Global Entrepreneurship Is On The Rise
The entrepreneurial bug appears to be spreading globally. According to the latest Global Entrepreneurship Monitor from Babson College, there are nearly 400 million active entrepreneurs around the world.
The annual survey polled 140,000 adults ages 18 to 64 from 54 different economies. GEM estimates that 163 million are women early-stage entrepreneurs, 165 million are young early-stage entrepreneurs (18 to 35 years old), 65 million entrepreneurs plan on creating 20 or more jobs in the next five years, and 69 million offer innovative products or services that are new to the market.
The study reviews entrepreneurship based on three standards: inclusiveness, industry and impact. The amount of opportunity entrepreneurs have, their gender, the industry they choose and how they affect their societies also help determine how successful entrepreneurial ventures might be.
"In an economy, you want to have some elements of stability, where firms maintain their businesses, despite facing ups and downs in their industry, their businesses or in the economy over time," Donna Kelley, Babson College professor and the study's author, explained. "At the same time, there needs to be some dynamism, where new ideas and new firms sprout up and replace in part those that have run their course."
Across different economies, potential entrepreneurs may interpret a certain degree of opportunity to start a new business. GEM's survey shows that even in places like Bangladesh, in which there is a high rate of perceived opportunity to start a business, many believe they do not have the capabilities or have a high fear of failure. Other economies in which potential entrepreneurs showed a high fear of failure or low capabilities included Japan, the Republic of Korea, Singapore and the United Arab Emirates. In light of the recent European economic downturn, survey participants in Greece, Hungary, Portugal and Spain all perceived very low levels of opportunity. Alternately, prospective entrepreneurs in the U.S. showed a moderate perception of opportunity, but great confidence in their abilities and a low fear of failure.
At 55.8 percent, Colombia reported the highest rate of non-entrepreneurs with entrepreneurial intentions, while more than 86 percent of Brazilians felt that entrepreneurship was a good career choice.
One of the most significant findings in the GEM survey was the steady increase of total entrepreneurial activity (TEA) across all the different economic levels despite a worldwide economic struggle over the past few years. Countries in the efficiency-driven category saw an average increase of 25 percent. Many of these economies, including China, Argentina and Chile, already had high rates of entrepreneurial activity and saw further increases in 2011. Of the 20 innovation-driven economies, there was an average 22 percent increase in activity, driven mostly by a big jump in nascent entrepreneurship, which saw almost 36 percent more startups. Kelley noted that "the talk of job loss and jobs not coming back from the recession may not be painting a complete picture. Our GEM results provide some indication that startup activity may be a missing part in these reports."
Growth projections vary greatly. While most of the 54 economies have a high rate of low-growth projections, several economies, including China and the United Arab Emirates, display significant plans for high-growth potential, in which a company plans to add 20 or more employees over a 5-year span.