improved to preempt promising venture companies and focus on their growth by deciding investment from the selection stage.

In July, POSCO opened the first public-private partnership incubator facility named ‘Change Up Ground’ in TIPS Town, Seoul, and has been taking the lead in establishing startup infrastructure.