Total early-stage entrepreneurial activity (TEA) dropped again in Italy in 2019, according to the 2019/2020 GEM Italy Report. It is now below 3%, close to the lowest level observed since soon after the financial crisis of 2008-2009. It follows a continuous decline from the highest level of about 5% reached in 2015. In 2019, Italy was the country with the lowest level of TEA among those surveyed by GEM.
Here are some of the other key findings.
- The age pattern of TEA is similar to other developed countries: the highest TEA is in the 25-34 age category (7.6%). However, in Italy the difference between this age category and the youngest and oldest ones is higher than the EU average. TEA drops to 1.9% in the youngest (18-25 age category) and to 2.7 for the 35-44 age category.
- As observed in other countries, TEA links with personal income. In the case of Italy the difference in the entrepreneurial propensity between those with a high income and those with a medium or low income is much higher than in the EU average: TEA is about 10% in high income adults and less that 2% in the other income categories. This may be the result of the difficulties in raising financial resources to start a new business. Indeed, this issue was underlined in the NES (National Expert Survey) as a weakness of the Italian entrepreneurial ecosystem.
- The GEM survey reveals a discrepancy between the willingness to start an entrepreneurial career and the actual involvement in the starting of new businesses. Among the factors explaining this discrepancy are a high level in the fear of failure and a low level of self-perception in the ability to start and run a business. These issues call for a strong investment in entrepreneurship education at all levels, from primary education to universities.
- Similar to other countries, we also see a significant gender gap in Italy. On average, female TEA is about half the male value. There is a higher percentage of necessity-based entrepreneurship among females; male TEA comprises a higher share of opportunity entrepreneurship and for this reason is more dependent on the economic cycle.
The COVID-19 crisis is severely affecting entrepreneurial activity. We are witnessing a sharp decline on new firm formation as a result of the lockdown. This decline will likely continue in the following months. Moreover, we expect a sharp recovery in new firm formation in the second half of the year. In the next months we also expect a significant increase in business closures especially in industries like tourism and leisure, which are more affected by mobility restrictions and are characterized by a large share of small enterprises.
This is a crisis like no other in terms of macroeconomic impact and changes in consumer and business models. Entrepreneurial activity is going to play a crucial role in the post-crisis phase: to move resources from declining to growing sectors and to introduce innovations in all sectors.
The GEM Report provides a thorough analysis of the factors affecting entrepreneurial activity which may help in the design of policy measures aimed at supporting established and would be entrepreneurs. Download the full report.
For questions please contact d.iacobucci@univpm.it. You can also watch a recorded webinar focused on entrepreneurship in Italy at the following link.