South Korea's Entrepreneurial Spirit Index Rises for 2 Consecutive Years... Achieves 6th Place Worldwide

Global Entrepreneurship Research Association Announces 2021 Global Entrepreneurship Monitor Results

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Kwon Chil-seung, hereinafter referred to as the Ministry) announced on the 13th that South Korea's entrepreneurship index rose by 0.21 points from the previous year to 5.7 points (out of 10) in the '2021 Global Entrepreneurship Monitor (GEM)' survey released by the Global Entrepreneurship Research Association (GERA). This marks a consecutive two-year increase since the index was first published at 5.13 points in 2019. Additionally, South Korea ranked 6th among the 50 countries surveyed, climbing three places from the previous year. The national ranking also rose for two consecutive years since 2019, when it was 15th.

The Global Entrepreneurship Monitor (GEM) aims to diagnose the level of entrepreneurship by country and analyze the correlation between entrepreneurship and national economic growth. It is conducted through surveys targeting experts and the general adult population in each country. This survey involved 50 countries worldwide, and in South Korea, it was conducted from May to July 2021 through face-to-face, telephone, and online surveys targeting 68 experts and 2,000 general adults.

For the expert survey, a total of 50 countries participated, and indices for nine items related to national conditions were published on a 10-point scale. Among the nine items, six showed an increase from the previous year, including 'appropriateness of government regulation,' 'acceptance of entrepreneurship,' 'entrepreneurship education level in primary and secondary schools,' and 'ease of market entry.' The 'accessibility of services such as internet and transportation' slightly decreased compared to the previous year, while 'quantitative level of government and private funding' and 'technology transfer from universities and research institutions' remained at the previous year's level.

A total of 47 countries participated in the general adult survey, which investigated and published response rates for detailed items in five areas: entrepreneurial attitude, motivation, and activity. In the entrepreneurial attitude and awareness category, the proportions of respondents who answered that they 'possess entrepreneurial capabilities,' 'find it easy to start a business,' and 'plan to start a business within three years' increased compared to the previous year, while the proportion who answered that 'there will be an opportunity to start a business within six months' slightly decreased. Furthermore, the proportion of respondents who expressed 'fear of failure' was 14.7%, making South Korea the second-lowest country in terms of fear among the 47 countries surveyed.

Regarding entrepreneurial motivation, the proportions of respondents who answered 'income generation' and 'livelihood maintenance' increased from the previous year, while those who answered 'innovative mindset' and 'family business succession' decreased. Entrepreneurial activity responses showed increases in those 'currently employed at startups within 42 months of establishment' and those 'employed at companies older than 42 months,' while the proportion of those 'engaged in entrepreneurial activities while employed' remained at 1.5%, the same as the previous year.

In the entrepreneurship impact category, responses indicating 'plans to hire six or more employees within the next five years' and 'exports accounting for 25% or more of total sales' increased compared to the previous year. The item 'consider social and environmental impacts in decision-making' was newly added in 2021 and recorded 60.5% and 57.5%, respectively. Additionally, the response that 'COVID-19 created new opportunities' increased from the previous year, while responses indicating 'COVID-19 caused changes in household income' and 'COVID-19 made starting a business difficult' decreased. The newly added item 'use digital technology when selling products and services' was surveyed at 51.0% in 2021.

Cha Jeong-hoon, Director of the Startup Venture Innovation Office at the Ministry, evaluated, "Despite the global difficulties caused by COVID-19, the entrepreneurial and venture spirit in South Korea did not cool down thanks to the innovation and challenging spirit of startups centered on youth, that is, entrepreneurship." He added, "This survey provided an opportunity to reaffirm the level and importance of entrepreneurship in South Korea, and we will strive to continuously maintain and develop the startup and venture boom that has come to us through the sustained spread of entrepreneurship."

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