Half of the small business closes within 3 years

Half of the small businesses were closed for three years after they were founded. The rate of entrepreneurship (percentage of entrepreneurs in all businesses) is also decreasing. Although Moon Jae-in is promoting business as a major axis of innovation growth, it means that reality is not growing. 

The Korea Employment Information Service said in a report that the three-year survival rate of businesses founded in the first quarter of 2011 was 53.5 percent. Gangwon Province had the lowest 3-year survival rate with 45.4%, followed by Chonnam, Jeonbuk, and Gyeongbuk. Daegu (56.3%) and Gyeonggi Province (56.3%) showed the highest survival rates. The 5-year survival rate of businesses that started in the same period dropped to an average of 38.3% nationwide. Six of the 10 startups have not been in business for more than five years. 

The rate of entrepreneurship also decreased compared to five years ago. The turnover rate last year was 18.7%, down slightly from 19.0% in 2011. Excluding Jeju (23.2%), Gangwon (20.5%) and Chungnam (20.0%), there was no place where the founding rate exceeded 20%. This means that employment creation through entrepreneurship is not actively promoted, considering the analysis that employment performance is relatively higher in an area with a high start-up rate. 

Previously, the government introduced a policy of "innovation start-up" that encouraged start-up and development of venture companies last month. The goal is to create jobs through entrepreneurship by focusing on the fact that the younger companies are more effective in creating employment. Park Jin-hee, a researcher, pointed out that "strategies needed to achieve employment performance by region are different," and pointed out that a customized support strategy based on the survival rate of the business and employment growth is necessary.