The 52-hour 'Brick Wall'... Labor time regulation is stifling innovation in sinking startups. 'We have the money and the talented people ready to commit, but it’s so frustrating because we don't have the time to work.' Need to apply intensive working hours monthly/quarterly.

“We can pay more, and we have tons of researchers who want to commit, but the most frustrating thing is that we can't freely use our time.” That’s the plea from CEO Um Yoon-seol of humanoid startup A-Robot. He complained, 'When we need to prepare for war (to compete with Chinese rivals), the current labor regulations force us to turn off the lights and clock out when the time limit hits.'

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Startup D, which is developing its own AI chip to escape dependence on Nvidia, recently faced extreme pressure managing schedules during a crucial development phase. The CEO of D company said, 'The two months leading up to the semiconductor tape-out (design completion) require intense focus—even all-nighters aren't enough.' He lamented, 'Because of the 52-hour workweek regulation, which was uniformly applied without understanding the reality on the ground, a structure is being fixed where employees who want to work hard are actually worried about being judged.' The domestic venture ecosystem is facing a crisis. Startup founders are complaining that while US and Chinese startups accelerate development using massive capital and manpower, domestic startups are crippled right from the starting line in the 'time game.' Critics point out this contradicts the government’s goal of achieving 'Global Top 3 AI superpower status.'

Professor Yoon Dong-yeol of Konkuk University’s Business Administration (President of the Korea Productivity Association) analyzed, 'The fundamental problem with the Korean working hour system is not long hours, but that the 52-hour system fails to accommodate the work rhythm of intense concentration followed by recovery, repeated on a monthly or quarterly basis.'

Startups and VCs are urging the introduction of a 'Korean-style White Collar Exemption' only for high-income/specialized workers out of desperation—they argue they must at least be able to compete in the 'time game.' A domestic major VC representative pointed out, 'If a startup wants to succeed, they must unconditionally align with the timeline of the global companies that will buy their products and services.' He added, 'Potential buyers order us to produce goods within limited time frames, quarterly or annually, but Korean startups are tied down by regulations limiting work hours weekly.'

Startups leaving Korea. The venture industry unanimously agrees that the current labor regulation, which caps working hours weekly, acts as a fatal risk to their survival. The CEO of a representative Korean AI semiconductor developer said, 'Chip design absolutely requires collaboration with global foundry companies that will manufacture it.' He continued, 'Once a deadline is set, it can't be changed or postponed. Missing the deadline makes it hard to secure the next opportunity, which is the same as delaying commercialization.' He complained, 'The 52-hour workweek itself is becoming a risk, yet we often feel like the government is enforcing the system without understanding the reality.' A CEO of another startup developing marine pollution removal devices in Korea is also cornered. He stated, 'External evaluations or corporate presentation schedules are often announced abruptly 3 to 5 days in advance. In a situation where it's hard to hire skilled new employees, the company’s very existence is shaky if the entire staff can't concentrate intensely for a short period.' He admitted, 'We're forced to meet deadlines by making clock-in/clock-out times flexible, but this is essentially violating the law, meaning we live under constant potential risk.'

◇ Employees say they want to work more... This structural constraint is resulting in a decrease in tech startups. According to the Ministry of SMEs and Startups, the number of domestic tech startups dropped from 122,444 in 2021 to 108,096 in 2025 (as of the first half), an 11.8% decrease in four years. So-called 'flip' companies (those moving their headquarters or converting legal entities overseas) to evade rigid domestic labor regulations are also increasing rapidly. Analysis suggests this is the cumulative result of higher labor costs, investment contraction, and slowed execution speed due to working hour regulations. A VC industry insider pointed out, 'One reason Silicon Valley heavy hitters are excluding startups founded in Korea from their investment targets is precisely this labor regulation issue.' Another VC representative said, 'Startups are organizations that compete based on extreme efficiency and time-to-market.' He added, 'Results that are not delivered when concentration is needed, but later, immediately lose market competitiveness.' He continued, 'Even in Silicon Valley, work-life balance is valued, but when the moment of truth arrives, they camp out on field beds and power through.' 'Capital has no borders, but time is stuck within our borders.' Relatedly, the US does not apply working hour regulations to professionals above a certain salary level. Germany uses working time accounts to accrue and offset overtime during peak hours, and Japan exempts high-income professionals from time regulation while imposing health management obligations. Experts assess that the government’s policy of fostering the venture ecosystem while leaving the working hour regulations untouched is contradictory. An industry source developing proprietary Foundation Models for 'Sovereign AI' strategy stated, 'Although consortia are led by large corporations, the principle is joint research with university labs and startups using GPU resources provided by the government.' He concluded, 'We are expected to develop an AI model comparable to Gemini or ChatGPT in less than three years by 2027, all while perfectly adhering to the 52-hour workweek.'

https://www.hankyung.com/article/2025121700371