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Friday, July 12, 2024

S.Korean Gov.Report : Average Employment Growth Rate of Ventures and Startups Higher than That of All Companies

South Korea
In 2022, employment at ventures and startups increased by 8.1%, which exceeded three times the average rate of increase (2.4%) in employment at all companies. Employment increased by 29.8% at ventures and startups that received venture investments.

An employment increase of 3.2 persons per KRW 1 billion in venture investments
Notably, youth (aged 15~29) employment at ventures and startups during the same period increased by 3.6%, contributing to the youth‘s entry into society, while the average youth employment rate at all companies decreased by 1.2%.

The Ministry of SMEs and Startups (Minister LEE Young) has released the 2022 trend report of employment* at ventures and startups.

Employment: Employment that involves signing an employment agreement (‘regular’
or ‘temporary’ jobs) or obtaining employment insurance

Ventures and Startups: Venture businesses defined by the Act on Special Measures for
the Promotion of Venture Businesses and companies that have received venture

As of the end of 2022, 33,000 ventures and startups employed 746,000 people, an increase of 8.1% (56,000 people) over the previous year. This figure exceeds three times the rate of increase (2.4%) in employment at all companies.

The employment growth rate was 29.8% (19,000 people) at 2,000 ventures and startups that received venture investments in 2022, which is about 12 times the rate of employment increase at all companies. This indicates a considerable contribution of venture investments to job creation.

Venture investment: An investment made through startup investment companies and venture investment associations under the Ministry of SMEs and Startups

In 2022, 15 unicorns (companies with a corporate value of over KRW 1 trillion without being listed on the stock market) employed about 9,000 people, an increase of 22.9% (18,000 people, or approximately 100 people per company) over the previous year.

In terms of employee age and gender, ventures and startups employed more
youths* and women than other types of companies.
Ages 15~29: The age range was determined in accordance with the Special Act on the Promotion of Youth Employment. This was upon consulting the age group standards used for the statistics of the Ministry of Employment and Labor (i.e.,survey on working conditions by employment type)

In 2022, ventures and startups employed 198,000 youths, a 3.6% increase (6,800 people) over the previous year. The increase is in comparison to a 1.2% decrease in youth employment at all companies, which was caused by the reduced youth population*, the trend of entering society at an older age, and reduced recruitment.

Youth population (unit: 10,000 people, Ministry of the Interior and Safety): (2021) 900.1 →
(2022) 876.2 ( 2.7%)△

Other age group population: (2021) 4,263.8 (2022) 4,267.7→ (+0.1%)
During the same period, ventures and startups employed 243,000 females, a 10.0% increase (22,000 people) over the previous year. The increase is much larger than the female employment growth rate for all companies (2.9%).

Regarding the employment status of ventures and startups by industry in 2022, fast-growing industries in content and digital fields showed high employment growth.

The video/performance/record industry, which is receiving much attention due to the global popularity of K-content, such as dramas and music, showed the highest employment growth rate at 15.4% (1,764 persons).

The video/performance/record industry was followed by the online game industry (14.9%, +1,820 persons) in which the demand for employment grew due to the development of digital technology, the ICT services industry (12.3%, +19,177 persons), and the distribution/services industry (10.0%, +8,924 persons).
For the manufacturing industry, the employment growth rate was around 5% (electricity/machinery/equipment: 5.8%, chemicals/materials: 5.0%, ICT manufacturing: 4.3%), which was lower than the average employment growth rate of all ventures and startups (8.1%).

The employment growth rate was particularly high among the ventures and startups that received venture investments. Those that received a larger investment employed more people.
For the ventures and startups that received venture investments, the year-on-year employment growth rate was 16.5%, which was over 2.5-4 times higher than that of other ventures and startups. More people were employed in industries* and cities/provinces** that attracted larger venture investments.

CT Services (1st in investment, 3rd in employment), Video/performance/record (2nd in
investment, 1st in employment), Online game (3rd in investment, 2nd in employment)
** Seoul (1st in investment, 1st in employment), Gyeonggi (2nd in investment, 2nd in employment), Daejeon (3rd in investment, 3rd in employment)

Minister LEE Young stated, “Despite the economic slowdown caused by high interest rates and high prices, the employment growth rate was higher at ventures and startups compared to all companies and they contributed to helping the youth and women enter society to some extent.”
LEE added, “There is a heightened sense of crisis in the venture investment market due to the recent bankruptcy of Silicon Valley Bank (SVB) and other difficulties. The government is doing its utmost to ensure that Korean ventures and startups continue to attract funds for growth and create quality jobs.”

-Press Release: The statistics in this press release are statistics analyzed by the Ministry of SMEs and Startups to examine the 2022 employment trend of ventures and startups, not statistics nationally approved in accordance with the Statistics Act.

Continue Reading: Singapore: Supporting startups to scale up


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