Startup Market, 90s Generation Has Arrived... 20s Entrepreneurship Increases by 30%

Ministry of SMEs and Startups Announces Q3 2020 Startup Trends
Startup Growth Continues Despite COVID-19 in Q3

[Asia Economy Reporter Kim Cheol-hyun] In the startup market, people in their 20s, born in the 1990s, are emerging as the main driving force. In the third quarter, startups by people in their 20s increased by nearly 30% compared to the same period last year, showing the steepest growth among all age groups. Amid the COVID-19 situation, more people in their 20s are challenging themselves with startups rather than focusing solely on employment.

According to the 'Startup Enterprise Trends' announced on the 24th by the Ministry of SMEs and Startups (Minister Park Young-sun, hereafter referred to as the Ministry), the number of startup enterprises in the third quarter of this year reached 343,128, an increase of 13.3% compared to the same period last year. Although the growth rate of real estate startups, which influenced the increase in startups in the first half of the year, somewhat slowed down in the third quarter, significant increases in information and communication industries, wholesale and retail trade, etc., drove the overall growth in startups.

◆ 30% Increase in Startups by People in Their 20s = Notably, startups increased across all age groups, but startups by those under 30, based on new attempts, increased significantly. Startups by those under 30 in the third quarter numbered 46,809, a 29.9% increase compared to the previous year. Following this, the increase rates by age group were 15.8% for those 60 and older, 13.4% for those in their 30s, 9.0% for those in their 50s, and 8.8% for those in their 40s. This indicates a remarkable increase in startups by people in their 20s. Considering that startups by those under 30 increased by 13.8% compared to the previous year until the first half of this year, the growth rate of startups by people in their 20s is accelerating further. The sectors where startups by those under 30 increased include wholesale and retail trade (47.8%↑), accommodation and food services (13.1%↑), business facility management services (38.3%↑), and information and communication (29.9%↑). Even when expanding the range to startups by those 39 and under, classified as youth, the number reached 125,625, a 19.0% increase from last year, driving the overall increase in startups.

By gender of the representatives, female-led startups increased by 14.1% compared to the same period last year, totaling 160,146, while male-led startups increased by 12.7% to 182,885 during the same period. In terms of technology startups, female technology startups numbered 23,241, an 11.3% increase from the previous year, and male technology startups increased by 7.7% to 34,366.

◆ Increase in Wholesale and Retail Startups Due to Activation of Non-Face-to-Face Consumption = By industry, the number of startup enterprises in the third quarter was highest in wholesale and retail trade (100,883), followed by real estate (76,464), accommodation and food services (43,193), and construction (16,166). Wholesale and retail trade increased by 26.8% compared to the third quarter of last year, driven by the activation of online shopping as a form of non-face-to-face consumption and increased demand for convenience foods, leading to growth in e-commerce and grocery retail. On the other hand, accommodation and food services, which are mainly offline businesses, decreased by 2.5% during the same period.

Technology startups continued to increase by 9.1% year-on-year to 57,648, driven by growth in knowledge-based service industries such as information and communication and professional, scientific, and technical services, marking two consecutive years of growth as of the third quarter. Among technology startups, manufacturing startups increased for the first time in seven quarters since the fourth quarter of 2018, supporting the overall growth in technology startups. A Ministry official explained, "This is interpreted as a shift to growth due to gradual improvements in manufacturing production and exports."