Startup Firms Down 1.5% in the First Half, but Tech-Based Startups Surge 14.2%

[Financial News] The number of startup firms in the first half of this year fell 1.5% from a year earlier. The decline was driven by fewer startups in wholesale and retail, as well as transportation and warehousing. However, tech-based startups, including those in information and communications, rose 14.2%.
According to the 'Startup Trends' released by the Ministry of SMEs and Startups on the 27th, the number of startup firms from January to June this year stood at 565,640, down 1.5%, or 8,880, from a year earlier. That is the lowest figure since related statistics began in 2016.
The number of startup firms in the first half has continued to decline, from 695,891 in 2022 to 650,504 in 2023, 622,760 in 2024, and 574,520 last year.
The sharpest declines were seen in sectors highly sensitive to economic conditions. Startups in wholesale and retail fell 10.7%. Transportation and warehousing dropped 5.8%, while personal services decreased 3.8%.
By contrast, tech-based startups increased. Startups in information and communications jumped 59.4% year on year to 33,565.
Professional, scientific and technical services rose 6.9%, and educational services increased 4.4%. Tech-based startups, combining manufacturing and knowledge-based services, reached 123,418, up 14.2%.
Tech-based startups also accounted for a larger share of all startups, rising from 18.8% in the first half of last year to 21.8% this year, up 3.0 percentage points.
By industry, wholesale and retail had the largest share at 32.8%. It was followed by lodging and food services at 12.3%, real estate at 9.6%, information and communications at 5.9%, personal services at 5.7%, and transportation and warehousing at 5.2%.
On a monthly basis, the number of startup firms rose 18.7% in January and 2.8% in March from a year earlier, but declined in February and from April to June.
By age group, startups by people aged 60 and older increased 2.4% to 92,369, while all other age groups recorded declines.
Startups by those under 30 fell 3.9%. The figures also dropped 2.3% for people in their 30s, 3.2% for those in their 40s, and 0.8% for those in their 50s.
By business type, sole proprietorships numbered 515,289, accounting for 91.1% of the total. Corporate businesses totaled 50,351, or 8.9%. Sole proprietorships fell 2.1% from a year earlier, while corporate businesses rose 4.4%.
By region, Gyeonggi Province accounted for 168,655 startups, or 29.8% of the total, while Seoul had 116,352, or 20.6%.
The statistics were compiled based on business registration data from the National Tax Service (NTS). This year, the revised 11th Korean Standard Industrial Classification was applied.

[email protected] Kim Hyun-cheol Reporter