40% of Venture Companies Expect This Year's Economy to Improve Compared to Last Year

'23 Gyeonggi Performance and '24 Economic Outlook Survey
Growing Calls for Policies to Ease Financial Cost Burden

Among 10 venture companies, 4 expect the economy to improve this year compared to last year.

Photo by Korea Venture Business Association

The Korea Venture Business Association announced the "2023 Venture Business Economic Performance and 2024 Economic Outlook Survey" on the 17th. A total of 560 companies responded to this survey, which was conducted to serve as basic data for exploring future support measures for venture companies' scale-up.

Regarding the "2024 economic outlook compared to 2023," 34.6% of companies predicted a "slight improvement." "Significant improvement" accounted for 5%. On the other hand, "significant deterioration" was 12.5%, and "slight deterioration" was 21.8%, indicating that the outlook for improvement was higher.

However, last year's economy was found to be in "recession" compared to 2022. When asked about the "overall economic performance in 2023 compared to 2022," 16.6% responded "significant deterioration," and 28.4% "slight deterioration," which was higher than the 31.1% who answered that it had improved (slight improvement + significant improvement).

Within venture companies, "poor domestic sales" was cited as the biggest difficulty. Regarding "current management difficulties," combining first and second priorities, "poor domestic sales" was ranked first at 33.6%, followed by "financial difficulties" (33.2%), "difficulty in securing manpower" (28.8%), and "rising labor costs" (25.7%).

Many opinions indicated that "alleviating financial cost burdens" is necessary as a policy for venture companies to grow. Looking only at the first priority for "government support policies needed for venture company growth," "alleviating financial cost burdens" had the highest response rate at 35.5%. This was followed by "expansion of research and development (R&D) support" (32.5%) and "activation of private investment such as venture investment" (12.7%).

Sung Sang-yeop, chairman of the Korea Venture Business Association, said, "2023 was a difficult year for business management due to the global 'SF compound crisis (stagflation + financial crisis)' and the contraction of the public-private venture investment market. However, the proportion of venture companies with a positive economic outlook for 2024 is high, and they are trying to overcome the economic crisis through 'diversification of business such as new business promotion' and 'expansion of new sales channels.'"

He added, "For venture companies to grow, government policies on 'alleviating financial costs,' 'expanding R&D support,' and 'activating private investment such as venture investment' must be prioritized and implemented first."