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Job creation achievement made by startup companies and the corresponding policy tasks

Author Cho Deokhui Date 2014.12.29 Page 159
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The purpose of this study is to determine whether the active creation of start-ups contributes greatly to job creation in the national economy and analysis many arguable issues regarding this economic argument. This study also strives to find desirable startup policies that can improve job creation performance.

The analysis results of this study indicated most of the net job creation in Korea is accounted for by startups, just as in the United States, and confirmed that net job loss occurred in the existing enterprise sector. In addition, old firms, rather than young, contributed more to job creation, with the exception of startups that were established in the corresponding year, which can be attributed to the fact that the death rate of old firms is lower than that of young firms. of startups rapidly decreases following their entry but also because the effects of startup creation and exit offset each other since their intial 1 or 2 years.
Next, this study examined how the job creation performance made by startups has changed over the last several years, and investigated the current status of individual determinants behind such changes. Based on this, policy implications to create desirable startup policies for the improvement of job creation are suggested. According to the results, the status of startups in Korea is represented well by a high startup rate, high exit rate, low survival rate of startups and their sluggish growth rate. Under such circumstances, a high startup rate leads to a high exit rate, which is highly likely to result
According to the estimation results of the dynamic model based on the outcomes of job creation made by startups, the employment spillover effect, which persisted for about 10 years since the creation of startups, was shown to exhibit a drastically diminishing structure instead of a well-shaped S curve, a very idealistic form according to arguments in existing studies. This is not just because the survival rate in a low survival rate and sluggish growth of startups. Therefore, it is difficult to say that the high startup rate guarantees excellent job creation performance.
To implement startup policies for the improvement of job creation performance, it is necessary to enhance the goals and support system from the following three perspectives : ① establish policy goals emphasizing reasonable harmonization between the startup rate, survival rate and growth potential ; ② prepare a startup support system that can select and control the “unprepared startups”; ③ simplify the current complex startup support system.