Startups Reach 4.9 Million, Making Up 59% of SMEs... 8.33 Million Employees

Ministry of SMEs and Startups Releases 2023 Startup Survey Results
Startups Within 7 Years of Founding Record 1,134 Trillion Won in Sales

A recent survey found that domestic startups have been increasing for three consecutive years, now accounting for 59% of all small and medium-sized enterprises (SMEs). The number of startups reached 4.9 million, employing 8.33 million people.

On January 20, the Ministry of SMEs and Startups and the Korea Institute of Startup & Entrepreneurship Development announced the results of the "Startup Business Survey" for 2023. Startups are defined as companies within seven years of founding.

59.1% of SMEs in 2023 are Startups

The survey showed that as of 2023, the number of startups increased by 1.5% year-on-year to 4,902,000, accounting for 59.1% of all SMEs. The number of startups has been on the rise for three consecutive years since 2021.

Notably, technology-based startups numbered 979,000, making up 20.0% of all startups. The number of startups increased most in information and communications (up 12.5%), professional, scientific and technical services (up 6.0%), and educational services (up 3.2%). Growth was also seen in electricity, gas, steam and air conditioning supply (up 16.3%), wholesale and retail trade (up 4.7%), and agriculture, forestry, and fisheries (up 4.7%). By age group, startups founded by people in their 20s and 30s numbered 1,352,000, up 2.2% from the previous year, exceeding the overall startup growth rate.

As of 2023, startups employed 8.33 million people, a decrease of 2.2% from the previous year. This represents 43.6% of all SME employees. Technology-based startups employed 2,499,000 people, accounting for 30.0% of all startup employees.

Total sales of startups amounted to 1,134.6 trillion won, representing 34.4% of all SME sales. This figure is a 4.3% decrease from the previous year. Technology-based startups generated 320 trillion won in sales, making up 28.2% of total startup sales. While technology-based startups account for 20.0% of all startups, their share of employment and sales is higher at 30.0% and 28.2%, respectively, indicating stronger business performance compared to non-technology-based startups, according to the Ministry of SMEs and Startups.

Average Required Capital for Startup: 206 Million Won

A survey of 8,000 startups found that 83.2% of founders started their businesses based on prior work experience. The proportion of entrepreneurs who started a business again after a previous attempt was 29.0%, with the average number of startups per person at 2.2.

During the preparation phase, founders cited "difficulty securing funds (53.7%)" as the biggest obstacle. Other challenges included "fear of failure (45.9%)" and "lack of knowledge, skills, and experience (36.7%)."

Most founders started their businesses "for higher economic income (64.8%)," followed by "work suited to their aptitude (41.8%)," "favorable long-term prospects (19.1%)," and "a flexible work environment (14.2%)."

The average capital required to start a business was 206 million won. This funding was primarily sourced from "personal funds (95.2%)," but also included "bank and non-bank loans (28.3%)," "private loans (8.8%)," and "government loans and guarantees (8.4%)."

Cho Kyungwon, Director of Startup Policy at the Ministry of SMEs and Startups, stated, "In 2023, as the country transitioned out of the pandemic and daily life returned to normal, the foundation for startups expanded. However, due to internal and external economic uncertainties, startups likely faced challenging business conditions." He added, "In 2026, the government and private sector will work together to make it a year of growth for startups, going beyond recovery, by investing a record-high startup support budget of 3.5 trillion won through a pan-government initiative."