New Startups in Domestic-Facing Sectors Decline, Reaching 9-Year Low

The number of new startups dropped for the fifth consecutive year last year, while high-growth businesses experiencing rapid increases in sales and employment shrank by 16% over the course of a year.

Both the startup rate and the closure rate, which represent the proportions of newly created and terminated businesses among all active enterprises, hit record lows.

According to the preliminary results of the 2025 Corporate Vitality Statistics released by the National Data Agency today (22nd), the number of "new startups" last year stood at 908,000, a decrease of 14,000 (1.5%) from the previous year.

Following a figure of 1,068,917 in 2020, the number has been on a downward trend for five straight years.

Last year's number of new startups was the lowest in nine years since 2016 (884,344).

New startups refer to businesses that had no economic activity in the previous year but generated sales or regular workers in the reference year.

Active enterprises with sales or regular workers last year totaled 7.748 million, an increase of 106,000 (1.4%).

The startup rate, which is the proportion of new startups among active enterprises, fell 0.3 percentage points to 11.7%.

This marks the lowest level since the statistics began in 2011, continuing a five-year decline following 15.6% in 2020.

By industry, new startups in the accommodation and food services sector fell by 16,000 (-11.0%), and those in real estate dropped by 15,000 (-8.6%).

The accommodation and food services sector has seen declines for two consecutive years, while real estate has fallen for five straight years.

New startups decreased in sectors closely tied to domestic consumption.

However, new startups in the wholesale and retail sector increased by 14,000 (6.2%).

As of 2024, "terminated businesses" (active enterprises that lost their sales and regular workers) totaled 769,000, down 21,000 (2.7%).

The closure rate fell 0.4 percentage points to 10.1%, marking the lowest level since the compilation of statistics began, mirroring the startup rate.

After reaching a record high in 2023 (791,000) due to the fallout from high interest rates, terminated businesses turned downward in 2024.

An official from the National Data Agency interpreted the decline in closed businesses by noting, "Rather than businesses shutting down less due to an economic revival, it could be seen as a form of holding out where closures are delayed due to the burden of shutdown costs." They added a caveat, saying, "However, as this cannot be clearly analyzed, we need to observe the trend further."

The one-year survival rate of startups formed in 2023 that survived through 2024 stood at 63.9%, a decrease of 0.5 percentage points.

Falling for two consecutive years, it reached its lowest point in six years since 2018 (63.6%).

Conversely, the five-year survival rate for startups rose 0.1 percentage points to 36.5%, recording an all-time high.

This marks an upward trend for eight consecutive years since 2016.

By size of workforce, active businesses with a single worker increased by 114,000 (1.9%) to 6.217 million, whereas businesses with two or more workers decreased by 7,000 (0.5%) to 1.531 million.

Single-person enterprises accounted for 80.2% of all active businesses.

As of 2024, terminated businesses with two or more workers increased by 6,000 (12.3%) to 58,000, contrasting with a 3,000 decrease (-3.7%) to 27,000 for single-person terminated businesses.

By the age of the representative, active businesses run by people in their 70s or older increased by 91,000 (12.7%) to 810,000, and those in their 60s grew by 61,000 (3.4%) to 1.877 million.

This is attributed to the impact of an aging population.

In contrast, businesses led by those in their 40s decreased by 26,000 (1.6%), and those under 30 fell by 15,000 (6.7%).

Among enterprises with 10 or more regular workers, "high-growth businesses"—defined as those whose sales and regular workers grew by an annual average of 20% or more over the past three years—decreased by 855 (15.9%) to 4,534 last year.

After maintaining the 5,000 level from 2021 to 2024, the number dropped to the 4,000 range.

Among high-growth companies, "gazelle businesses," which are enterprises that have been registered for four to five years, also declined by 208 (15.4%) to 1,146.
※ Please note: This article was translated by AI and may contain errors.