The Effect of Economic Crisis on Entrepreneurial Performance in South Korea

An abundance of research has empirically demonstrated that macroeconomic conditions at the time of launch affect the decision to start a business and its performance. Considering that the COVID-19 pandemic is different from previous crises and the extent and scope of the coronavirus are unlike those seen during previous outbreaks of infectious diseases, this crisis deserves a separate discussion. The crucial characteristic differentiating the COVID-19 economic crisis is that, due to the nature of a pandemic, industrial impacts have been heterogeneous. The number of startups in service industries requiring in-person customer interactions (such as the hospitality industry) has declined, while the number of startups in science and technology services that support businesses going digital or non-face-to-face has increased. And as the coronavirus has had a far-reaching impact over an extended period compared to previous pandemics, the domestic ecosystem for entrepreneurship has likely undergone long-term structural changes. Accordingly, entrepreneurship policy should be designed to support the transition to non-face-to-face operation and digital transformation considering sectoral differences.