Korea’s small business sector continued to expand in 2024, with more establishments in operation and greater adoption of digital tools, according to the latest nationwide survey conducted by the Ministry of SMEs and Startups (MSS) and the Small Enterprise and Market Service (SEMAS).
The 2024 Small Business Survey provides one of the most comprehensive statistical snapshots of small merchants and self-employed entrepreneurs across the country. Conducted annually, the survey serves as a key reference for shaping policies designed to support small enterprises and local businesses.
The latest findings show that 6.134 million small business establishments were operating across 11 major industries in 2024, up from 5.961 million in 2023. Employment within the sector also edged upward to 9.61 million workers, compared with 9.551 million a year earlier.
While both the number of businesses and employees increased, the average number of workers per establishment declined slightly to 1.57, down from 1.60 in 2023, reflecting the continued dominance of micro-scale businesses within the sector.
Retail and services remain central to the sector
Among the industries surveyed, wholesale and retail trade accounted for the largest share, with 2.1 million businesses (34.2%). The sector was followed by real estate (862,000 businesses, 14.0%) and accommodation and food services (796,000 businesses, 13.0%). Construction and manufacturing also maintained substantial representation, with 568,000 and 537 businesses, respectively.
Employment patterns closely mirrored the distribution of businesses. Wholesale and retail businesses employed 3.039 million people (31.6%), followed by accommodation and food services (1.423 million, 14.8%), manufacturing (1.263 million, 13.1%), construction (1.077 million, 11.2%), and real estate (1.047 million, 10.9%).
Digital tools increasingly integrated into business operations
The survey also highlighted a noticeable acceleration in the use of digital and smart technologies among small businesses. 27.2% of businesses reported utilizing digital tools, representing a 9.2 percentage-point increase compared with the previous year.
Among those adopting digital technologies, the most commonly used tools included:
- Online sales channels (49.0%)
- Store management systems (34.4%)
- Business management software (19.6%)
- Smart ordering and payment systems (15.25)
The trend indicates that digital transformation is steadily becoming part of everyday operations for small businesses, particularly in sales management and customer transactions.
Startup costs fall while entrepreneurial motivation remains strong
The average startup cost in 2024 was KRW 83 million, including KRW 95 million financed by founders themselves. This represents a decrease from KRW 89 million (KRW 64 million self-funded) recorded in 2023.
Entrepreneurial motivation remained largely aspiration-driven. The majority of respondents – 65.7% – said they started their business because they wanted to run a business of their own. Other motivations included expectations of higher income (18.1%) and difficulty finding wage employment (15.8%).
Competition and operating costs cited as major concerns
When asked about management challenges, small business owners most frequently pointed to intensifying competition (61.0%), followed by rising raw material costs (49.6%), declining commercial districts (33.5%), deposit and rent burdens (28.6%) and minimum wage pressures (17.5%).
These responses highlight the complex operating environment facing small businesses, particularly in service industries and local commercial areas.
Moving toward more data-driven policy
Beginning with this year’s survey, financial items that can be objectively verified – such as sales and operating costs – have been excluded from the questionnaire. Instead, the government plans to utilize administrative data from the National Tax Service and financial institutions to enhance the accuracy and reliability of financial statistics.
The change follows recent legislative developments aimed at strengthening the statistical foundation for small business policy.
Lee Byung-Kwon, Second Vice Minister of SMEs and Startups, noted that using tax data will enable more precise financial analysis of the sector. He added that the ministry also plans to collaborate with private data firms to analyze policy impacts in real time in local commercial districts and traditional markets.
He further emphasized that the government will continue strengthening data-based administration and statistical governance, including deeper analysis of small business data and the provision of more targeted policy information through the national small business database.
Survey overview
The 2024 Small Business Survey is conducted under the Framework Act on Micro Enterprises and the Statistics Act, and is officially approved national statistics. The survey covered approximately 40,000 businesses across 11 industries with a high concentration of small enterprises, including manufacturing, construction, wholesale and retail, accommodation and food services, information and communications, real estate, professional and technical services, business support services, education services, arts and leisure, and repair and personal services.
Data collection combined in-person field surveys and online responses, covering 36 indicators related to general business characteristics, startup conditions, and management status.