The COVID-19 pandemic disrupted every social aspect and the business world was no exception. The Global Entrepreneurship Monitor report (GEM)2021/22 shone a spotlight on some of the difficulties impacting entrepreneurship around the world and the way entrepreneurs and the ecosystem confronted the pandemic, marking six emerging trends for the Post-COVID-19 Era.
by Chris Kotsakas – Editor in Chief, epixeiro.gr
In 2021, GEM’s Adult Population Survey (APS) featured at least 2,000 respondents across each of 47 economies. In 15 out of these 47 economies, more than half of those starting or running a new business agreed that the pandemic had led to new business opportunities. In 2020, this had been the case for just nine out of 46 economies. Another key finding, perhaps pointing to some degree of global economic recovery, is the response from entrepreneurs on their perception of the difficulty of starting a business. In 2021, more than 50% of entrepreneurs agreed that starting a business had become more difficult in 18 of 47 economies. In 2020, almost twice as many (33 out of 46 economies) had 50% or more of their would-be entrepreneurs agreeing that this was the case.
However the level of entrepreneurial activity in most countries is still low compared to pre-COVID-19 Era. GEM collects data on entrepreneurship annually and it is obvious that comparing 2021 to 2019 (pre-pandemic) disruption and uncertainty continue in multiple business sectors, especially in countries like Poland, Slovakia and Norway. Nevertheless, there are countries like Saudi Arabia and Holland whose economy has scored sufficient or better for all framework conditions.
In any case, entrepreneurship plays a major role in creating new business opportunities in the post-pandemic world. However according to a survey in a quarter of the GEM economies, over half of those starting or running a new business expect to employ no one but themselves in five years’ time. This may be indicative of high levels of informal “survival” businesses, created during economic hardship when no other alternatives or social safety nets are available, and when people resor to entrepreneurship as their only fall-back solution.
Another key finding shows that despite positive perceptions of the ease of starting a business, many entrepreneurs were constrained by the fear of failure. For example more than 70% of entrepreneurs in India and the United Kingdom could allay much of this fear by drawing greater attention to entrepreneurial success stories both large and small and implementing riskmitigating initiatives that reduce real and perceived impediments for startups.
The restrictions caused by the pandemic and the amelioration of the cyber infrastructure have led to the ascendance of cooptation in low budget countries where one out of two startups is due to increase the application of cyber technology in order to sell their products within the upcoming six months. However younger entrepreneurs are more into cyber technology than the established ones with the exception of South Africa, France and Korea.
The experts are really concerned about Entrepreneurship Education being a failure. Entrepreneurship Education was ranked last out of thirteen different business classes attended by students in 39 out of 50 countries that took part in the program in total. This could have long term consequences such as limitations in creativity, lack of comprehension when it comes to the dynamics of marketing, impediments for new business startups, all of which could lead to the reduction of business activity and growth.
In conclusion, economies and communities around the world have been hard hit by the COVID-19 pandemic. Fewer people start new businesses and a great number of the established ones fail to survive. On the other hand entrepreneurs have been grasping pandemic-related opportunities, such as e-commerce, and building resilience. There are a lot of measures that need to be taken in order to successfully support entrepreneurship and we need to start with education.
We should keep in mind that this report took place before the crisis in Ukraine whose impact on global entrepreneurship has yet to be estimated.
We would like to thank www.epixeiro.gr for their contribution
