Young People Reluctant to Start Businesses Due to Negative Perceptions and Fear of Failure... Only 27.6% Have "Strong Intention"

Korea Economic Research Institute Commissions Monoresearch Survey
Survey Targets 1,002 Unemployed Youth Nationwide
Only 3 Out of 10 Youth Have Strong Entrepreneurial Intentions
50.8% Hold Negative Views on Startup Environment
Concerns About Fa

The majority of young people in South Korea are finding it difficult to commit to starting a business, due to negative perceptions of the domestic startup environment and concerns about the burden of failure. Only 27.6% of unemployed youth, less than half, expressed a strong intention to start a business.

The Korea Economic Research Institute announced on the 2nd that it had commissioned the market research firm Monoresearch to conduct a "Survey on the Startup Status and Promotion Factors of Unemployed Youth" targeting 1,002 unemployed young people nationwide, and confirmed these findings.

Among the unemployed youth who participated in the survey, only about 3 out of 10 (27.6%) responded that they had a "high" intention to start a business in the future. "Moderate" was 37.8%, and "low" was 34.6%. Those who reported a high intention to start a business cited reasons such as realizing their own ideas (39.1%) and the potential for increased income (35.1%). Only 17.8% said they were interested in entrepreneurship because finding a job was difficult and they had no other choice.

They mainly considered starting businesses in general service sectors such as food and beverage and retail (55.4%). This was followed by knowledge-based services (22.1%) and IT-based industries such as artificial intelligence (AI) (9.1%).

There were also many opinions expressing regret that the domestic environment to support startups is not adequately established. Negative perceptions of the startup environment stood at 50.8%, about three times higher than positive perceptions (17.2%). There was also a clear gap between the level of interest in entrepreneurship and the actual intention to start a business. This suggests that interest does not necessarily translate into action. When asked about their level of interest in entrepreneurship, 39.4% responded "high," which was higher than the 27.6% who said they had a high intention to start a business. For "moderate," 43.2% responded this way regarding interest, compared to 37.8% for actual intention, indicating a difference. The Korea Economic Research Institute analyzed, "The high level of negative perception regarding the current startup environment is a structural factor preventing high interest in entrepreneurship from leading to actual business creation."

Among the startup support policies currently implemented in Korea, expanding "financial and human resources support" was identified as the most significant factor in boosting startup intentions. If this policy were strengthened, 66.6% of respondents said their intention to start a business would increase ("significantly increase" 21.9% + "somewhat increase" 44.7%), the highest among all items. Other factors included support for global expansion (55.6%), support for startup spaces (54.5%), startup-related events (53.3%), and entrepreneurship education (52.3%). The Korea Economic Research Institute emphasized, "It is important to strengthen the overall support system centered on financial and human resources support, as well as global support, space provision, and events and education, to revitalize entrepreneurship."

When asked about their intention to start a business if AI education were expanded, more than half of all respondents (50.4%) said their intention would increase. Currently, 53.6% have had no experience with AI education for employment or entrepreneurship, indicating a clear gap in the AI education infrastructure for young people. The Korea Economic Research Institute stated, "Few unemployed youth have received sufficient AI education applicable to employment or entrepreneurship, and expanding educational opportunities will have a positive impact on their intention to start a business."

When asked if a more failure-tolerant entrepreneurial culture would increase their intention to start a business, 48.3% said yes, about four times higher than those who said no (12.2%). Only 12.1% said that the level of entrepreneurship in Korean society is high, while 39.8% said it is low. Only 6.4% said they are well aware of the concept of entrepreneurship, indicating that raising awareness and improving understanding of entrepreneurship must come first.

Jung Chul, Chief Research Officer and Head of the Center for Entrepreneurship at the Korea Economic Research Institute, emphasized, "The way to overcome the low-growth, low-vitality crisis facing our economy is to spread entrepreneurship. In particular, the Center for Entrepreneurship will continue to work on expanding a culture that tolerates failure and strengthening systematic entrepreneurship education in collaboration with schools and local communities, so that young people can take on challenges without fear of failure."