MORE THAN HALF OF ALL ENTREPRENEURS EXPECT TO CREATE JOBS IN THE NEXT FIVE YEARS
Fifty-five percent of entrepreneurs worldwide expect to create at least one job in the next five years—this according to the Global Entrepreneurship Monitor (GEM) 2016/17 Global Report (pdf) released today with sponsors Babson College,Universidad Del Desarrollo,Universiti Tun Abdul Razak, andTecnológico de Monterrey.
Yet globally, many factors are in play that could hinder such entrepreneurial growth. These include sophisticated technologies and communications that may enable entrepreneurs to operate on their own, rigid labor regulations, poor availability of skilled or educated labor, limited access to entrepreneurial finance, and the decision to stay small to avoid the complexities of formalization.
“The power of entrepreneurship to create jobs demonstrates its crucial importance to economic growth and stability around the world,” said Babson College Professor and GEM U.S. Team Lead Donna Kelley. “Whether this means alleviating regulatory burdens or offering specialized financial support, policy makers and private stakeholders will need to direct their attention toward policies and practices that can together strengthen the ecosystem that supports the efforts and ambitions of entrepreneurs.”
GEM countries in the 2016 survey cover 69.2 percent of the world’s population and 84.9 percent of the world’s GDP. In its 18th consecutive year, the report continues to serve as the largest single study of entrepreneurs in the world.
According to the Global Entrepreneurship Monitor (GEM) 2016 Global Report:
Over the past year, entrepreneurial activity remained stable or increased in approximately two-thirds of all economies surveyed in both 2015 and 2016.
More than two-thirds of all adults see entrepreneurship as a good career choice, and the same believe entrepreneurs are seen as high status.
Sixty percent believe entrepreneurs receive positive media attention. Among the highest levels reported are China, Thailand, and Indonesia, where more than three-fourths of adults see positive media attention for entrepreneurs, Greece, India, and Mexico report around half this level.
“Societies that value and promote an entrepreneurial culture are more likely to innovate, which in turn, creates long-term economic growth,” said Babson College Professor and GEM U.S. Team Member Mahdi Majbouri. “In the U.S., for example, entrepreneurs are often seen as celebrities and highly admired. It is clear, especially here, that positive media attention makes a valuable contribution to the entrepreneurship ecosystem. Enhanced visibility for entrepreneurs provides others with reputable role models, and points them in the direction of networks and resources. Such access could make the difference between a potential entrepreneur and an intentional one.”
On average, 42 percent of all working-age adults see good opportunities around them for starting a business. This perception is just about equal across all economic development levels, with only a 3 percent difference between factor-and innovation-driven economies.
North America reports the highest rate of opportunity perception at 58 percent, however, this does not translate into robust entrepreneurial intention. Only 13 percent of North Americans intend to start a business in the next three years.
On the other hand, North America demonstrates the highest overall rate of entrepreneurial activity within existing organizations (6.5 percent). This behavior, called Entrepreneurial Employee Activity (EEA), includes the development and launch of new activities for an individual's main employer, and accounts for more than half the average Total early-stage Entrepreneurial Activity (TEA) in innovation-driven economies. Africa reports the lowest rate of EEA at just 1 percent.
The GEM Global Report aims to provide academics, educators, policy makers, and practitioners with key insights into the interdependency between entrepreneurship and economic development, by
- Uncovering factors that encourage or hinder entrepreneurial activity, especially related to societal values, personal attributes, and the entrepreneurship ecosystem;
- Providing a platform for assessing the extent to which entrepreneurial activity influences economic growth within individual economies; and
- Uncovering policy implications for the purpose of enhancing entrepreneurial capacity in an economy.
GEM recognizes that there is no one-size-fits-all solution for promoting entrepreneurship across the globe. However, the report offers some suggestions that could serve as a basis for discussion about policies and practices that might support entrepreneurs and promote greater impact on their societies.
“The GEM annual survey and related reports and policy briefs provide academics, educators policy makers, and practitioners with relevant and up-to-date information about the multi-dimensional nature of entrepreneurship,” said GEM Executive Director Mike Herrington. “There is little doubt that evidence-based policy decisions can help to create a nourishing entrepreneurial environment that benefits entrepreneurs in all phases of their businesses that will ultimately help build more resilient economies.”
Job Creation Projections
Societal Values about Entrepreneurship
Self-Perceptions about Entrepreneurship
Phases and Types of Entrepreneurial Activity
Gender and Age Distribution of Early-Stage Entrepreneurial Activity
Motivation for Early-Stage Entrepreneurial Activity
Industry Sector Participation
The Entrepreneurship Ecosystem
About the Report
The 2016 Global Entrepreneurship Monitor (GEM) Global Report represents the 18th consecutive year GEM has tracked rates of entrepreneurship across multiple phases of entrepreneurial activity; assessed the characteristics, motivations, and ambitions of entrepreneurs; and explored the attitudes societies have towards this activity, worldwide. This report includes results based on 65 world economies completing the Adult Population Survey (APS) (between the ages of 18 and 64 years) and 66 economies completing the National Expert Survey (NES). GEM countries in the 2016 survey cover 69.2 percent of the world’s population and 84.9 percent of the world’s GDP. The aim of this report is to inform academics, educators, policy-makers, and practitioners about the multi-dimensional nature of entrepreneurship around the world, advancing knowledge and guiding decisions that can lead to the conditions that allow entrepreneurship to thrive.
About the Global Entrepreneurship Monitor (GEM)
The Global Entrepreneurship Monitor (GEM) was initiated in 1999 as a joint venture of Babson College and the London Business School. Starting with 10 participating economies, the project expanded to include 73 economies in its 2014 survey. The latest survey spans 62 economies. GEM is the largest and most developed research program on entrepreneurship in the world. GEM is unique because, unlike most entrepreneurship data sets that measure newer and smaller firms, GEM studies the behavior 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. At a time in history when individual entrepreneurial activity may hold the key to transforming the global economy and discouraging ingrained economic disparity in countries with minimal economic opportunity, GEM data has influenced national economic policies and continues to expand its collaborative role. Global sponsors of the research include Babson College (lead sponsor) in the United States, Universidad Del Desarrollo in Chile, Universiti Tun Abdul Razak in Malaysia, and Tecnológico de Monterrey in Mexico. For more information, follow GEM on Twitter.
The Babson College United States GEM Team includes Professor Donna Kelley; Assistant Director of Special Projects,Marcia Cole; Associate Professor Abdul Ali: Vice Provost of Global Entrepreneurial Leadership Candida Brush; Professor and Chair of the Entrepreneurship Division Andrew Corbett; Associate Professor Phil Kim; Assistant Professor Madhi Majbouri; and Senior Lecturer Caroline Daniels.
About Babson College
Babson College is the educator, convener, and thought leader for Entrepreneurship of All Kinds®. The top-rankedcollege for entrepreneurship education, Babson is a dynamic living and learning laboratory where students, faculty, and staff work together to address the real-world problems of business and society. We prepare the entrepreneurial leaders our world needs most: those with strong functional knowledge and the skills and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in a common purpose to make a difference in the world, and have an impact on organizations of all sizes and types. As we have for nearly a half-century, Babson continues to advance Entrepreneurial Thought & Action® as the most positive force on the planet for generating sustainable economic and social value.