President Park Geun-hye, at the beginning of his term of office in 2013, in the technology industry to implement entrepreneurial incentives, trying to build a creative economy .

Since then, South Korea has launched a series of initiatives to promote investment in emerging startups, which have included tax incentives for angel investors and financial insurance for those starting their own businesses.

This led to a "startup boom" in South Korea, with a number of internet companies starting up in Seoul. In 2014 alone, there were about 840,000 companies in the country of 50 million people. Seventy percent of the startups were restaurant companies.

This is a very large number of companies in relation to the gross domestic product (GDP), and has led to a great deal of publicity in the South Korean media about South Korea's return to the "peak years".

Many experts and scholars have swarmed to analyze Korea's "startup boom," with some business experts pointing to the country's unique perseverance and discipline as the foundation for a thriving entrepreneurial ecosystem. In short, it's a lot of praise.

That year, the Global Entrepreneurship Index was released, and South Korea ranked first in East Asia with a 54% entrepreneurial environment. It was closely followed by Singapore and Japan at 53% and 52% respectively.

But in the past two years, things have suddenly taken a sharp turn for the worse. While South Korea is stepping up its efforts to become an innovative and entrepreneurial economy, more and more young people are giving up on entrepreneurship. 2018 saw the closure of more than 1 million self-employed businesses in South Korea!

The number of self-employed business owners who have shut down their businesses after less than three years of operation has exceeded 800,000 due to the economic downturn and other impacts.

As a result, closure consulting service companies specializing in closure for those who have ceased business have come into being in Korea. According to statistics, the total number of applications for closure of self-employed businessmen in South Korea in 2018 has exceeded 1 million, resulting in economic losses of up to 40 trillion won.

These businesses that survived didn't fare much better, sticking around for a year before running into this year's epidemic. The new Crown Pneumonia epidemic triggered stagnant economic growth, as well as the effects of the minimum wage hike and rising rents.

In July 2020, according to the Korea Statistical Office and related industry data, in the first half of this year, South Korea's self-employed business decreased by 138,000 households. The biggest drop since the 2008 global financial crisis.

Some people blame the epidemic for the cooling of Korea's "entrepreneurial tide", but if you look closely, Korea's entrepreneurial tide before the epidemic has been almost "cool".

Second, it is difficult to share the meat

Koreans do not love entrepreneurship.

The International Trade Research Institute of the Korea Trade Association has published a survey report on the post-graduation work intentions of college students in China, Japan and South Korea, and the results show that students who want to start their own business after graduation, South Korea is only 6.1%, much lower than China's 40.8%.

Very few young people in South Korea want to start a business, a result that comes as no surprise because they themselves know that the survival rate of entrepreneurship in South Korea is low. On average, only 60% of new businesses make it past the first year after startup, and less than 30% make it past the fifth year after startup.

Many self-employed entrepreneurs are concentrated in low-tech industries and face serious problems of homogenization. There are eight fried chicken restaurants every 0.62 miles in Seoul.

In more extreme cases, stores of the same franchise brand compete with each other. In some business districts, there are three cosmetic stores of the same retail brand. The biggest victim in this trend is, of course, the business owner. Adding a competitor usually costs 3 million won per month.

Ordinary people starting their own businesses are basically focusing on some of the lower-end industries, while the higher-end industries are basically dominated by plutocrats.

South Korea's economy is still dominated by big conglomerates or plutocrats. Basically, all the entrepreneurial directions that Koreans can think of have been taken over by the plutocrats.

The top five plutocrats account for 58% of Korea's GDP in sales revenue. Their businesses span cell phones, cars, hospitals, insurance, and even art museums, amusement parks, and cosmetics. Chaebol companies and their subsidiaries are like octopuses, reaching into every aspect of the Korean economy.

This situation means that if young Koreans want to start a business, they can do so only to serve the conglomerates, for example, by producing what the conglomerates want when they order it. Small start-ups may even lose their bargaining power, leaving them at the mercy of the big boys.

Faced with the reality that the chaebols control the economy, many analysts have pointed to the growing gap between the large family-owned companies that dominate the South Korean economy, such as Samsung and LG, and the rest of the business. The latest data provided by the South Korean government shows that in 2017, large corporations, including the zaibatsu, accounted for about half of South Korea's total revenue, but provided only 20 percent of the country's jobs.

For many young South Koreans, it's a dream, a job for life in a big conglomerate. With the economy slowing down, there are not enough jobs for Korean college graduates.

Third, it's hard to find a way out

Unemployment in South Korea has soared this year under the epidemic.

According to data released by Statistics Korea on Friday (16th), the new Crown Pneumonia epidemic continues to impact the South Korean job market, with the unemployment rate rising to 3.6% in September, the largest increase since the financial crisis. Affected by the epidemic in mid-August appeared to rebound, the number of employed people in September decreased by 392,000 year-on-year to 27.012 million.

Under the epidemic, many unemployed young people and bankrupt self-employed people chose to take the civil service exam.

In South Korea, Asia's fourth-largest economy, the most sought-after occupation for teenagers and young adults is public service. The Los Angeles Times reports that young South Koreans, who make up about one-fifth of the population, flock to apply for government jobs every year.

In 2019, competition for 1.07 million government jobs in South Korea was fierce, with an acceptance rate of 2.4 percent. By comparison, Harvard's 2018 acceptance rate was 4.59%.

Many young people are choosing not to work but to study at home full-time in order to enter the public service, and the Hyundai Research Institute has estimated that the economic cost of lost job potential is more than $15 billion for so many young people who have spent years studying to get a government job rather than joining the private workforce.

But government jobs are limited, and the chaebol can't provide many, and encouraging entrepreneurship is still seen in South Korea as an important way to address both the employment problem and the country's innovation problem.

The Korean government has focused on estimating startups. South Korea has introduced a program called "Specialized Stock Market for Small and Medium-sized Enterprises" to lower the threshold of financing for small and medium-sized enterprises while ensuring the security of transactions.

But what's missing from the Korean startup scene is not just money and policy, it's the entrepreneurial spirit. The South Korean economy relies heavily on demand-driven entrepreneurship, with more than 80% of SME owners in South Korea saying they started their businesses to get a job or to support themselves.

As mentioned above, most new businesses are not innovative startups, and many are concentrated in low-productivity sectors such as retail and food and beverage. The number of restaurants, bars, and other beverage outlets increased by 12% during the startup boom years, and 31.3% of Koreans say they would choose the food and beverage industry if they started their own business because of the tough job situation.

The weight of innovation-driven entrepreneurship in Korea is still lower than in other OECD countries.

The challenge for Korea is to create an environment where people do not have to become "entrepreneurs" to get a job. Fostering a wave of entrepreneurship, rather than a wave of forced entrepreneurship, requires encouraging a strong ecosystem of tech startups, which is one of the most important ways for Korea to move to the next level of economic development.

Last year, when Moon Jae-in had lunch with Lee Jung-dong***, Special Assistant for Economic Sciences, he openly encouraged Korea's hi-tech talent to go beyond writing papers at universities and start their own businesses in the marketplace.

But by the time the epidemic hit this year, the South Korean government's concern for startups also seemed overwhelming.

Earlier this year, Lotte Group founder Singh Ho died, and Korean media commented: South Korea's "first generation of entrepreneurs" era officially came to an end

But the new entrepreneurial generation, it seems, has not been able to form a "prairie fire" like their predecessors. "prairie fire momentum".