University-led business startups dwindle nationwide in South Korea, yet elite institutions witness a significant increase.
In South Korea, the landscape of student entrepreneurship has undergone a significant shift in recent years. While the overall number of student-led startups has decreased, some of the country's top universities are experiencing a surge in entrepreneurial activity.
According to recent data, the "Pre-Startup Package" and the "Early Startup Package," primary funding sources for student entrepreneurs, saw a decline in 2023. The Pre-Startup Package, which funded 1,530 companies in 2021, only supported 930 in 2023, a decrease of 39.2%. The Early Startup Package, which funded 900 companies in 2021, saw a decrease to 590 in 2023, a decrease of 34.4%.
This decline in funding is thought to impact student entrepreneurs who lack access to private venture capital. The slowdown in student entrepreneurship began in 2024, following restrictions due to the COVID-19 pandemic in 2021. Nationwide, the number of student entrepreneurs decreased by 7% in 2024 compared to the previous year, marking the first nationwide decline since 2021.
However, at universities like Seoul National University, Korea University, Yonsei University, and KAIST, the story is different. These institutions have stronger labs, better access to funding, and a long history of research in advanced fields like AI, semiconductors, and robotics. As a result, they provide a conducive environment for student entrepreneurs.
The number of student entrepreneurs at these universities collectively increased by 31.4% in 2024 compared to 2023. Seoul National University saw a 44.1% increase, Korea University a 50% increase, Yonsei University an 11.3% increase, and KAIST a staggering 53.8% jump.
This rise in student entrepreneurship at these universities occurs despite the nationwide decline. The increase is thought to be due to their focus on advanced fields that are becoming trends. The universities' focus on these areas, combined with their strong entrepreneurial ecosystems, which include access to funding, mentorship, incubation programs, and industry connections, sustain or even boost startup activity despite wider challenges.
The divergence between the nationwide decline and the continued growth at these universities can be attributed to national policy and market uncertainties dampening broad startup growth. Policies like the controversial "Yellow Envelope Bill"—which expands the definition of "employer" and could complicate subcontracting and labor relations—create uncertainty and caution among businesses and startups nationwide. This regulatory environment likely contributes to a general slowdown in startup momentum beyond elite institutions.
In contrast, these leading universities are better equipped to navigate these challenges due to their concentrated resources and support. They tend to concentrate talent and resources that enable robust entrepreneurship despite external headwinds.
Therefore, the momentum of student-led startups is decreasing across South Korea largely due to broader market and regulatory concerns, while a few top universities experience increased entrepreneurship because of their focused support frameworks. This analysis aligns with the known impact of regulatory and economic factors influencing entrepreneurship patterns in South Korea.
In South Korea's evolving landscape of student entrepreneurship, universities like Seoul National University, Korea University, Yonsei University, and KAIST, with their strong focus on advanced technology fields such as AI, semiconductors, and robotics, are bucking the national trend of diminishing student startup activity. Despite the decrease in funding sources like the Pre-Startup Package and Early Startup Package, these institutions provide conducive environments for student entrepreneurs through their access to technology-focused resources, funding, mentorship, and industry connections.
On the other hand, the decline in funding and the country's regulatory environment, as exemplified by the "Yellow Envelope Bill," have resulted in a nationwide decrease in student entrepreneurship, particularly in accessing private venture capital. This analysis suggests that South Korea's student-led startups are increasingly dependent on advanced education-and-self-development opportunities at select universities, rather than relying on national funding and policy frameworks.
