April 20, 2024

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[THE INVESTOR] South Korean youths in their 20s and early 30s are less inclined to start their own businesses and become entrepreneurs compared to their counterparts elsewhere, a recent global report by Amway said Sunday.

According to the 2016 Amway Global Entrepreneurship Report covering 45 countries and more than 50,000 men and women, Korean youths, aged 35 and below, scored 49 points in terms of “entrepreneurial spirit.”

Amway’s entrepreneurial spirit index measures a person’s intention to start a business according to desirability, feasibility and stability against pressure.

At 49 points, Korean youths scored below the Asian average of 64 points and the global average of 55 points in the same age group, the report found.

While Korean youths strongly intended to start a business in comparison to their Asian and global counterparts, a majority of them did not believe they held the right abilities or willpower to do so.

Around 69 percent of Korean youths responded positively to the question “I would like to start a business,” which is higher than the global average of 66 percent and the Asian average of 79 percent.

Yet, only 32 percent of Korean youths positively responded that “I have the ability to start a business,” compared to the global average of 46 percent and the Asian average of 54 percent.

Suggesting a low level of willpower, 47 percent of Korean youths also said “I won’t let go of my dream to start a business even if people around me dissuade me,” compared to the global average of 54 percent and the Asian average of 58 percent.

Moreover, 62 percent of Korean youths said they felt uncomfortable about finding their own clients, confronting them and securing business partnerships with them.

The figure stood far above the global average of 31 percent and the Asian average of 32 percent, suggesting young Koreans are less enthusiastic about engaging in entrepreneurial activities.

Such results align with the current reality that most Korean youths prefer to join established companies rather than start their own businesses. Just 10 percent of the CEOs of Korean startups are in their 20s and 30s, according to a 2015 report by the Korea Venture Business Association.

Among the contributors to a weak entrepreneurial spirit among Korean youths is a hierarchical society with little social mobility and an insufficient social safety nets for young entrepreneurs whose business may fail, Amway Korea suggested.

“Much of Korea’s social structures and educational system need to change in order to revive an entrepreneurial spirit among Korean youths,” Amway Korea said in a statement.

Like other developed countries with a strong start-up community, Korea must devise strong social safety nets for aspiring entrepreneurs to protect them even in case of failure and also devise an effective educational system which encourages entrepreneurship, it said.

“Korea needs to devise more effective educational programs to help locals build up more practical business skills (needed for starting new businesses),” Lee Joo-hun, a professor of business administration at Yonsei University, said.

By Sohn Ji-young/The Korea Herald (jys@heraldcorp.com)