According to data released Tuesday by Statistics Korea and credit rating service NICE, a substantial proportion of startups and self-employed businesses collapsed in less than five years, with many suffering from fears of financial insolvency as a result of mounting debt, among other things. It was discovered that their unsteady state began years before COVID-19 struck the United States of America.

According to Statistics Korea, the average individual startup only lasted 2.6 years in operation. In the period between 2010 and 2018, the journal in which it was published did a study on the operations of startups.

This number represents the startup whose overall rating in terms of market length placed it in the middle of all other individual startups in the market.

Approximately 78 percent of them continued operations for one year, while 45 percent continued operations for three years. However, only 31% were discovered to have lived for a period of five years.

This suggests that almost seven out of ten individual startups were forced to close their doors within five years of beginning.

Owners under the age of 35 had the shortest median startup period, with a median duration of 2.3 years, according to age. Approximately half of the companies in this age range did not survive for more than 2.3 years.

A similar period among individuals between the ages of 35 and 49 and those aged 65 and up was found to be 2.9 years. Those between the ages of 50 and 64 had the longest life expectancy, at 3.1 years.

According to the thesis, "it is required (for the government) to reform policies, given that the efficacy of support measures for startups among the young generation has been found to be inadequate."

With a median starting term of 1.9 years in retail and finance and insurance services, respectively, the median startup period was the shortest across all industries, with the longest being 2 years in the foodservice industry. According to gender, the average lifespan of male-owned companies was 2.8 years, compared to 2.3 years for female-owned businesses.

Among companies with business partners who pool funds, technologies, and managerial skills, the median period of survival was 5.8 years, according to the most recent statistics. The figure for those who did not have the type of partners, on the other hand, was only 2.5 percent.

In the United States, the vast majority of startups are classified as self-employed. To make matters worse, as a result of the pandemic, an increasing number of self-employed persons have found themselves in deeper debt.

Following the release of a report by local credit rating agency NICE, which was turned over to opposition member Yoon Chang-Hyun, it was revealed that as of November 2021, there were 632 trillion won ($531 billion) in outstanding debts from financial services organizations to the self-employed.

This represented a 31.2 percent increase from 482 trillion won at the end of 2019, a month before COVID-19 made its maiden appearance in the country.

In addition, the number of self-employed people who took out loans from three or more financial institutions climbed significantly over the same period as well.

"Multiple debtors" accounted for 9.8 percent, or 272,000, of the total 2.76 million self-employed in November 2021, representing a total of 2.76 million people. From 128,000 at the end of last year, the total has increased by more than 100 percent.

It is estimated that the outstanding borrowings of numerous borrowers totaled 157 trillion won, accounting for 24 percent of the entire debt held by the self-employed, which stood at 632 trillion won. The total amount of per capita borrowings from the many borrowers was 576 million won.

Self-employed people in their 40s topped the list with 90,800 jobs, followed by those in their 50s with 87,600 jobs, those in their 30s with 44,900 jobs, and those in their 60s with 42,500 jobs, according to the report.

A growing number of people are concerned about the possibility of en masse insolvency among the self-employed as a result of upcoming increases in the benchmark interest rate.