Total SME Sales Reach 2,085 Trillion Won... 7.92 Million Employees

Ministry of SMEs and Startups Announces Revision and Results of the "2024 SME Status Survey"
Average Business Operation Period: 14.3 Years, Average Age of Business Owners: 55

As of 2024, the total sales of small and medium-sized enterprises (SMEs) in South Korea amounted to 2,085 trillion won. The number of employees was 7.92 million, and the average years in business was 14.3 years.

On January 9, the Ministry of SMEs and Startups announced the results of the "2024 SME Survey." This annual survey is conducted to assess the overall status of SMEs, including their management conditions, and is used as basic data for formulating SME support policies.

This year’s survey underwent a comprehensive revision in terms of target, methodology, and the content of published results. Previously, the survey included companies with annual sales exceeding 500 million won, resulting in a mix of some micro-enterprises and some small enterprises. From this year, however, the target group has been clearly defined as "SMEs excluding micro-enterprises." The number of surveyed industries was also expanded from 10 to 16 major sectors, based on industrial classification, effectively creating a survey system that covers almost all industries. The Ministry explained that, due to differences in the population and sample composition compared to previous surveys, direct numerical comparisons with last year’s results are difficult.

According to the results of this survey, in 2024, SMEs (excluding micro-enterprises) recorded total sales of 2,085 trillion won and employed 7.92 million people. By industry, both sales and employment were concentrated in wholesale and retail trade, as well as manufacturing. When compared to the "Basic Statistics on SMEs," which is a fundamental statistical resource covering all registered businesses, total sales showed a slight increase from 2,024 trillion won in 2023, while the number of employees showed a slight decrease from 8.14 million in 2023.

The average years in business was 14.3 years, with 60.4% of companies having been in operation for "10 years or more," the largest share. Those in business for "less than 5 years" accounted for 12.9%. The average age of business owners was 55, with "those aged 50 or older" making up 70.2% of all owners. "Those aged 60 or older" accounted for 33.3%, a relatively high proportion compared to "those under 40" (4.9%).

Regarding research and development (R&D) expenditure, the total was 16.4 trillion won, and the proportion of SMEs conducting R&D stood at 15.1%. By industry, manufacturing accounted for 8.5 trillion won (51.7%), followed by information and communications at 3.4 trillion won (20.7%). Within each industry, the proportion of companies conducting R&D was higher in information and communications (49.0%) than in manufacturing (35.9%).

In terms of subcontracting transactions, 16.7% of all SMEs acted as subcontractors, supplying goods or services through such transactions. Subcontracting sales accounted for 18.8% of their total sales. The total sales of subcontractors amounted to 584 trillion won, of which 393 trillion won came from transactions with principal contractors. The dependency rate on principal contractors among subcontractors was 67.3%. By industry, manufacturing had the highest share of subcontractors both in terms of number of companies (47.9%) and sales (43.3%). The dependency rate on principal contractors in manufacturing was also high at 72.5%, compared to other industries. When asked about difficulties experienced in subcontracting (multiple responses allowed), the most common issues were "failure to reflect increases in raw material prices in supply prices (38.6%)," "frequent orders (26%)," and "shortened or tight delivery deadlines (26%)."

Regarding the main findings of this survey, the Ministry of SMEs and Startups stated that it plans to focus policy support and institutional improvements on fostering a growth ecosystem and promoting mutual cooperation among SMEs. Kim Daehee, Director General for SME Strategy Planning at the Ministry, said, "This revision of the survey is significant as it provides foundational data for understanding the actual business conditions and challenges faced by SMEs, and it enhances the statistical basis needed for SME policy analysis and formulation." He added, "Based on the revised survey results, we will continue to identify and implement effective, customized support policies, while also further refining the SME survey in greater detail."