The 2017/18 Global Entrepreneurship Monitor (GEM) reports that entrepreneurship levels are stable or on the rise globally and that opportunity-driven entrepreneurship predominates, but there has been a worrying drop in job creation prospects across all economic development levels.
A robust 74% of entrepreneurs around the world declare that they started their business to pursue an opportunity rather than out of necessity - this according to the Global Entrepreneurship Monitor (GEM) 2017/18 Global Report released today with sponsors Babson College, Universidad Del Desarrollo, Universiti Tun Abdul Razak, and the Korea Entrepreneurship Foundation.
Fifty-four world economies participated in the 2017/18 GEM survey covering 67.8% of the world’s population and 86% of the world’s GDP. GEM is the largest single study of entrepreneurship in the world and has been operational for 19 consecutive years.
According to the new report, economies with higher levels of economic development generally report higher levels of opportunity-driven entrepreneurship and higher levels of innovation. Regionally speaking, North America tops the motivation index in 2017 with 5.2 improvement-driven opportunity entrepreneurs for every necessity-driven entrepreneur. Africa reports the lowest levels with a ratio of just 1.5.
Job creation expectations take a knock
Overall, the 2017 report has registered a worrying drop in the level of job creation expectations, especially in factor-driven economies (less developed economies as classified by the World Economic Forum). When comparing these economies that participated in both the 2016 and the 2017 research, two parallel changes were observed: the number of entrepreneurs who do not expect to create any jobs in the next five year rose from 43% in 2016 to 64% in 2017; and the number of those who expect to create six or more jobs in the next five years fell from 19% in 2016 to 11% in 2017. According to the report authors, these changes could signal that more entrepreneurs are choosing to operate on their own or as part of a network and that technology and life preferences may enable this.
Focus on framework conditions
GEM tracks 12 entrepreneurship eco-system components that are considered important contributors to building a stimulating environment for entrepreneurs and those with entrepreneurial intentions.
This year’s survey unveils encouraging signs of improvement in five of these (including access to finance, relevance of government policies, R&D transfer, internal market dynamics, and entrepreneurship at school age) in both factor- and efficiency-driven economies, and four in innovation-driven economies (entrepreneurship at school age and post school age, internal market dynamics and cultural and social norms).
About the Global Entrepreneurship Monitor (GEM)
The Global Entrepreneurship Monitor was initiated in 1999 as a joint venture of Babson College and the London Business School. GEM is unique because, unlike most entrepreneurship data sets that measure newer and smaller firms, GEM studies the behaviour of individuals with respect to starting and managing businesses. GEM academic teams in each participating economy are members of an exclusive research project that provides access to the collective knowledge of some of the world’s most renowned researchers and institutions involved in entrepreneurship research. GEM data has influenced national economic policies and continues to expand its collaborative role.
The School of Management Fribourg (HEG-FR), in collaboration with the ETH Engineering School in Zurich and SUPSI Manno in Switzerland, collects data for the Global Entrepreneurship Monitor (GEM) of Switzerland. The annual report on Switzerland reveals entrepreneurial attitudes, activities and aspirations, and identifies the factors influencing the type and extent of the entrepreneurial activities.