global entrepreneurship trends

• The Worldwide Entrepreneurship Monitor 2021/22 analyzes entrepreneurial attitudes and trends, shedding light on how entrepreneurs and the ecosystem have dealt with the global pandemic.
  
• Based on over 150,000 survey responses, we outline six developing themes in entrepreneurship following COVID-19.
• COVID-19 had a significant impact on entrepreneurship, with fewer people starting new enterprises and many established businesses failing. Nonetheless, some entrepreneurs are capitalizing on new and developing opportunities.

The COVID-19 pandemic has wreaked havoc on all aspects of life, including entrepreneurs. The Global Entrepreneurship Monitor (GEM) 2021/22 study examines entrepreneurial attitudes and trends in countries, shedding light on how entrepreneurs and the ecosystem have dealt with the epidemic globally. Based on over 150,000 survey responses, we outline six developing themes in entrepreneurship following COVID-19 (at least 2,000 respondents from each of the 47 GEM participating countries).

1. Positive entrepreneurial enthusiasm toward opportunities shows that the global economy is on the mend.

There are significant signs of a global economic recovery, as seen by optimistic entrepreneurial sentiments about new prospects and starting a firm. More over half of individuals beginning or running a new firm in 15 of these 47 economies agreed that the epidemic had created new business prospects. This was the case for only nine of the 46 economies in 2020. Similarly, more than one in every two entrepreneurs in 18 of 47 economies agreed that establishing a business had become more challenging in 2021. In 2020, nearly twice as many (33 out of 46 economies) would-be entrepreneurs agreed that this was the case.

2. Most countries' entrepreneurial activity rates remain lower than pre-pandemic levels.

GEM measures entrepreneurial activity rates on an annual basis, and a comparison of data from 2019, 2020, and 2021 shows that in most countries, entrepreneurial activity has yet to recover to pre-pandemic levels. In Poland, the Slovak Republic, and Norway, the decline has been greater than half. There are, however, exceptions, most notably in Saudi Arabia and the Netherlands, both of which have seen rises in entrepreneurial activity during the last two years. The graph below depicts the levels of Total Early-Stage Entrepreneurial Activity (TEA) in each year for the 34 nations taking part in GEM in 2019, 2020, and 2021.

3. Low-growth entrepreneurial activity is on the rise.

GEM collects both entrepreneurial intentions and growth predictions through its Adult Population Survey (APS). Entrepreneurship is critical to post-pandemic employment creation, and high-growth enterprises are critical to achieving this goal. However, we see a troubling trend of entrepreneurs with low growth aspirations. Over half of people establishing or running a new business in a quarter of the economies analyzed expect to employ no one but themselves in five years. This could be a sign of a high degree of "informal survival" enterprises, implying new start-ups as a method of surviving in the absence of alternative revenue prospects due to the pandemic.

4. There is a contradiction between believing it is simple to start a business and intending to do so.

Certain countries exhibit a perplexing paradox. While many persons believe that starting a business in their country is simple, only a small percentage intend to do so. For example, in the United Kingdom, more than 70% of respondents think that it is simple to start a business there; but, less than one in ten intends to do so in the next three years. Similarly, in India, more than 80% of respondents say that it is simple to establish a business there. However, less than one in every five adults plans to establish a business in the next three years. In both of these countries, more than half of individuals who see strong prospects to start a business say that the fear of failure will prevent them from doing so. This shows that educated policymaking is required to effect cultural change in order to increase entrepreneurial intentions and give more robust assistance to early-stage entrepreneurs.

5. Digitalization is on the rise in low-income nations and among young entrepreneurs.

Pandemic-induced constraints and improved digital infrastructure have accelerated and boosted the prevalence of digital technology adoption among low-income countries, where one in every two new start-ups expects to use digital technologies to market their products in the next six months. In all but three economies, emerging entrepreneurs adopt digital technologies more than established firm owners: South Africa, France, and the Republic of Korea. More incentives and/or training are needed to encourage existing enterprises to invest in digital technology in order to avoid being left behind as markets evolve.

6. School-based entrepreneurship education continues to fail.

GEM's National Experts Survey (NES) collects the perspectives of experts from each participating countries on the state of the entrepreneurial environment in that country. A particularly concerning trend here is that experts typically regard school-based entrepreneurial education as a failure. Entrepreneurial Education at School was ranked last among the 13 ecosystem system criteria examined in 39 of the 50 economies participating in the NES in GEM 2021. This could have long-term effects such as inhibiting innovation, nurturing a poor knowledge of market dynamics, and adults' eventual non-leveraging of new venture development aspirations, stifling economic progress. This should be a simple property of the entrepreneurial environment, but it appears that many people are getting it wrong. Let the 2020s be remembered as the decade in which Entrepreneurial Education in Schools improved from the poorest to the best rated of the GEM ecosystem conditions.

Conclusions

There is no doubt that the pandemic has had a significant impact on entrepreneurship, with fewer people beginning new enterprises and many established businesses failing. Nonetheless, there are promising signals, as some entrepreneurs exploit new and developing opportunities, such as internet trading. There is much to be done to encourage entrepreneurship, not the least of which is to create role models who show that initial business failure may be a springboard to future success. A excellent place to start is in schools, where successive generations have been ill-prepared for a life of entrepreneurship.