36.3% of Startups Fail Within a Year... Only Half Survive in Finance and Insurance Sectors

2019 Corporate Birth and Death Administrative Statistics Results

[Sejong=Asia Economy Reporter Joo Sang-don] It was found that 36% of startups fail to survive for one year. The one-year survival rate of individual enterprises was lower than that of corporate enterprises. In particular, more than 51% of startups in the finance and insurance industry disappeared within one year.

On the 9th, Statistics Korea announced the results of the 2019 Business Birth and Death Administrative Statistics containing this information.

According to this, among for-profit enterprises in 2019, the number of 'active enterprises' with sales or regular employees was 6,527,000, an increase of 277,000 (4.4%) compared to the previous year. Corporate enterprises increased by 5.8% to 695,000, and individual enterprises increased by 4.3% to 5,832,000.

The number of startups was 997,000, an increase of 77,000 (8.4%) compared to the previous year. The startup rate rose by 0.6 percentage points to 15.3%. Corporate startups increased by 10.3% to 76,000, and individual startups increased by 8.2% to 920,000. Accordingly, individual enterprises accounted for 92.3% of all startups. The share of corporate enterprises was 7.7%.

Based on 2018, the number of closed enterprises was 692,000, a decrease of 6,000 (-0.9%) compared to the previous year. While corporate enterprises increased by 8.5% to 45,000, individual enterprises decreased by 1.5% to 647,000.

Among active enterprises in 2018, the one-year survival rate of startups from 2017 was 63.7%, down 1.3 percentage points from the previous year. On the other hand, the five-year survival rate of startups from 2013 rose by 1.9 percentage points to 31.2%. The one-year survival rate of individual enterprises was lower. The one-year survival rate was 63.1% for individual enterprises and 72.1% for corporate enterprises.

By industry, survival rates for both one and five years were highest in electricity, gas, and steam (one year 90.6%, five years 79.3%), and lowest in finance and insurance (one year 51.9%, five years 17.6%).

In 2019, the number of high-growth enterprises with over 20% growth was 4,449, down 151 (3.3%) from the previous year. However, among high-growth enterprises, the number of gazelle enterprises with business registration of five years or less increased by 87 (7.5%) to 1,246.

This content was produced with the assistance of AI translation services.