New startups, particularly those in real estate, surged in the first half of this year despite the impact of the pandemic, data showed Thursday.
According to the data released by the Ministry of SMEs and Startups, the number of new startups in the January-June period was 809,599, up 26 percent from the same period last year.
The surge was attributed to new real estate businesses, which stood at 292,810 during the period, up 131.6 percent year-on-year. The real estate sector accounted for 36.2 percent of the total of new startups.
The increase in startups in the real estate industry is due to the government’s taxation policy.
The ministry said the new firms “seem to have surged as business registration became mandatory for taxation of housing rental income of less than 20 million won ($16,873) per year.”
Registration was already mandatory for higher levels of rental income.
The new startups in real estate stood out among those in their 50s and over 60s. Compared to the first half of last year, the founders in their 50s increased by 131 percent and 227.3 percent for those aged 60 or older.
Excluding the real estate business, the number of startups in the first half was up 0.1 percent from last year. “It was relatively good given the pandemic situation,” the ministry said.
New firms in the wholesale, retail and technology sectors also rose compared to last year.
The number of new wholesale and retail firms stood at 186,748, up 10.2 percent on-year while new technology companies increased 2.5 percent on-year to 116,280.
The wholesale and retail sectors rose due to the growth of online shopping while the increasing adoption of digitalization in various sectors led to demand for technology companies.
However, the number of new startups in lodging and restaurants decreased by 11.9 percent on-year due to the influence of social distancing and refraining from going out amid the pandemic.
The new firms in the manufacturing sector also fell 8.8 percent due to sluggish business conditions that continued since last year and concerns over an economic downturn caused by the spread of coronavirus.
The face-to-face education service sector and the creative, artistic and leisure service sector also fell 6.4 percent and 11.0 percent, respectively.
By gender, the number of new startups led by women rose 28 percent to 378,847 while the number of new startups led by men rose 24.4 percent to 435,501.
By region, Sejong saw the largest increase of 47 percent, followed by Incheon with 40.2 percent, Daejeon with 36.9 percent and Seoul with 32.4 percent.
By Shin Ji-hye (email@example.com)