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

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

On the 24th, Park Young-sun, Minister of SMEs and Startups, is giving a briefing on the trends of startup companies in the third quarter of 2020.

[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 those 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 pandemic, more people in their 20s are choosing to challenge 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 this year reached 343,128, a 13.3% increase compared to the same period last year. Although the growth rate of startups in the real estate sector, which influenced the increase in startups in the first half of the year, slowed somewhat in the third quarter, significant increases in information and communication, wholesale and retail sectors drove the overall growth in startups.

◆ 30% Increase in Startups by Those in Their 20s = Notably, startups increased across all age groups, but those under 30, based on new attempts, saw a significant rise. Startups by those under 30 in the third quarter numbered 46,809, up 29.9% year-on-year. Following this, the 60 and older group increased by 15.8%, the 30s by 13.4%, the 50s by 9.0%, and the 40s by 8.8%. This highlights the remarkable increase in startups by people in their 20s. Considering that startups by those under 30 increased by 13.8% year-on-year until the first half of this year, the growth rate among people in their 20s is accelerating. The sectors where startups by those under 30 increased include wholesale and retail (up 47.8%), accommodation and food services (up 13.1%), business facility management services (up 38.3%), and information and communication (up 29.9%). Expanding the scope to include startups by those aged 39 and under, classified as youth, the number reached 125,625, a 19.0% increase from last year, driving the overall growth in startups.

By gender of the representative, female-led startups increased by 14.1% year-on-year to 160,146, while male-led startups rose by 12.7% to 182,885 during the same period. In terms of technology startups, female technology startups increased by 11.3% to 23,241, and male technology startups grew by 7.7% to 34,366.

◆ Increase in Wholesale and Retail Startups Due to Activation of Non-Face-to-Face Consumption = By industry, third-quarter startups were led by wholesale and retail (100,883), real estate (76,464), accommodation and food services (43,193), and construction (16,166). Wholesale and retail startups 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, with growth in e-commerce and grocery retail sectors. Conversely, accommodation and food services, which are mainly offline businesses, decreased by 2.5% during the same period.

Technology startups continued to increase in knowledge-based service sectors such as information and communication and professional, scientific, and technical services, rising 9.1% year-on-year to 57,648, 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."

Minister Park Young-sun of the Ministry of SMEs and Startups emphasized in a briefing that "the monthly growth rate of startup enterprises has rebounded since hitting a low point in April and has maintained a favorable upward trend." She added, "The increase in technology startups is particularly a positive figure." Minister Park further stated, "The third-quarter startup enterprise trends show a very hopeful result demonstrating the sustainability of the startup ecosystem. The Ministry will spare no effort to support startup growth in various fields, including actively discovering promising startups in the non-face-to-face sector. We will play a catalytic role to ensure that startups continue to emerge even amid the risk of a COVID-19 resurgence."