SEOUL, January 25 (AJP) - The number of self-employed businesses stood at 5.62 million last year, down 38,000 from a year earlier, the National Data Agency said on Sunday.
The figure fell for a second straight year and was also the largest decline since 2020 when the coronavirus pandemic hit the country.
Mom-and-pop businesses declined by 75,000 in 2020 and 18,000 in 2021, then saw a gradual post-pandemic recovery of 119,000 in 2022 and 57,000 in 2023, only to fall again by 32,000 in 2024 and 38,000 last year.
The agency attributed the decline to consistently high interest rates, rising labor costs, and weak domestic demand, pushing more small businesses to close.
In particular, business owners in their 20s and 30s were hit hardest as those in their 20s stood at 154,000 last year, down 33,000 from a year earlier, and those in their 30s fell by 36,000 to stand at 636,000 during the same period.
The agency explained that they were mostly engaged in eateries, lodging, and delivery services, which struggled to attract customers, making it difficult for them to survive. Despite the government's efforts last year to support them with cash vouchers to boost private consumption, these measures apparently failed to reverse the prolonged slowdown.
Reflecting this trend, the number of young entrepreneurs and startup founders also declined from 350,000 in 2021 to 296,000 in 2024.
Most young entrepreneurs these days tend to turn to online and high-tech services, which are characterized by rapidly changing trends and intense competition. However, limited resources and inexperience often make it difficult for them to respond to unpredictable economic shifts or market trends, increasing the likelihood of business closures, according to the agency.
The figure fell for a second straight year and was also the largest decline since 2020 when the coronavirus pandemic hit the country.
Mom-and-pop businesses declined by 75,000 in 2020 and 18,000 in 2021, then saw a gradual post-pandemic recovery of 119,000 in 2022 and 57,000 in 2023, only to fall again by 32,000 in 2024 and 38,000 last year.
The agency attributed the decline to consistently high interest rates, rising labor costs, and weak domestic demand, pushing more small businesses to close.
In particular, business owners in their 20s and 30s were hit hardest as those in their 20s stood at 154,000 last year, down 33,000 from a year earlier, and those in their 30s fell by 36,000 to stand at 636,000 during the same period.
The agency explained that they were mostly engaged in eateries, lodging, and delivery services, which struggled to attract customers, making it difficult for them to survive. Despite the government's efforts last year to support them with cash vouchers to boost private consumption, these measures apparently failed to reverse the prolonged slowdown.
Reflecting this trend, the number of young entrepreneurs and startup founders also declined from 350,000 in 2021 to 296,000 in 2024.
Most young entrepreneurs these days tend to turn to online and high-tech services, which are characterized by rapidly changing trends and intense competition. However, limited resources and inexperience often make it difficult for them to respond to unpredictable economic shifts or market trends, increasing the likelihood of business closures, according to the agency.
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