The latest Global Entrepreneurship Monitor (GEM) report shows that countries have experenced variable impacts from the pandemic – out of 38 economies that took part, 16 saw their total early-stage Entrepreneurial Activity dramatically fall.
The GEM report is based on interviews with over 175,000 individuals and experts from 51 economies, and tracks the percentage of adults who are starting or running a new business (referred to as Total early-stage Entrepreneurial Activity or TEA). Among the 38 economies that participated in GEM research both in 2019 (prior to the pandemic) and 2022, there were 12 that had a substantially higher level of TEA in 2022 compared to pre-pandemic, and 16 in which TEA dramatically levels fell. Meanwhile, in 10 of those economies, there was minimal change. All regions and income levels are represented in each group.
The pandemic’s impact on entrepreneurial perceptions has also been highly varied. Of the 38 economies participating in the GEM’s Adult Population Survey (APS) in both 2019 and in 2022, there were 12 economies in which the percentage of adults seeing good local opportunities to start a business fell by five points or more. There were another nine economies in which that percentage increased by more than five points. One explanation for these differences may be the level of support that governments were willing (and able) to offer to businesses and households during the pandemic.
Professor José Ernesto Amorós, GEM–GERA Board Chair and a member of the GEM Mexico Team, said “Our aspiration at GEM is clear: to provide transparency to policymakers so that they can make better decisions to truly promote entrepreneurship, understanding the specific national conditions, and also observe and act on the impact of their decision-making over time.”
Sreevas Sahasranamam, Associate Professor at the Strathclyde Business School and one of the co-authors of the Global report said, “We observe that fear of failure is a serious constraint on business start-ups in many economies from all income groups. In a number of economies, high proportions of adults agree that starting a business is relatively easy, and see good opportunities to start a business locally, while also considering themselves to have the skills and experience to create a start-up. However, around half of those seeing such opportunities are nevertheless deterred from taking action by fear of failure.”
For the second consecutive year, the United Arab Emirates is number one in the GEM National Entrepreneurship Context Index (NECI). GEM defines the entrepreneurial context of a particular economy in terms of 13 different characteristics, labelled the Entrepreneurship Framework Conditions (EFCs).
The NECI results are based on the scores of the Framework Conditions for each of the 51 economies participating in GEM. At least 36 experts, often more, are selected for their expertise by the GEM National Team and approved by GEM to assess statements that make up the scores. As the same questions are asked in all economies, scores can be compared across countries. In 2022, the UAE ranked first for seven of the 13 Framework Conditions and number one overall.
The report also showed that in 2022, men were more likely than women to start a new business. Of the 49 economies participating in the APS, there were just four in which the level of female new entrepreneurial activity exceeded that of men: Togo, Indonesia, Qatar and Poland.
Younger people are still more likely than older adults to be starting new businesses. The TEA rate of the 18–34 age group exceeded that of the 35–64 age group in 37 of the 49 economies in the GEM APS.
The aforementioned gaps highlight areas for improvement and should be a focus for policymakers seeking to support the success of future entrepreneurs.
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