The Ministry of SMEs and Startups and the Korea Institute of Startup & Entrepreneurship Development announced the results of the 2023 Startup Survey. This annual government-approved survey examines the status and characteristics of startups within seven years of establishment, using a sample of 8,000 companies. In 2023, the number of startups reached 4.9 million, accounting for 59.1% of all SMEs, marking a third consecutive year of growth. Tech-based sectors and youth entrepreneurship showed particularly strong momentum.
Compared to the previous year, the total number of startups increased by 1.5%, with tech-based startups reaching 979,000, or 20% of the total. Information and communications (up 12.5%), professional/scientific/technical services (up 6.0%), and education services (up 3.2%) saw the highest increases. Startups led by people in their 20s and 30s grew by 2.2% to 1.35 million, outpacing the overall growth rate. However, the number of employees in startups fell by 2.2% to 8.33 million, and total sales dropped by 4.3% to KRW 1,134.6 trillion.
In the preparation stage, 83.2% of founders leveraged previous work experience, while 29.0% were repeat entrepreneurs with an average of 2.2 ventures. The biggest challenges cited were securing funds (53.7%), fear of failure (45.9%), and lack of knowledge or experience (36.7%). The main motivation for starting a business was higher income (64.8%), with most startup capital (95.2%) coming from personal funds, followed by bank loans and government support.
Startups reported an operating profit margin of 5.7% and a net profit margin of 4.2%. On average, startups held five industrial property rights, and only 2.7% had overseas business experience. The government plans to inject KRW 3.5 trillion in startup support funds by 2026 to strengthen the ecosystem. This survey highlights both the current state and challenges of Korean startups, emphasizing the need for continued policy support.
The 2023 Startup Survey reveals robust growth in tech-based and youth-led startups, but also underscores ongoing challenges such as declining employment and sales. The persistent difficulties in funding and fear of failure highlight the importance of targeted financial and educational support. The government’s planned investment could be a pivotal factor in enhancing the quality and global competitiveness of Korean startups.