Despite COVID-19, Employment in 'Venture Companies' Increased Significantly

Venture Companies Increase by 53,000, Youth by 35%, Women by 43%... ICT Services and Contactless Sectors Drive Growth

Comparison of Employment Status in Venture Companies.
[Graphic by Ministry of SMEs and Startups]

[Asia Economy Reporter Kim Jong-hwa] Employment in venture companies significantly increased last year. In particular, employment of youth under 30 and women saw substantial growth, with the information and communication technology (ICT) service sector and non-face-to-face fields driving the overall employment increase.

The Ministry of SMEs and Startups (Minister Kwon Chil-seung) announced on the 16th that it analyzed employment trends of venture companies and companies receiving venture investments based on employment insurance subscription data from the Korea Employment Information Service, revealing these results.

As of the end of last year, among 39,511 venture companies, 36,885 companies had valid employment information, with total employment reaching 724,138. This is an increase of 52,905 from 671,233 at the end of 2019, representing a 7.9% employment growth rate. The average employment increase per venture company rose from 18.2 to 19.6 during the same period, an increase of 1.4 employees.

Youth and Women Employment Growth... ICT Service Sector Leads

The increase in employment of youth and women is also notable. At the end of last year, youth employment aged 15 to 29 accounted for 188,056, representing 26.0% of total employment in venture companies. Compared to 169,527 at the end of the previous year (2019), youth employment growth accounted for 18,529, or 35.0% of the total employment increase (52,905).

The youth employment growth rate was 10.9%, 3.0 percentage points higher than the overall employment growth rate of 7.9%, with an increase of 0.5 employees per company. While the average employment increase per company was 1.4, venture companies hired one youth under 30 for every three new hires.

During the same period, female employment reached 226,615, accounting for 31.3% of the total. Compared to 203,540 at the end of the previous year, female employment increased by 23,075, about 43.6% of the total employment increase. The female employment growth rate was 11.3%, 3.4 percentage points higher than the overall 7.9%, with an increase of 0.6 employees per company.

By industry, ICT services added 21,185 jobs, distribution and services 9,066, and bio-medical 4,942, with these three sectors driving the overall employment growth.

Clear Employment Creation Effect in Non-Face-to-Face Sector

Employment in non-face-to-face companies, which utilize information and communication technology, artificial intelligence, big data, and other technologies to deliver products and services remotely, improve management efficiency, and enhance user convenience, also increased significantly.

Among 36,885 companies with valid employment data, 7,430 were non-face-to-face venture companies, employing 175,824 as of the end of last year. Employment in non-face-to-face venture companies accounted for about 24.3% of total employment, up 1.6 percentage points from the previous year. The employment growth rate in this sector was 15.5%, surpassing the overall venture company growth rate of 7.9% and the face-to-face sector's 5.6%.

Notably, the employment increase per company was also higher in the non-face-to-face sector (+3.2 employees) compared to the overall (+1.4) and face-to-face (+1.0) venture companies, highlighting the stronger employment creation effect of non-face-to-face companies.

Looking into sub-sectors of non-face-to-face, employment increased by 7,221 in foundational technologies related to big data and IT, 5,083 in consumer lifestyle, and 3,342 in entertainment.

Comparison of Employment in Non-Face-to-Face Sector Venture Companies.
[Graphic by Ministry of SMEs and Startups]

Companies Receiving Venture Investment Show 30.9% Employment Growth

Among 2,130 companies that received venture investment last year, 1,730 had valid employment data, with total employment reaching 53,452 as of the end of last year. This is an increase of 12,624 from 40,828 at the end of the previous year, representing a 30.9% employment growth rate.

The average employment increase per company receiving venture investment rose from 23.6 at the end of the previous year to 30.9, an increase of 7.3 employees. The employment increase effect per 1 billion KRW investment was 3.4 employees. Youth employment accounted for 19,715, or 36.9% of total employment, and female employment was 20,311, representing 38.0% of total employment.

By industry, the top three sectors receiving venture investment leading employment growth were ICT services (4,700), distribution and services (2,721), and bio-medical (1,612). Employment in non-face-to-face invested companies accounted for 58.5% of total employment, an increase of 2.3 percentage points from the previous year.

Regarding employment growth rates, non-face-to-face invested companies had a 36.4% increase, surpassing the overall (30.9%) and face-to-face (23.8%) sectors. Employment increase per company was also highest in the non-face-to-face sector at 9.1 employees, compared to 7.3 overall and 5.2 in the face-to-face venture investment companies.

The top five regions for employment growth were Seoul (7,407), Gyeonggi (2,754), Daejeon (618), Busan (291), and Gyeongbuk (261), with venture investment scale rankings matching the employment growth rankings in these regions.

Minister Kwon Chil-seung of the Ministry of SMEs and Startups stated, "Despite the economic difficulties caused by the COVID-19 crisis last year, innovative ventures and startups played a strong role as a pillar of employment by significantly increasing overall employment. This year, we will continue to promote policies such as Silicon Valley-style venture finance systems, the K-Unicorn Project, and the establishment of the Smart Korea Fund to enable innovative ventures and startups to create more jobs and become the main drivers of our economy's leap and recovery."

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