Entrepreneurs in their 20s and 60s Greatly Increased... 83% of Total Workforce is Full-Time Employees

Ministry of SMEs and Startups Announces '2018 Startup Business Survey' Results
Number of Startup Businesses 1.875 Million... 7.3% Increase from Previous Year
Total Employment 3.04 Million... "Relatively High Employment Stability"
70.4% of Companies Cite "Funding Securing" as Startup Obstacle

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] As of the end of 2018, the number of startup companies increased by 7.3% compared to the previous year, reaching 1,875,000. In particular, entrepreneurs aged under 20 and over 60 led the startup boom, increasing by about 15% each compared to the previous year.

The Ministry of SMEs and Startups announced the results of the '2018 Startup Company Survey' containing these details on the 11th. The Startup Company Survey is a nationally approved statistic aimed at understanding the status and characteristics of startups by growth cycle. Since 2013, the Ministry has conducted and published annual surveys on the status of startups.

This survey was conducted over one year targeting 8,000 startup companies extracted using the '2018 Business Register' data released by Statistics Korea in April last year as the population.

As of the end of 2018, the number of startup companies was 1,875,000, an increase of 127,000 (7.3%) compared to the previous year. This growth rate significantly increased compared to 2016 (0.6%) and 2017 (0.8%).

In particular, with the spread of 4th Industrial Revolution technologies, 'technology-based industries' recorded 475,000 companies, an increase of 35,000 (8.0%) compared to the previous year. By age group, entrepreneurs under 20 and over 60 increased by 16.6% and 14.7%, respectively, compared to the previous year, which is also notable.

Total sales generated by startup companies increased annually from 679.1 trillion KRW in 2016 to 705.5 trillion KRW in 2017, and 749.3 trillion KRW in 2018.

By industry in 2018, sales in technology-based industries were 251.3 trillion KRW, an increase of about 13 trillion KRW compared to the previous year. Total sales in non-technology-based industries were 498 trillion KRW, an increase of 30.7 trillion KRW compared to 2017.

The total employment in startup companies was 3,041,000, an increase of 140,000 (5.0%) compared to the previous year. The proportion of regular employees was 82.9% of the total workforce, indicating relatively high employment stability.

Startups with prior entrepreneurial experience (re-startups) accounted for 26.0% (28.2% the previous year), showing a similar level to the previous year.

The main obstacles cited by companies in the startup preparation stage (multiple responses) were 'securing funds' at 70.4%, the highest. This was followed by 'fear of failure (42.5%)', 'lack of startup knowledge, skills, and experience (31.9%)', and 'livelihood maintenance (23.2%)'.

The main motivations for starting a business (multiple responses) were 'for greater economic income (54.3%)', 'because it suits my aptitude (42.2%)', and 'to contribute to economic/social development (35.5%)', among others.

The average capital required for startups was 310 million KRW, about 20 million KRW more than the previous year. The average assets of startup companies were 510 million KRW (31.4% equity capital, 68.6% debt). Operating profit relative to sales was 7.6%, averaging 39 million KRW.