Despite the persistent social and structural barriers, in 2020 the entrepreneurial spirit grew, even among non-traditional categories - with young people and women leading the way.
According to Eurostat estimates on annual growth in 2020, the GDP in the euro zone dropped by 6.8%, and in the EU-27 by 6.4%. In comparison, the contraction of the global economy will stop at 3.5%. Despite optimistic projections for 2021, the road to recovery looks very long indeed.
But the annus horribilis that was 2020 also produced some data that might be surprising, and certainly extremely thought-provoking. We’re referring to this recent IPSOS report: Entrepreneurialism. In the Time of the Pandemic What emerges from this study is that over one-third of adults all over the word say they their entrepreneurial spirit is very high.
This finding, albeit with marked divergence from country to country, is a sign of the capacity that many people have to react in the face of adversity created by the pandemic, a sign of hope for the near future. Leaving aside incentives and public financing, the entrepreneurial spirit is the bedrock on which to build a solid, long-lasting economic recovery, possibly in pursuit of innovation. In particular, among people who started a business in the last year, three out of ten say that they never intended to before, but the pandemic provided the motivation that spurred them on. Further proof of the refusal to passively accept adverse events.
The IPSOS study was carried out in late 2020 on a broad sample of over 20,000 people from 28 countries (Argentina, Australia, Belgium, Brazil, Canada, Chile, China, Colombia, France, Germany, Great Britain, Hungary, India, Italy, Japan, Malesia, Mexico, the Netherlands, Peru, Poland, Russia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey and the Unites States). The findings give us a detailed snapshot of various aspects of entrepreneurship, all of which governments, institutions, and banks should take into consideration.
Let’s start with the IPSOS Entrepreneurial Spirit Index, which factors in 18 key entrepreneurial traits from having a work ethic to a penchant for risk-taking, from creativity to personal ambition, from being passionate about what you do to being result oriented. The report reveals that 32% of citizens at a global level say they have a ‘very high’ entrepreneurial spirit, a number that more than doubles to 69% if we also include people who answered ‘high’.
If we look at the global ranking of countries with the highest entrepreneurial spirit, there is a sharp split between emerging economies and industrialized countries. Columbia tops the list, followed by South Africa, Peru, Saudi Arabia and Mexico. At the other end we find Belgium, Great Britain, France, the Netherlands, South Korea and Japan, with percentages consistently lower than the world average. At 29%, Italy ranks thirteenth in the world and first among European countries, up 5% from when IPSOS ran its last study on this topic in 2018.
Entrepreneurship manifests primarily in the more traditional form, that is, opening a business. In fact, three out of ten people in the world say they started at least one business at some time in the past. (Topping the ranking here is Peru, Columbia and South Africa; closing the list is Japan.) On this particular point, the number of Italians who affirm that they started a new business rose by 4% compared to 2018. (Italy is fourth overall for growth in this respect.) The same finding also applies to social entrepreneurship, that is, among people who say that they started an interest group to address social, political, or economic issues.
Added to these data are findings regarding the aspirations and projects for the future of the world’s citizens. In countries like Peru, Mexico and Columbia, over 60% of the interviewees say they want to start a new business in the next two years (the world average is 30%). Italy is holding steady mid-way in the ranking with 21%, a number that’s up by 7% over 2018.
In absolute terms, it is true that entrepreneurial spirit is highest among Millennials, Gen X, and people with higher education and income. However in the past two years at a global level the biggest increase is among the segments of the population that enjoy fewer advantages from an economic and social standpoint: women (+4% from 2018), Gen Z (+3%), those with a low level of education (+7%) and low income (+9%).
Yet doing business is not for everyone. Or better yet, not every aspiring business person starts out on a level playing field. The biggest disadvantages are experienced by women, LGBTQ people and people with disabilities.
The barriers to free entrepreneurial activity are not only social but structural and economic as well. The world over, governments as well as the financial and banking sectors are not seen as actively supporting citizens and their entrepreneurial aspirations. In this regard, the most negative opinion was expressed by the Japanese (with only 9% saying they are satisfied with the support they get). Instead, India, Poland and Malaysia are the countries where support for entrepreneurs is given very high marks (with percentages ranging from 43% to 64%); Italy is fourth from the bottom on this score, just above Peru, Hungary and Japan.
A lack of financing represents the main barrier to entrepreneurial activity for 41% of the interviewees at a global level. Instead, a lack of interest in entrepreneurship was common in Canada, Belgium, the US, Australia, Germany, Sweden, Great Britain and the Netherlands – with the percentage as high as 40% of interviewees. This was not the case in South Africa, Saudi Arabia, Columbia or Mexico. Another clear split between high-income countries and emerging economies.
A final consideration that we can realize from this report is how closely related entrepreneurial experience is to entrepreneurial spirit. People who already have prior business experience are more inclined to take risks and take the initiative. This goes to show that an entrepreneurial attitude should be encouraged to foster a proactive spirit among all citizens alike.