No. of young entrepreneurs diminishes at steepest pace in 8 years

Clothes for younger consumers are on display outside a store in Seoul's Seodaemun District, Monday. Yonhap

Kim Youn-mi, 29, is now helping her parent as a cashier at a small, family-run cafe in Seoul after closing her own, which she opened after the end of the COVID-19 pandemic but shut down about a year later.

Kim, a four-year college graduate, says she had opened her own business because she was not interested in a low-paying job at a small or medium-sized enterprise (SME) but was not experienced enough to get a high-paying job at a large conglomerate.

“At that time, I thought being self-employed would be far better off than being a SME employee in terms of earnings,” she said. “It did not take long for me to realize that there is a slim chance to create revenue and survive while managing a business from A to Z.”

Kim represents many Koreans in their 20s who opened their own business, as many of their peers fail to get suitable salaried jobs.

Many of these young entrepreneurs, however, shut their businesses down as they struggle to make money.

A closure sign is posted at a store that once sold clothes for younger consumers in Seoul's Seodaemun District, Monday. Yonhap

According to the National Tax Service’s (NTS) statistics website, the number of business owners who were aged below 30 averaged 354,672 per month in the first quarter of 2025.

The figure marked a 26,247 drop from a year earlier, which marked the largest year-on-year decrease since relevant data began being compiled in September 2017.

“Such a decrease indicates the serious nature of young entrepreneurship,” said Shin Se-don, professor emeritus of economics at Sookmyung Women’s University.

While a protracted economic downturn has affected young business owners, the professor said it does “not fully explain the reasons behind their business closures.”

He noted that the number of these young entrepreneurs increased steadily in 2023 when the country’s gross domestic product grew 1.4 percent, slower than the 2.6 percent in 2022.

For instance, the number increased by 2,211 year-on-year in the third quarter of 2023, and again by 6,779 year-on-year in the fourth quarter of 2023.

The number then decreased by 19,400 year-on-year in the third quarter of 2024, marking the first decrease ever, and again by 21,527 year-on-year in the four quarter of the same year.

Woo Suk-jin, an economics professor at Myongji University, said that more young entrepreneurs are closing stores as “they compete in sectors that are mostly saturated or don’t have high consumer demand."

He added, “These sectors include retailers, cafes and restaurants, which are easy to jump into because they do not require prior expertise or skills compared to other areas, such as finance and IT.”

In the retail sector, the number of business owners younger than 30 amounted to 127,089 in the first quarter of 2025, down 16,185 from a year earlier. The volume of decrease nearly doubled from the third quarter of 2024 when it dropped 8,806 from a year earlier, marking the first fall in the industry.

Across the food sector, the number of business owners in their 20s dropped by 5,507 to 46,269 in the first quarter of 2025 from a year before.

Kim Kwang-seok, head of economic research at the Korea Economic Industry Research Institute, said the decrease coincides with slumping employment among younger generations, and that “the issues must be addressed for the sake of the country.”

The employment rate for young people aged 15 to 29 has been falling for 13 consecutive months since May 2024. In June, the rate was 47 percent. In contrast, their unemployment rate has been on the rise since the beginning of this year, hovering around 7 percent.

“The tougher job environment is pushing more young people to inevitably start a business as an alternative to employment,” Kim said. “The government should help them to make money one way or another.”