The Ministry of SMEs and Startups released the Entrepreneurship Statistics and Trends report for 2023.
According to the report, the number of new businesses that started in 2023 has increased significantly in face-to-face industries due to the lifting of social distancing measures. Additionally, online and non-face-to-face related industries continue to grow. However, the report highlights that the global economic slowdown and the “3 Highs” (high interest rates, high exchange rates, and high prices) have had a negative impact on entrepreneurship. As a result, the number of new businesses has decreased by 6.0% (78,862) as compared to 2022, with a total of 1,238,617 new businesses established in 2023.
In 2022, there was a considerable drop of 79,076 (-38.4%) in new businesses in the real estate industry. This was mainly due to the sluggish real estate economy since 2022. As a result, the total number of new businesses also decreased. However, if we exclude the real estate industry, the number of new businesses is similar to the previous year.
After the end of COVID-19, new businesses increased in the accommodation and restaurant industries (8.1%↑), and electricity, gas, and air industries (32.7%↑) as production in face-to-face industries ramped up.
Due to a decline in investment and exports caused by slow growth in both Korean and international economies, the number of new businesses has decreased in several industries. Specifically, the wholesale and retail industry has seen a 1.4% decrease, the construction industry has experienced an 8.6% decrease, and the professional, scientific, and technical service industries have seen a 9.0% decrease.
The overall number of new businesses decreased year-on-year during most months on a month-to-month basis. However, there was a slight increase in October and November. If we exclude real estate, the number of startups increased from January to May and again from October to November.
Entrepreneurs decreased across all age groups except for real estate. Excluding real estate, entrepreneurs increased in all age groups except those in their 40s (-2.8%) and 50s (-1.5%).
In 2023, the number of startups in the technology sector declined by 3.5% YoY to 221,436 while the share of tech-based startups among all startups increased by 0.5%p compared to the previous year.
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