Domestic Small and Medium Enterprises Increased, but Total Sales Remain Similar

72,860,023 Locations Up 5.7%
Some Employment and Sales Decline Due to COVID-19
Concentration of Company Headquarters in the Seoul Metropolitan Area Intensifies

[Image source=Yonhap News]

[Asia Economy Reporter Kwak Min-jae] The number of small and medium-sized enterprises (SMEs) in South Korea has increased by 5.7% compared to the previous year, reaching 7,286,023. Although the number of SMEs grew, total employment and sales only saw slight increases due to declines in employment and sales in certain sectors caused by COVID-19.

According to the "2020 Basic Statistics on SMEs" released by the Ministry of SMEs and Startups on the 28th, as of the end of 2020, SMEs in South Korea accounted for 7,286,023 businesses, representing 99.9% of all companies. SME employees numbered 17,541,182, accounting for 81.3% of all company employees, and sales amounted to 2,673.3019 trillion KRW, representing 47.2% of total corporate sales.

Notably, due to the impact of COVID-19, some sectors such as accommodation and food services, arts, sports, and leisure-related services saw an increase in the number of companies, but employment and sales decreased. As a result, total SME employment and sales increased by only 1.5% and 0.7%, respectively.

The number of accommodation and food service businesses was 840,334, a 3% increase from the previous year (816,184), but the number of employees (1,705,225) and sales (124.4003 trillion KRW) decreased by 6.7% and 5.1%, respectively, compared to the previous year. The number of arts, sports, and leisure-related service businesses also rose by 3.4% to 153,05 from 145,326 the previous year, but the number of employees (238,943) decreased by 4.1%, and sales (15.7474 trillion KRW) dropped by 11.8%.

The concentration phenomenon in the Seoul metropolitan area has somewhat intensified compared to the previous year. The number of SMEs located in the metropolitan area was 3,769,943, accounting for 51.7% of all companies, up 0.4 percentage points from the previous year. SME employees in the metropolitan area numbered 9,469,368, representing 54% of all company employees, an increase of 0.3 percentage points from the previous year. Sales reached 1,560.5395 trillion KRW, accounting for 58.4% of total corporate sales, up 0.3 percentage points from the previous year.

The Basic Statistics on SMEs is a nationally approved statistic compiled annually by the Ministry of SMEs and Startups based on the Statistics Korea’s Business Register. Starting this year, the statistics reflect amendments to the SME Basic Act after 2020, including SME cooperatives as SMEs and excluding companies belonging to publicly disclosed business groups.

No Yong-seok, Director of SME Policy at the Ministry of SMEs and Startups, said, “This year, we made efforts to improve the timeliness and accuracy of the statistics by advancing the publication schedule of the Basic Statistics on SMEs and excluding mid-sized companies from SMEs.” He added, “We will continue to identify areas for improvement so that the Basic Statistics on SMEs can be widely utilized in SME policy fields.”

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