Today, startups are achieving innovation differently from traditional companies based on quick application of new technologies, promptness in decision-making, and active risk-taking. In this background, the startup innovation ecosystem (SIE) is defined as a system of innovation actors and influencing factors and their relationship, affecting innovation-based startup activities and their performance. SIE is distinct from the traditional national innovation system (NIS) and has an impact on NIS and government policy, co-evolving in the time. This study investigated how the Korean government, which is experiencing the R&D paradox of high R&D investment but low productivity, seeks to change the NIS by developing the SIE. According to our analytical framework of the SIE, Korea’s SIE is analysed in terms of startups, technology/knowledge, training/human capital, finance, infrastructure, and globalisation. In particular, the evolutionary process of startups-related policies is explained with several specific examples of policy programmes. It is found that Korea’s SIE has achieved unique development, with the government’s active supporting policy for startups, and has produced a big positive impact on Korea’s NIS.