May 18, 2024

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Entrepreneurship Surges as New Business Owners Embrace the Future

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Entrepreneurship Surges as New Business Owners Embrace the FutureEntrepreneurship Surges as New Business Owners Embrace the Future

The Global Entrepreneurship Monitor (GEM) recently released its Global Entrepreneurship 2023/24 Global Report: 25 Years and Growing, which reveals the findings of its annual survey of entrepreneurs worldwide. GEM’s nearly 25 years of research represents the longest-running global study on entrepreneurial activity.

Around 4 million respondents across 120 countries and approximately 50,000 national experts have contributed to GEM’s comprehensive research. This year’s survey of over 136,000 participants was conducted in 46 economies, which account for 70% of global GDP.

Entrepreneurship Surges as New Business Owners Embrace the FutureEntrepreneurship Surges as New Business Owners Embrace the Future
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Entrepreneurial Activity Across Regions

GEM’s findings show that the Latin America & Caribbean region leads all others in entrepreneurial activity, with the highest levels of adults starting and running new businesses. However, levels of new entrepreneurial activity vary greatly, exhibiting a trend that continues in all surveyed regions and income groups. For example, the survey found entrepreneurial activity ranged from 6% in Morocco to 17% in Mexico and 31% in Panama. The report contrasts these results with findings that established business ownership typically exhibits lower and less variable activity rates.

Among different sectors, GEM’s research indicates that lower-income economies are more likely to produce much higher proportions of new startups, specifically in the consumer services sector, where entry requirements are generally less demanding.

Out of 14 economies, consumer services represent 67% of new startups in the lowest economic income group, compared to just 33% for middle and higher-income economies combined.

Entrepreneurs in the Latin America & Caribbean region also present higher overall job creation expectations than other regions. Puerto Rico, Chile, Brazil, and Mexico each reported that more than 30% of those starting and running new businesses expect to employ at least six more people over the next five years. New entrepreneurs in European economies typically show much lower job creation expectations, possibly reflecting higher onboarding costs for new employees and more cautionary hiring approaches.

Entrepreneurship Surges as New Business Owners Embrace the FutureEntrepreneurship Surges as New Business Owners Embrace the Future
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Support Gap for Women Entrepreneurs

GEM’s survey experts found that in most economies (27 out of 49), women entrepreneurs benefited from satisfactory or better access to resources. In just five economies, India, Qatar, Norway, Sweden, and the United Arab Emirates, experts agree that social support for women entrepreneurs and resource access are satisfactory or better than for men.

GEM’s survey experts rated social support for women as unsatisfactory in most economies (37 out of 49).

Survey participants indicated fear of failure as a significant obstacle to establishing new startups, particularly for women. At least two in five adults in 35 of the 45 participating economies would not start a business for fear it might fail. In 37 economies, more women than men fear that starting a business may lead to failure. The biggest perception gap was in the United Kingdom, where 63% of women would not start a business for fear it might fail, compared to just 44% of men.

Embracing Future Opportunities

GEM’s survey highlights the strong consideration entrepreneurs are giving sustainable development goals (SDG), with at least one in two new entrepreneurs identifying SDG as a priority in 25 of 33 economies. Established business owners were equally, if not more, active in green operating practices, with at least one in two taking steps to minimise environmental impacts in 36 of 45 economies.

In 28 of 45 economies, over 50% of new entrepreneurs indicated they had taken concrete steps to minimise the environmental impact of their new business.

Regardless of income level, many economies saw new entrepreneurs prioritising good environmental or sustainability practices above economic performance, showing a significant shift in mindset among those launching new businesses today. Of 48 economies, GEM’s experts assessed 39 as being satisfactory or better in prioritising good sustainability practices, and 36 economies prioritised good environmental practices. Conversely, only 27 economies were assessed as prioritising economic performance over sustainability goals.

Entrepreneurship Surges as New Business Owners Embrace the FutureEntrepreneurship Surges as New Business Owners Embrace the Future
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Entrepreneurs Remain Resilient

Survey respondents indicated that entrepreneurs who have exited a business in the past 12 months are much more likely to start a new business in the upcoming three years. In 32 of 46 economies, those exiting a business were over twice as likely to launch a new business in the next three years than the general public.

Economies are presenting strong entrepreneurial environments regardless of income level. Examples include India and China, both in the lower-income group, yet both registering in the top 10 out of all countries included in the GEM National Entrepreneurial Context Index. However, governmental policy can significantly influence outcomes. GEM data suggests that countries in the higher-income category do not always provide an excellent entrepreneurial environment. Notably, a small group of high-income economies in Europe and North America whose assessed quality of the overall entrepreneurial environment has slipped into the “less than sufficient” category. These regions include Canada, Sweden, Norway, Germany, and the United States, with France and Latvia close behind.

There is compelling evidence to support the view that entrepreneurship levels fell in the early period of the pandemic but have largely recovered in many countries since the “end” of the pandemic in 2021. Of the 32 economies participating in GEM in 2019, 2021, and 2023, 14 have levels of early-stage entrepreneurial activity that both fell in 2019–2021 and then increased in 2021–2023.

Entrepreneurship Surges as New Business Owners Embrace the FutureEntrepreneurship Surges as New Business Owners Embrace the Future
Image via Shutterstock

Encouraging Progress

GEM’s Global Entrepreneurship 2023/24 Global Report: 25 Years and Growing suggests that entrepreneurial activity has increased over the past 25 years, with entrepreneurship demonstrating consistent resilience during and after global crises. The report further emphasises the improving rate of female entrepreneurship and its approaching parity with that of men. Looking ahead, entrepreneurs appear poised to both contribute and leverage the benefits of sustainability for their operations and the good of the planet.


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