Increase in Tech Startups Among Those Over 40... KCCI Calls for Support to Expand to Regions

As senior technology startups among those aged 40 and above increase, there have been suggestions to expand support for this by region.

At the Busan Startup Expo held last September at BEXCO in Haeundae-gu, Busan, many senior middle-aged people were also seen at the site.
[Image source=Yonhap News]

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On the 13th, the Korea Chamber of Commerce and Industry (KCCI) emphasized in its report titled "Research on Activating High Value-Added Startups by Baby Boomers within Regions" that "recently increasing senior technology startups should be attracted to local areas to increase quality jobs and promote the high value-added transformation of regional industrial ecosystems."

Analyzing domestic startup activity trends from 2016 to 2023, KCCI found that the proportion of technology startups by those in their 40s, 50s, and 60s or older increased by 3.0 percentage points, 3.8 percentage points, and 2.5 percentage points respectively. During the same period, those in their 20s increased by 0.9 percentage points, and those in their 30s showed no significant change, indicating a considerably higher proportion of technology startups among those aged 40 and above.

This is interpreted as the result of the second baby boomer generation (born 1964?1974), who have higher educational levels and expertise compared to the past, leveraging the technology and networks they have built in the industry to engage in high value-added startups. Domestic technology startups increased from 190,674 in 2016 to 221,436 in 2023, a 16.1% increase over eight years.

In particular, the increase was greater in the Seoul metropolitan area than in non-metropolitan areas. During the same period, technology startups in the metropolitan area rose from 110,254 to 135,042, a 22.5% increase, and their share of the total increased from 57.8% to 61.0%. In non-metropolitan areas, technology startups increased from 80,420 to 86,394, a 7.4% increase, but their share decreased from 42.2% to 39.0%.

By region, Gyeonggi’s share of technology startups increased the most, from 27.5% in 2016 to 31.6% in 2023, a 4.1 percentage point rise, followed by Incheon, which increased from 5.1% to 5.8%, a 0.7 percentage point rise. Seoul’s share decreased by 1.6 percentage points from 25.3% to 23.7%, but KCCI interprets this as mostly absorbed by nearby regions such as Gyeonggi, Incheon, and Chungnam. Conversely, Gyeongnam’s share fell the most among the 17 metropolitan cities and provinces nationwide, dropping 1.8 percentage points from 7.0% in 2016 to 5.2% in 2023.

Kim Ji-su, a research fellow at the Regional Balanced Development Research Center of the Korea Institute for Industrial Economics and Trade, said, "As the number of highly educated and specialized senior technology entrepreneurs increases, policies are needed to enable them to actively engage in technology startups in their regions."

The report also stated that financial support should be expanded to enable seniors to engage in high value-added startups locally. In countries like Japan and Germany, which experienced baby boomer retirements earlier than Korea, local governments actively provide funding for senior startups. In Japan, local governments cover part of the operating costs of venture plazas that serve as startup incubators, and in Germany, local state governments cover 70?80% of the operating costs of programs supporting startups by those aged 50 and above.

In Korea, support for technology startups by seniors aged 40 and above is provided through the Middle-Aged Technology Startup Centers, but the budget has shrunk from 4.2 billion KRW in 2021 to about 3.3 billion KRW in 2024, and the number of centers decreased from 33 to 27 during the same period. Additionally, proposals have been made to ease credit constraints faced by senior entrepreneurs and to strengthen educational services targeting the senior population.

The report also suggested support projects such as joint research and development (R&D) and consulting linked with local universities and companies, as well as strengthening collaboration between the central government and Middle-Aged Technology Startup Centers through matching fund support from local governments.

Cho Seong-hwan, head of the Regional Economy Team at KCCI, stated, "We need to break away from the framework of startup support policies designed before entering an aging society, ease the credit constraints faced by seniors starting businesses, and increase policy support where the central and local governments cooperate to play a catalytic role in startups."

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