The number of active companies in South Korea has continued to rise, but the number of new businesses entering the market has decreased. Both the number of startups and the startup rate have declined, and the number of high-growth companies, which see rapid increases in revenue and employment, has also fallen. Despite the apparent growth in the total number of companies, the dynamism of entrepreneurship and growth has not recovered.
According to the '2025 Business Survival Statistics (Provisional)' released by the National Data Agency on October 22, the number of active companies with revenue or regular employees reached 7.748 million, an increase of 106,000 (1.4%) from the previous year. In contrast, the number of startups fell to 908,000, a decrease of 14,000 (1.5%). The startup rate also dropped to 11.7%, down 0.3 percentage points from the previous year.
The decline in startups has persisted for several years. The number of startups peaked at 1.069 million in 2020, then decreased to 1.034 million in 2021, 997,000 in 2022, 956,000 in 2023, and 922,000 in 2024. Last year, it fell below the 900,000 mark. The startup rate has also declined for five consecutive years, from 15.6% in 2020. The number of startups last year was the lowest in seven years, and compared to the previous year, which saw the highest number of business closures, it is difficult to see a significant improvement in the conditions for starting a business.
By industry, the decline was particularly pronounced in sectors closely tied to domestic consumption. The number of new businesses in the accommodation and food service sector fell by 11.0% to 128,000, while the real estate sector saw a decrease of 8.6% to 155,000. In contrast, the retail sector increased by 6.2% to 244,000. Overall, while the accommodation and food service sector saw a decrease of 12,000 active companies, the retail sector gained 30,000, and personal services added 19,000. The decline in startups was not uniform across all industries.
There is also a noticeable trend toward smaller businesses. The number of one-person active companies increased by 114,000 to 6.217 million, while companies with two or more employees decreased by 7,000 to 1.531 million. Among startups, one-person businesses decreased by 8,000 to 833,000, while those with two or more employees fell by 6,000 (7.6%) to 76,000. Although the total number of companies has increased, the rate of entrepreneurship accompanied by employment is shrinking more rapidly.
The age gap among business owners has widened. The number of active companies led by individuals under 30 decreased by 6.7% to 209,000, while those led by individuals in their 40s also fell by 1.6%. Conversely, companies led by individuals aged 70 and older increased by 12.7% to 810,000, and those led by individuals in their 60s rose by 3.4%.
The growth potential of businesses has weakened. Among companies with 10 or more regular employees, the number of high-growth companies—defined as those with an average annual increase of over 20% in both revenue and regular employees over the past three years—fell by 855 to 4,534. The proportion of high-growth companies also dropped to 1.8%, down 0.3 percentage points. The total number of employees in active companies increased by 109,000 to 23.406 million, but the number of employees in startups decreased by 31,000 to 1.227 million.
However, indicators of business closures have improved. In 2024, the number of closed businesses was 769,000, a decrease of 21,000 from the previous year, and the closure rate fell to 10.1%, down 0.4 percentage points. The one-year survival rate for startups was 63.9%, down 0.5 percentage points, but the five-year survival rate rose to 36.5%, an increase of 0.1 percentage points. This indicates some signs of improvement in terms of survival and business closures after starting a company.
* This article has been translated by AI.
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