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Number of Manufacturing Startups Dropping in South Korea
Korea's Economic Fundamentals Weakening
Number of Manufacturing Startups Dropping in South Korea
  • By Jung Min-hee
  • October 29, 2019, 09:10
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The number of manufacturing startups is dropping in South Korea.

The number of startups is dropping in the manufacturing sector of South Korea. This can be attributed to the negative outlooks of its semiconductor and display industries and uncertainties represented by the ongoing trade disputes between South Korea and Japan.

The Ministry of SMEs and Startups announced on Oct. 28 that a total of 97,427 companies were founded in South Korea in August this year, down 7.7 percent from a year ago, and the number fell 3.5 percent to 17,236 in the case of new tech startups. For reference, the number was 15,421 in August 2016, 16,398 in August 2017, and 17,854 in August 2018.

The number of new tech startups in the manufacturing sector, in particular, increased from 4,800 to 5,507 from August 2016 to August 2017 but dropped to 4,724 in August 2018 and 4,015 in August 2019.

For the first eight months of last year, the number of new tech startups in the manufacturing sector totaled 40,042. However, the number stood at 36,855 in the same period of this year, when the overall number of new companies decreased by only 6 percent.

In the information and communications industry, in the meantime, the number of new companies continued to increase from 1,866 to 2,077, 2,363 and 2,592 from 2016 to this year. Likewise, that in the professional science and technology sector continued to increase from 2,975 to 3,012, 3,292 and 3,702. In short, starting a business in the manufacturing sector is being particularly shunned.

This has to do with the semiconductor and display sectors as well as the trade disputes as evidenced by the fact that the number of new companies dropped by no less than 22.4 percent year on year in the electrical, electronics and precision equipment sector.

On the other hand, wholesalers and retailers accounted for 26.9 percent of the companies founded in August this year, followed by real estate businesses (20.1 percent) and accommodations and restaurants (14.6 percent).