New GEM Report: ENTREPRENEURS WORLDWIDE IDENTIFYING OPPORTUNITIES

Entrepreneurs are increasingly seeing more business opportunities in the midst of the COVID-19 pandemic, according to the latest Global Entrepreneurship Monitor (GEM) Global Report entitled Opportunity Amid Disruption, unveiled today at Expo 2020 Dubai. 

In 2021, GEM’s Adult Population Survey (APS) featured at least 2,000 respondents across each of 47 economies. In 15 out of these 47 economies, more than half of those starting or running a new business agreed that the pandemic had led to new business opportunities. In 2020, this had been the case for just nine out of 46 economies. 

“Disruption and uncertainty continue  in multiple business sectors; but, as most entrepreneurs well know, with disruption comes opportunity,” said Professor José Ernesto Amorós, Interim GEM–GERA Board Chair and a member of the GEM Mexico Team. “It is clear from this year’s research that entrepreneurs have been grasping pandemic-related opportunities and building resilience.”

Another key finding, perhaps pointing to some degree of global economic recovery, is the response from entrepreneurs on their perception of the  difficulty of starting a business. In 2021, more than 50% of entrepreneurs agreed that starting a business had become more difficult in 18 of 47 economies. In 2020, almost twice as many (33 out of 46 economies) had 50% or more of their would-be entrepreneurs agreeing that this was the case. 

 “Living with the pandemic has certainly raised awareness of the business opportunities it brings in its wake," said Professor Stephen Hill, lead author of the Global Report.

Entrepreneurship Challenges
The report also shone a spotlight on some of the difficulties impacting entrepreneurship around the world. This includes:

• In 22 of the 47 economies, more than one in two adults agreed their household income had decreased.
• Comparing 2021 to 2019 (pre-pandemic), Total early-stage Entrepreneurial Activity (TEA; GEM’s most well-known indicator, representing the percentage of adults that are starting or running a new business) has typically decreased. This has also been the case for levels of Established Business Ownership (EBO; the percentage of adults aged 18–64 owning or managing a business for more than 42 months).
• In a quarter of the GEM economies, over half of those starting or running a new business expect to employ no one but themselves in five years’ time. This may be indicative of high levels of informal “survival” businesses, created during economic hardship when no other alternatives or social safety nets are available, and when people resort to entrepreneurship as their only fall-back solution.

Implications for Policymakers
It is difficult to make informed decisions without having the right data. GEM fills this void for policymakers. GEM is the only global research source that collects data on entrepreneurship directly from the source — entrepreneurs! Policymakers can take action based on GEM data to help their respective entrepreneurial ecosystems to thrive.

"Reading through the Global Report economy profiles, one country that stands out is the Republic of Korea,” said Dr Aileen Ionescu-Somers, GEM Executive Director. “It is most impressive how this country responded to the pandemic by effectively managing COVID-19 outbreaks, resulting in a sustained high level of entrepreneurial activity throughout the crisis. In addition Spain has continued its impressive balance between different types of entrepreneurs, both male and female as well as older and younger entrepreneurs. Also noteworthy is Chile, whose population has built on a recent tradition of confidence in their ability to start businesses, and managed to recover its high TEA rate. I encourage all policymakers to study the GEM Economy Profiles. Consider the different actions — both positive and negative — and use that as a guide as you look to enable entrepreneurship to flourish in your communities of interest.”

“Consistent with crises throughout history, the COVID-19 pandemic crisis surfaced new opportunities for entrepreneurs around the globe,” added Babson College Professor Jeffrey Shay, one of the report co-authors. “However, despite positive perceptions of the ease of starting a business, self-confidence in their skills and abilities, and other factors, many entrepreneurs were constrained by the fear of failure. Policymakers could allay much of this fear by drawing greater attention to entrepreneurial success stories both large and small and implementing risk-mitigating initiatives that reduce real and perceived impediments for startups.” 

United Arab Emirates: The Most Supportive Environment for Entrepreneurship
GEM defines a number of Entrepreneurial Framework Conditions (EFCs), many of which are the direct responsibility of the government in each country. GEM seeks out expert views on the sufficiency or otherwise of each condition by carrying out a National Expert Survey (NES) in each economy. The NES asks the same questions of at least 36 national experts in each economy, and often more, each of whom has an identified high level of expertise in at least one of the framework conditions, which are:

A1. Entrepreneurial Finance - Are there sufficient funds for new startups?
A2. Ease of Access to Entrepreneurial Finance - And are those funds easy to assess?
B1. Government Policy: Support and Relevance - Do they promote and support startups?
B2. Government Policy: Taxes and Bureaucracy - Or are new businesses burdened?
C. Government Entrepreneurial Programs - Are quality support programs available?
D1. Entrepreneurial Education at School - Do schools introduce entrepreneurship ideas?
D2. Entrepreneurial Education Post-School - Do colleges offer courses in starting a business? 
E. Research and Development Transfers - Can research be translated into new businesses? 
F. Commercial and Professional Infrastructure - Are these sufficient and affordable?
G1. Ease of Entry: Market Dynamics - Are markets free, open and growing?
G2. Ease of Entry: Burdens and Regulation - Do regulations encourage or restrict entry? 
H. Physical Infrastructure - Is this sufficient and affordable?
I. Social and Cultural Norms - Does culture encourage and celebrate entrepreneurship?

In 2021, of the 47 GEM-participating economies, national expert assessments scored the United Arab Emirates as having the most supportive environment for entrepreneurship. The UAE has the highest total score by a clear margin, having improved in 11 of the 13 framework conditions since 2020, and scoring highest of all 47 economies in four of them. The United Arab Emirates is the only economy to have scored as sufficient or better for all framework conditions. 

The United Arab Emirates’ performance on its governance conditions was the most impressive among its 2021 scores. On the conditions Government Policy: Support and Relevance (7.0) and Government Policy: Taxes and Bureaucracy (7.5) the country had the highest scores among GEM Level A economies. The condition Government Entrepreneurial Programs (6.5) was second highest among this group. All three conditions improved over 2020, representing further progress in the country’s march to generating more impactful entrepreneurship. 

The launch of the GEM Global Report took place at the Dubai Exhibition Center on invitation by the UAE Ministry of Economy. Also sponsoring the report are the Khalifa Fund for Enterprise Development, Babson College, Cartier’s Women’s Initiative and the School of Management Fribourg. Thematic events focused on women’s entrepreneurship and entrepreneurship and the UN Sustainable Development Goals.

Download the report.