SMEs Hit Record High of 8.5 Million, but Hiring Stalls

[Financial News] The number of small and medium-sized enterprises in 2024 came close to 8.5 million, marking an all-time high. However, about 80% of all SMEs were classified as one-person businesses, so the increase did not translate into job growth.
According to the "2024 Basic Statistics on SMEs," released on the 31st by the Ministry of SMEs and Startups, the number of SMEs in 2024 stood at 8,499,552, up 200,637, or 2.4%, from 8,298,915 a year earlier.
The number of SMEs has continued to rise steadily, from 7,286,023 in 2020, when the ministry reflected revisions to the Framework Act on Small and Medium Enterprises, to 7,713,895 in 2021, 8,042,726 in 2022, and 8,298,915 in 2023. SMEs accounted for 99.9% of all companies.
By contrast, the number of SME workers in 2024 rose by just 7,157, or 0.04%, to 19,124,806 from the previous year.
The slowdown in employment growth despite the increase in company numbers appears to be linked to the rise in one-person businesses. In 2024, one-person SMEs totaled 6,666,023, up 225,754, or 3.5%, from a year earlier. That accounted for 78.4% of all SMEs. Meanwhile, companies with two or more workers, which create jobs, fell by 25,117, or 1.4%, to 1,833,529.
By organizational type, sole proprietorships increased by 167,506, or 2.3%, to 7,411,042. Corporate businesses rose by 33,131, or 3.1%, to 1,088,510.
By industry, wholesale and retail posted the largest increase in the number of companies, up 38,232, or 1.7%. It was followed by real estate, up 31,651, or 2.6%; electricity, gas and steam, up 26,511, or 15.8%; professional, scientific and technical services, up 20,934, or 6.3%; and other personal services, up 20,328, or 4.7%.
Manufacturing, however, fell by 5,715, or 0.9%. Business facility management and accommodation and food services also declined, by 3,305, or 1.7%, and 1,770, or 0.2%, respectively.
Total sales of SMEs reached 3,324.202 trillion won, up 22.9475 trillion won, or 0.7%, from the previous year.
In particular, the construction sector was hit by the economic slowdown, with sales falling by 11.5 trillion won, or 3.2%, and the number of workers dropping by 66,181, or 3.5%, from a year earlier.
Regionally, more than half of SMEs were located in the Capital Region. SMEs in the Capital Region numbered 4,477,130, up 114,951, or 2.6%, from the previous year. They accounted for 52.7% of all SMEs. SMEs outside the Capital Region totaled 4,022,422, up 85,686, or 2.2%.
[email protected] Kim Hyun-chul Reporter