Venture and Startup Jobs Declined in Half a Year... Employment Red Flag Raised

Ministry of SMEs and Startups Announces 'Venture and Startup Employment Trends'

Im Jeong-uk, Director of the Startup Venture Innovation Office at the Ministry of SMEs and Startups, is presenting the '2022 Venture Startup Employment Trends' at the briefing room of the Government Seoul Office Annex on the 23rd.

The red light has turned on for venture and startup employment, which had emerged as the lifeline for youth jobs. After six months, it has returned to a declining trend, and female employment has also decreased.

The Ministry of SMEs and Startups announced the '2022 Venture and Startup Employment Trends' on the 23rd. Last year, the employment scale in ventures and startups increased by 8.1% (56,138 people) compared to the previous year, reaching 745,800 people. Compared to the overall corporate employment growth of 2.4% (348,469 people) during the same period, the growth rate was more than three times higher.

However, a closer look tells a different story. The Ministry of SMEs and Startups releases employment trends every six months. As of June last year, the employment scale was 761,082 people. In six months, it decreased by 15,282 people. The trend of steady growth until the first half of 2022 has been broken.

During the same period, the total number of venture and startup companies decreased from 34,362 to 33,045, a reduction of 1,317 companies. Considering that new companies are also being established, this means even more companies have closed. This has led to a shrinking overall employment scale.

Youth and female employment also declined. Over six months, youth (aged 15 to 29) decreased from 204,437 to 197,582, and females decreased from 249,411 to 243,105. One out of every three people who lost jobs during this period was either a youth or a female.

The Ministry of SMEs and Startups has explained that ventures and startups are the main players in creating youth jobs. In fact, the youth employment ratio in the venture and startup sector reaches 26.4%. This means that when ventures and startups increase employment by 10 people, at least 2 are youth. When the job market freezes, youth suffer the greatest impact.

A turnaround does not seem easy. Venture and startup investment amounted to 6.764 trillion won in 2022, down 11.9% from 7.6802 trillion won the previous year. In the third and fourth quarters, it decreased by 38.6% and 43.9%, respectively, showing a worsening situation. According to Startup Alliance, startup investment in February dropped by 75% compared to the previous year. This indicates that the industry's funding sources are drying up.

Minister Lee Young of the Ministry of SMEs and Startups said, "Although the venture investment market is facing heightened crisis sentiment due to recent events such as the Silicon Valley Bank (SVB) bankruptcy, we will do our best to continuously create quality jobs."