The impact of the pandemic on global entrepreneurship varies by country, according to new research.
The Global Entrepreneurship Monitor tracks the percentage of adults starting or running new businesses, called “total early stage entrepreneurial activity” (TEA).
Based on interviews with more than 175,000 individuals and experts in 51 economies, the latest report shows that countries have experienced varying impacts from the pandemic. Twelve of the 38 economies that participated in the GEM’s Adult Population Survey (APS) both pre-pandemic and post-pandemic in 2022 have significantly higher TEA levels in 2022 compared to pre-pandemic. , and 16 economies experienced a dramatic drop in TEA levels. In 10 of those countries, there was minimal change.
The impact of the pandemic on entrepreneurial perceptions is also very diverse. There were 12 countries in which the proportion of adults seeing good local opportunities to start a business decreased by 5 percentage points or more, while the proportion increased by 5 percentage points or more in 9 countries.
One explanation for these differences may lie in the level of support governments were willing (and able to provide) to businesses and households during the pandemic.
Srevas Sahasranamam, co-author of the report and Associate Professor of Entrepreneurship and Innovation at the Strathclyde Business School in Glasgow, UK, said:
We find that fear of failure is a serious constraint on starting a business in many economies at all income levels. In many economies, most adults agree that starting a business is relatively easy and see good opportunities to start a local business.
However, about half of those who see such an opportunity still hesitate to take action due to fear of failure.
For the second year in a row, the study found that the United Arab Emirates was ranked #1 for the most supportive environment for entrepreneurship in the GEM Context Index (NECI). The GEM defined entrepreneurship in a given economy in terms of 13 different characteristics, termed the Entrepreneurship Framework Conditions (EFCs).
The NECI results are based on the scores of the framework criteria for each of the 51 participating economies. At least 36 experts were selected to assess the statements that make up the score, allowing comparisons across countries. In 2022, the UAE ranks first in 7 out of 13 framework conditions and 1st overall.
Professor Teemu Katonen of the United Arab Emirates University, who leads the GEM UAE national team, said: These results demonstrate the success of recent government initiatives and the efforts of all stakeholders in the entrepreneurial ecosystem. ”
GEM Executive Director Aileen Ionescu-Somers added: Since the quality of EFC is directly influenced by government policies, GEM’s her NECI is dedicated to policy makers seeking to foster entrepreneurship, build robust entrepreneurial ecosystems, and empower entrepreneurs. A useful strategic tool for ”