By María Paula Espinosa, Reinaldo Armas, Alicia Reyes, María Francisca Fernández, María Dolores Mahauad, and Diana Espinoza
Ecuador’s entrepreneurial ecosystem faced a perfect storm in 2024. Energy shortages, rising insecurity, and a deepening migration crisis – driven by limited job opportunities – combined with persistent political instability, to create a challenging environment for business creation and growth. These pressing factors have elevated the country’s risk rating, restricted access to international financing, and dampened investor confidence.
This uncertainty is shaping the country’s entrepreneurial landscape, according to the latest GEM Ecuador National Report. Falling sales linked to energy and security crises, unstable regulations that discourage investment, and limited credit availability all pose significant threats to new ventures and entrepreneurial intentions.
However, Ecuador stands out in Latin America for its strong entrepreneurial culture and high early-stage activity. The country’s TEA reached 33.37% in 2024, up from 2023 and well above the regional average of 20.45%, placing Ecuador first in the region. Men and women engage in entrepreneurship at nearly equal rates, with only a modest gender gap (34.84% for men vs. 32.02% for women).
Yet structural challenges persist. Only 3 in 10 Ecuadorians have full-time jobs, pushing many into survival-driven entrepreneurship in low-value, high-competition sectors. And while financial system liquidity grew by 6.7% in May 2024 and private credit has expanded sharply since 2021, access to financing remains uneven, particularly for small businesses.
The report concludes that without decisive public policy action—such as targeted public spending, stabilizing regulations, and improving access to affordable credit—entrepreneurial activity risks stagnating. Ecuador’s entrepreneurial future hinges on restoring political and economic stability and implementing policies that foster innovation and reduce structural barriers.
The transformation toward a more dynamic ecosystem will require a collaborative effort among multiple stakeholders: the government, through its various public entities; the private sector; and academia. The latter plays a fundamental role in consolidating a more robust and inclusive ecosystem by offering quality entrepreneurial education and facilitating access to genuine innovation labs, digital experimentation, and networking opportunities.
Access the report (in Spanish).
This report was developed by the GEM Ecuador team in collaboration with Universidad Técnica Particular de Loja (UTPL), through its School of Business EDES and Faculty of Economic and Business Sciences, Pontificia Universidad Católica del Ecuador Sede Ibarra (PUCESI), and Universidad Espíritu Santo (UEES).