New GEM Research: Impact of the Pandemic on Entrepreneurship Worldwide is Mixed; United Arab Emirates #1 in Global Entrepreneurship Monitor Index
Fribourg, Switzerland – The global pandemic had a mixed effect on entrepreneurship across the world, according to the 2022/2023 Global Entrepreneurship Monitor (GEM) Global Report: Adapting to a “New Normal”.
Based on interviews with over 175,000 individuals and experts from 51 economies, the report tracks the percentage of adults who are starting or running a new business (referred to as Total early-stage Entrepreneurial Activity or TEA). Countries have experienced variable impacts from the pandemic. Among the 38 economies that participated in GEM research both in 2019 (prior to the pandemic) and 2022, there were 12 that had a substantially higher level of TEA in 2022 compared to pre-pandemic, and 16 in which TEA dramatically levels fell. Meanwhile, in 10 of those economies, there was minimal change. All regions and income levels are represented in each group.
The pandemic’s impact on entrepreneurial perceptions has also been highly varied. Of the 38 economies participating in the GEM’s Adult Population Survey (APS) in both 2019 and in 2022, there were 12 economies in which the percentage of adults seeing good local opportunities to start a business fell by five points or more. There were another nine economies in which that percentage actually increased by more than five points. One explanation for these differences may be the level of support that governments were willing (and able) to offer to businesses and households during the pandemic.
“Our aspiration at GEM is clear: to provide transparency to policymakers so that they can make better decisions to truly promote entrepreneurship, understanding the specific national conditions, and also observe and act on the impact of their decision-making over time,” said Professor José Ernesto Amorós, GEM–GERA Board Chair and a member of the GEM Mexico Team.
Fear of failure is a serious constraint on business startups in many economies from all income groups. In a number of economies, high proportions of adults agree that starting a business is relatively easy, and see good opportunities to start a business locally, while also considering themselves to have the skills and experience to create a startup. However, around half of those seeing such opportunities are nevertheless deterred from taking action by fear of failure.
“Access to educational programs specifically focused on risk assessment and mitigation coupled with policies that reduce the perceived personal costs of failure could unleash a significant, and pent-up, wave of entrepreneurial activity,” said Jeffrey Shay, Entrepreneurship Professor at Babson College and one of the 10 co-authors of the report.
United Arab Emirates: The Most Supportive Environment for Entrepreneurship
For the second consecutive year, the United Arab Emirates is number one in the GEM National Entrepreneurship Context Index (NECI). GEM defines the entrepreneurial context of a particular economy in terms of 13 different characteristics, labelled the Entrepreneurship Framework Conditions (EFCs):
- Entrepreneurial Finance: there are sufficient funds for new startups
- Ease of Access to Entrepreneurial Finance: and those funds are easy to access
- Government Policy — Support and Relevance: policies promote and support startups
- Government Policy — Taxes and Bureaucracy: new businesses are not over-burdened
- Government Entrepreneurial Programs: quality support programs are widely available
- Entrepreneurial Education at School: schools introduce entrepreneurial ideas
- Entrepreneurial Education Post-School: colleges offer courses in how to start a business
- Research and Development Transfers: research is easily transferred into new businesses
- Commercial and Professional infrastructure: quality services are available and affordable
- Ease of Entry — Market Dynamics: markets are free, open and growing
- Ease of Entry — Burdens and Regulations: regulations encourage not restrict entry
- Physical Infrastructure: good-quality, available and affordable
- Social and Cultural Norms: encourage and celebrate entrepreneurship
The NECI results are based on the scores of the Framework Conditions for each of the 51 economies participating in GEM. At least 36 experts, often more, are selected for their expertise by the GEM National Team and approved by GEM to assess statements that make up the scores. As the same questions are asked in all economies, scores can be compared across countries. In 2022, the UAE ranked first for seven of the 13 Framework Conditions and number one overall.
“Entrepreneurship remains a high priority in the United Arab Emirates, with the recently launched ‘Projects of the 50’ targeting the next 50 years of development,” said Teemu Kautonen, Professor at the United Arab Emirates University leading the GEM UAE National Team. “These results point to the success of recent government initiatives and the efforts of all stakeholders in our entrepreneurial ecosystem.”
“The EFCs are derived from more than two decades of GEM research, experience and knowledge,” said Aileen Ionescu-Somers, GEM Executive Director. “The state of the EFCs can encourage and enable, or discourage and constrain, both the new start and any subsequent growth and development. The quality of the EFCs is directly influenced by governmental policy, and therefore GEM’s NECI can be a useful strategic tool for policy decision makers that are seeking to cultivate entrepreneurship, build a robust entrepreneurship ecosystem and empower entrepreneurs.”
