"Afraid It Might Fail"... Startups Hit 'All-Time Low' Since 2016

Number of Startups in 2024 Hits Lowest Level Since 2016
Domestic and global economic slowdown, continued low birth rates, and aging population cited as main factors

The number of startups established last year was recorded as the lowest since the statistics began in 2016. Factors such as domestic and international economic slowdown, consumption contraction due to the so-called 'three highs'?high interest rates, high exchange rates, and high inflation?as well as continued low birth rates and aging population influenced this trend.

On the 28th, the Ministry of SMEs and Startups announced the '2024 Startup Business Trends' report containing these details. The number of startups last year was 1,182,905, a 4.5% decrease compared to the previous year. This is the lowest figure since the statistics began in 2016, when there were 1,190,177 startups. Looking at the past five years, the number of startups has been declining annually after peaking at 1,484,667 in 2020.

By industry, startups decreased in wholesale and retail trade (down 7.1%), accommodation and food services (down 7.7%), and real estate (down 8.6%). The decline in wholesale and retail startups was influenced by economic sluggishness, consumption slowdown, and incidents such as the Tmon and Wemakeprice (Timep) crises. In accommodation and food services, startups declined due to price increases and reduced consumer spending power caused by the continued 'three highs,' as well as intensified competition. Real estate also saw a continued decrease in new startups due to sustained high interest rates, high exchange rates, and economic downturn. A Ministry of SMEs and Startups official explained, "It appears that the challenging domestic and international economic conditions, including high inflation, high interest rates, real estate slump, rising raw material prices, and domestic demand slowdown, have had a complex impact."

On the other hand, due to increased demand for personal caregiving services, building management and cleaning, paradigm shifts in the advertising market such as short-form commerce, online video services (OTT), retail media, and base effects, new startups in personal services (up 8.0%), professional, scientific, and technical services (up 2.5%), and business facility management (up 3.0%) increased compared to the previous year.

By age group, startups decreased in all age groups except those aged 60 and over. Meanwhile, technology-based startups for the year 2024 totaled 214,917, a 2.9% decrease from the previous year, but the proportion of technology-based startups within total startups rose by 0.3 percentage points compared to the previous year, marking a record high.

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