Total early-stage Entrepreneurial Activity (TEA) - the percentage of the 18-64 population who are either a nascent entrepreneur or owner-manager of a new business - recovered last year in Spain, reaching a rate of 5.5% of the population, according to the just released GEM 2021/2022 Spain National Report. This is similar to levels prior to the disruptions caused by the pandemic. In 2019, TEA was 6.1% while in 2020 it dropped to 5.2%.
Authored by Ana Fernández Laviada, Nuria Calvo, Mahsa Samsami, Isabel Neira, Yago Atrio and Esther Barros, the report notes that close to 10% of the population intend to become entrepreneurs in the next three years. There is also an increase in perceived opportunities in a post-pandemic environment.
In 2021, entrepreneurs still believe that they have more than enough knowledge and skills to start a business. The majority know other entrepreneurs who provide them with role models and potential alliances. However, fear of failure continues to be a limiting factor for 42%, and an inhibiting factor for 61% of non-entrepreneurs. Spain is at the head of its European benchmark countries in terms of the population’s fear of failure, despite experts’ perception of an improvement in the conditions of the entrepreneurial environment.
“Entrepreneurs in Spain have withstood the health crisis, maintained consolidated companies and avoided the closure of entrepreneurial initiatives,” said Fernández Laviada, Head of the GEM Spain Team and President of the Spanish Entrepreneurship Observatory (Observatorio del Emprendimiento de España). “However, despite the increase in the rate of potential entrepreneurs, we are still far from reaching the EU average.”
The profile of the entrepreneur has evolved in recent years. In 2021, the percentage of women involved in entrepreneurial initiatives of less than three and a half years (5.6%) was higher than that of men (5.4%), and increased in all stages of the entrepreneurial process. An entrepreneur in Spain is usually aged between 35 and 54, has an intermediate or higher level of education and has specific training to start and run a business. More than 70% of entrepreneurs consider the shortage of employment as one of the reasons for starting a business. However, 43% of those who have recently become entrepreneurs also express more ambitious motivations, such as creating businesses that make a difference in the world.
The report also notes that more than 70% of entrepreneurial initiatives are set up with less than 30,000 euros of capital and the majority are financed by the entrepreneur’s personal savings. The majority of entrepreneurial initiatives are microenterprises with less than five employees. However, there is an increase in the size of consolidated companies. Despite the perceived uncertainty regarding environmental conditions in the last year, more than half of the entrepreneurs who hired workers in the last 12 months opted to maintain small teams of full-time employees with permanent contracts, and more than 40% plan to hire new employees in the upcoming years.
“The overall emerging story of Spanish entrepreneurship is one of balance, whether in gender, region, socio-economic status or age,” said Aileen Ionescu-Somers, GEM Executive Director. “This reflects a healthy prioritization of entrepreneurship in Spain, as it emerges from the throes of the COVID-19 pandemic. This is, as far as GEM Global is concerned, exactly where Spain needs to be; entrepreneurs have truly been grasping opportunities amidst the disruption of the global pandemic. However, much remains to be done in terms of assuring that this balancing act continues, and the goals of the ambitious 2021 Spanish Entrepreneurial National Strategy are attained.”
“Throughout 2021, entrepreneurial people have regained their confidence to start a business,” concluded Fernández Laviada. “The professionalization of entrepreneurship is shown by the increase in the level of education and specific training of entrepreneurs, especially those who run the most innovative and technological initiatives.”