(Access NECI Summaries of the United Arab Emirates, Saudi Arabia, Taiwan, Switzerland and the United States).
Entrepreneurial Support for Women and Older People
In 2022, men were more likely than women to start a new business, according to the research. Of the 49 economies participating in the APS, there were just four in which the level of female new entrepreneurial activity exceeded that of men: Togo, Indonesia, Qatar and Poland.
Younger people are still more likely than older adults to be starting new
businesses. The TEA rate of the 18–34 age group exceeded that of the 35–64 age group in 37 of the 49 economies in the GEM APS.
The aforementioned gaps highlight areas for improvement and should be a focus for policymakers seeking to support the success of future entrepreneurs.
Members from each of the 51 GEM-participating teams are involved in creation of the Global Report. The authorship team consists of:
GEM Global - Professor Stephen Hill (Lead Author), Aileen Ionescu-Somers and Professor Alicia Coduras.
GEM Chile - Professor Maribel Guerrero, Arizona State University, USA, and Universidad del Desarrollo, Chile
GEM Israel - Professor Emeritus Ehud Menipaz, Ben Gurion University
GEM Morocco - Fatima Boutaleb, Hassan II University of Casablanca
GEM Poland - Professor Przemysław Zbierowski, University of Economics in Katowice
GEM Turkey - Professor Thomas Schøtt, University of Agder, Norway
GEM UK - Professor Sreevas Sahasranamam, University of Strathclyde, Glasgow
GEM USA - Professor Jeffrey Shay, Babson College
The launch of the GEM Global Report took place at the School of Management Fribourg, Switzerland.
Global Entrepreneurship Monitor (GEM) is a consortium of national country teams, primarily associated with top academic institutions, that carries out survey-based research on entrepreneurship around the world. GEM is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs! GEM’s Adult Population Survey (APS) provides analysis on the characteristics, motivations and ambitions of individuals starting businesses, as well as social attitudes towards entrepreneurship. The National Expert Survey (NES) looks at the national context in which individuals start businesses.
In numbers, GEM is:
- 24 years of data
- 3,600,000+ GEM Adult Population Survey interviews since 1999
- 173,000+ respondents in the 2022 Adult Population Survey
- 2,000+ expert interviews for the 2021 GEM National Expert Survey
- 120+ economies since 1999
- 370+ specialists in entrepreneurship research (GEM National Team members)
- 300+ academic and research institutions
- 200+ funding institutions
- 1,000+ publications in peer reviewed journals
GEM began in 1999 as a joint project between Babson College (USA) and London Business School (UK). The consortium has become the richest resource of information on entrepreneurship, publishing a range of global, national and 'special topic' reports on an annual basis. Learn more at www.gemconsortium.org.
GEM GLOBAL SPONSOR
Babson College prepares and empowers entrepreneurial leaders who create, grow, and steward sustainable economic and social value everywhere. We shape the entrepreneurial leaders our world needs most: those with strong functional knowledge, skills, and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in organisations of all types and sizes. An international leader in entrepreneurship education recognized globally by U.S. News & World Report, our undergraduate, graduate, executive programs, and partnership opportunities are tailored to the needs of our world.
GEM REPORT SPONSORS
Cartier Women’s Initiative
The Cartier Women’s Initiative is an annual international entrepreneurship program which aims to drive change by empowering women impact entrepreneurs. Founded in 2006, the program is open to women-run and women-owned businesses from any country and sector that aim to have a strong and sustainable social and/or environmental impact. At the heart of the Cartier Women’s Initiative is the vision of a world where every woman impact entrepreneur can realise her full potential. To reach this vision, obtaining and monitoring hard data related to the state of women’s entrepreneurship is critical in enrolling more support into the ecosystem and to drive collaboration. Cartier Women’s Initiative partnered with GEM as it was in search of a partner to track, monitor and assess women entrepreneurship activities.
School of Management Fribourg (HEG-FR)
The School of Management Fribourg (HEG-FR) is a bilingual public business school located in Fribourg, Switzerland, and a member of the University of Applied Sciences and Arts of Western Switzerland (HES-SO). Its Institute of Small and Medium Enterprises houses the Swiss chapter of GEM research, which is headed by Professor Rico Baldegger, PhD, in collaboration with other colleagues such as those at SUPSI Manno in Ticino, Switzerland. One of the forerunners in Switzerland for training and interdisciplinary
research in the area of entrepreneurship and SMEs (small and medium enterprises), the School of Management Fribourg has a particular thematic interest in research on women’s entrepreneurship and impacts of entrepreneurship on the UN Sustainable Development Goals (SDGs).
Communications Consultant at GEM
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