Domestic Demand, Tech Competitiveness Drive Venture Rebound in 4 Quarters

The perceived business sentiment among domestic venture companies has shown a clear rebound after four consecutive quarters of decline, reaching a positive turning point. According to the 'Q2 2025 Venture Business Survey Index (BSI)' released by the Korea Venture Business Association, the overall business performance index recorded 89.8, a sharp increase of 11.2 points compared to the previous quarter (78.6). The upcoming Q3 outlook index also increased expectations, reaching 99.2, very close to the benchmark of 100. This recovery is primarily attributed to 'improved domestic sales' (79.7%) and 'strengthened technological competitiveness' (24.2%). Particularly, the acceleration of digital transformation and the increasing demand for new technologies like Artificial Intelligence (AI) were reflected, leading to a notable strength in technology-intensive sectors, such as the information and communication/broadcasting services sector which surged by 16.4 points. By sector, both manufacturing (88.9) and services (89.6) showed consistent improvement. Among venture certification types, the 'Innovation Growth Type' (91.8) recorded the largest increase, demonstrating quick adaptability to market changes. Regionally, a nationwide recovery was observed, with the Gangwon and Jeju regions (83.8) showing notable progress. However, factors of instability surrounding venture companies still persist. While 'sluggish domestic sales' (83.0%) continues to be cited as a primary cause of business deterioration, 'difficulties in funding' (40.7%) and 'rising raw material prices' (15.8%) remain chronic issues. In particular, the situations for 'investment attraction' (-0.7p) and 'loans' (-8.3p) have worsened or stagnated, indicating that the funding environment for venture companies is not easy. By detailed item, improvements in domestic sales (92.5, +19.3p) and productivity (97.1, +11.6p) drove the overall improvement in business performance (92.6, +11.2p). For the Q3 outlook, the service sector (102.0) exceeded the benchmark, painting a brighter picture than manufacturing (96.4), but the outlook for improvement in structural difficulties such as funding conditions, expenditure, and human resources remained insufficient. Experts emphasized that sustained policy support, particularly the revitalization of the venture investment market and improved financial accessibility, is urgently needed for this recovery to continue. Despite short-term performance improvements, efforts to establish a solid foundation for growth are critically needed at this juncture.