In the First Half of This Year, 'Accommodation and Food Service' Startups Decreased While 'Real Estate' Increased

Source=Ministry of SMEs and Startups

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[Asia Economy Reporter Kim Daeseop] In the first half of this year, startups in the accommodation and food service industry decreased, while those in the real estate industry increased. Despite the COVID-19 pandemic, the total number of startups in the first half of this year was found to have increased.

According to the '2020 First Half and June Startup Trends' announced by the Ministry of SMEs and Startups on the 27th, the number of startups in the first half of this year was 809,599, an increase of 167,111 (26.0%) compared to 642,488 in the same period last year. The order was 'real estate' with 292,810 (36.2%), 'wholesale and retail trade' with 186,748 (23.1%), 'accommodation and food service' with 82,592 (10.2%), and 'construction' with 34,065 (4.2%).

Looking at major industries, startups in accommodation and food service in the first half of this year decreased by 11.9% compared to the same period last year due to social distancing and restraint on dining out caused by the spread of COVID-19. On the other hand, real estate startups increased by 131.6% compared to the same period last year due to an increase in business registrations following taxation on housing rental income.

The significant increase in real estate startups led the overall growth in startups in the first half of this year. Wholesale and retail trade also increased by 10.2% compared to the same period last year, centered on e-commerce, following the growth of online shopping.

Major Industry Shares of Startups in the First Half of 2020

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Technology startups are also continuing their steady upward trend. Following the acceleration of digital transformation after COVID-19, knowledge-based service industries such as information and communication, and professional, scientific, and technical services increased, resulting in 116,280 startups, up 2,798 (2.5%) compared to the same period last year.

By age group, startups in the first half of this year increased across all age groups, centered on middle-aged and older adults. The order of startups was '40s' with 212,601 (26.3%), '50s' with 206,307 (25.5%), '30s' with 159,232 (19.7%), '60 and above' with 149,725 (18.5%), and 'under 30' with 81,057 (10.0%).

By organizational type, corporate startups in the first half of this year increased by 11,249 (20.6%) to 65,768 compared to the same period last year. Individual startups recorded 743,831, an increase of 155,862 (26.5%) during the same period. By gender, female startups increased by 28.0% to 378,847, while male startups increased by 24.4% to 430,501 compared to the same period last year.

By region, startups in the first half of this year were concentrated in 'Gyeonggi' with 230,332 (28.5%) and 'Seoul' with 170,115 (21.0%). 'Jeju' with 12,209 (1.5%) and 'Sejong' with 6,236 (0.8%) were relatively low. Compared to the same period last year, all regions showed increases, including Sejong (47.0%), Incheon (40.2%), Daejeon (36.9%), and Seoul (32.4%).

This startup trend data was compiled by the Ministry of SMEs and Startups by classifying business registration databases (Statistics Korea, administrative data) from 17 cities and provinces nationwide by industry, age, organizational type, gender, and region.

Minister Park Young-sun of the Ministry of SMEs and Startups is speaking about the trends of startup companies in the first half of 2020 through an e-briefing at the Government Seoul Office Building on the 27th.

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As of June this year, the total number of startups was 128,696. The order was 'wholesale and retail trade' with 33,686 (26.2%), 'real estate' with 32,989 (25.6%), 'accommodation and food service' with 16,091 (12.5%), and 'construction' with 5,773 (4.5%). Although new startups were sluggish in April and May due to the ongoing impact of COVID-19, they turned to an increase in June. Real estate and wholesale and retail trade increased compared to the same month last year.

Park Young-sun, Minister of SMEs and Startups, explained, "Looking at the increase and decrease by industry, recent changing trends are reflected. Wholesale and retail trade increased by 10.2% compared to the first half of last year, centered on e-commerce such as online shopping malls, and information and communication increased by 15.6% in ICT fields such as software and information services." She added, "It can be said that the major shift to a digital economy, which the Ministry of SMEs and Startups emphasizes and aims for, was observed in this startup trend result."

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