Over the years, Global Entrepreneurship Monitor research has been used by the government in Spain to design and evaluate policies to foster entrepreneurship. Policymakers are now able to leverage new data from the GEM Spain 2019/2020 National Report. Ana Fernandez Laviada, head of the GEM Spain Team, shares some of the key findings from this latest report and the implications for policymakers in the below Q and A.
What are some of the key statistics about entrepreneurs in Spain that can be gleaned from the latest report?
Ana Fernandez Laviada: The total entrepreneurial activity rate (TEA) registered in Spain was 6.1% in 2019. This data means there are approximately six entrepreneurs with nascent or new business projects for every 100 adults. Although this is a slight decrease from 2018, when this rate was 6.4%, the drop is not statistically significant. Distinguishing by more specific phases, initial phase entrepreneurs (people involved in business start-ups who have not yet been paid wages for more than three months) represented 2.4% of the adult population, while the set of new entrepreneurs (people involved in business ownership and management who have paid been wages for more than 3 months, without exceeding 42 months) represented 3.8%.
What motivates Spanish entrepreneurs?
Ana Fernandez Laviada: The majority of the entrepreneurs included in the TEA indicator in 2019 were motivated by “creating wealth or a very high income” (59.5%). There was a significant percentage motivated by “making a difference in the world” (49.4%) and/or by “earning a living because work is scarce (42.3%). In contrast, the percentage of initial-phase entrepreneurs who decided to create a business driven by the motivation to “continue a family tradition” was relatively low at 13.3%.
What are the characteristics of Spanish entrepreneurs?
Ana Fernandez Laviada: The profile of initial phase entrepreneurs is similar to previous years. For example, initial phase entrepreneurs in 2019 had an average age of approximately 40. Likewise, male participation in entrepreneurial activities in the initial phase was only slightly higher than that of women (51.6% compared to 48.4% of entrepreneurs). The entrepreneurship gap between men and women has decreased continuously since 2013. The report also highlights that 46.5% of entrepreneurs with higher or postgraduate training in terms of human capital, while 58.5% are entrepreneurs that have received specific training to create companies. In terms of income level, those in the upper third showed a greater propensity to engage in initial-phase entrepreneurship in the last year.
It should be noted that the percentage of the Spanish population identified as potential entrepreneurs (people who intend to start a business within the next three years) increased by 8.1%. The percentage of people involved in business venture abandonments remained more or less stable in the last year, at around 1.6%.
How does Spain compare to other European Union nations?
Ana Fernandez Laviada: Spain is below the EU average for economies participating in the GEM project in terms of potential entrepreneurs, the level of initial phase entrepreneurial activity and the percentage of consolidated entrepreneurs. Spain only stands out in the percentage of entrepreneurs with new businesses, around the average of other EU countries. The percentage of people involved in business abandonment was also, in this case, favourably below the average of other countries.
How can Spain improve its entrepreneurial ecosystem?
Ana Fernandez Laviada: The report highlights three main recommendations:
1. Continue to work on the design of government policies that reduce administrative obstacles, and review tax legislation that encourages entrepreneurial activity;
2. Continue to strengthen various public/private financing options at different stages of the entrepreneurial process;
3. Strengthen entrepreneurial values/skills in the training programs taught at different educational levels.
Learn more by reading the full report.