2020/2021 Global Report AUTHORS Professor Niels Bosma, PhD, Utrecht University, Netherlands Professor Stephen Hill, DSc, Lead Author Aileen Ionescu-Somers, PhD, GEM Executive Director Professor Donna Kelley, PhD, Babson College, United States Professor Maribel Guerrero, PhD, Universidad del Desarrollo, Chile Professor Thomas Schott, PhD, University of Southern Denmark, Denmark Although GEM data were used in the preparation of this report, their interpretation and use are the sole responsibility of the authors. GEM GLOBAL SPONSOR/FOUNDING INSTITUTION GEM GLOBAL REPORT SPONSOR ACKNOWLEDGEMENTS Special thanks to Francis Carmona, Forrest Wright and Alicia Coduras for the data analysis and preparation of tables and country data, to Laura Freeborn for coordinating report content, to Kevin Anselmo for editing support, writing the entrepreneur profiles and coordinating the communications outreach of the Global Report, and to Dean Bargh of Witchwood Production House and Chris Reed of BBR Design for design, copy-editing, layout and project management. We are particularly grateful to Forrest for writing the Policy Roadmaps in the Economy Profiles section. We would also like to acknowledge the GEM National Teams for overseeing the GEM Adult Population Survey and conducting the National Expert Survey, as well as contributing their local knowledge about entrepreneurship in their economies. We thank the entire GEM central administrative and technical team, the GEM Research & Innovation Projects teams (GRIPs), and the board of directors for their oversight. Published by the Global Entrepreneurship Research Association, London Business School, Regents Park, London NW1 4SA, UK ISBN (print): 978-1-9160178-6-3 ISBN (ebook): 978-1-9160178-7-0 Cover image: iStock.com/wildpixel Design and production: Witchwood Production House http://www.witchwoodhouse.com BBR Design http://bbrdesign.co.uk © 2021 Niels Bosma, Stephen Hill, Aileen Ionescu-Somers, Donna Kelley, Maribel Guerrero, Thomas Schott and the Global Entrepreneurship Research Association (GERA) Global Entrepreneurship Monitor 2020/2021 Global Report Foreword from the GEM Chair of the Board Niels Bosma, PhD When fierce shocks Entrepreneurs form the glue that holds such as the COVID-19 societies together. They also connect societies pandemic occur, the across time and place. Due to COVID-19, markets role of entrepreneurship and rules of the game will change — and for society is magnified. new solutions to the challenges faced will be Of course, the initial key developed. New inventions, small and large, focus was (and remains) will be tested in the market and may fail in on preventing the the first instance, whereas an adapted version number of infections may be successful in a different context. It and casualties caused by an unrelenting virus. is therefore key for institutions not just to However, with the first wave of lockdowns, the cater to the need to keep existent businesses implications for businesses and their employees alive. They must also continue to nurture a came to the fore. Many governments responded fertile ground for entrepreneurship and stay with relief packages, even though not all connected with other economies, to remain governments have similarly deep pockets. In some alert to new opportunities, and safeguard economies, wages could still be paid, whereas in the jobs of the future. Against this backdrop, others many had to adapt and find alternative, and with the knowledge that new, successful creative solutions. Many entrepreneurs’ activities entrepreneurship is hard to predict, it is crucial were sorely missed during the second and third to keep monitoring how entrepreneurial waves of lockdowns experienced in a number of perceptions, attitudes and activities fare across economies. the globe. In 2020, a year like no other in the 22 years of our existence, our dedicated network of GEM National Teams comprising hundreds of passionate entrepreneurship scholars and our expert GEM Global coordination team, worked hard to assure continuity of our research. We warmly thank everyone involved in this effort and also the plethora of sponsors that support our activities — with particular appreciation to our Global Sponsor Babson College. We warmly thank the School of Management Fribourg, University of Applied Sciences & Arts Western Switzerland, our GEM Switzerland team, and in particular Professor Rico Baldegger, PhD, for the generous additional sponsorship support of the 2020/21 Global Report and engagement to GEM, particularly during this immensely challenging period for all university institutions worldwide. We also thank the GEM Research & Innovation Project (GRIPs) teams and finally the GEM/Global Entrepreneurship Research Association Board. Given these most challenging of times for universities, business schools and research institutions, your contributions are all the more valued. Global Entrepreneurship Monitor 2020/2021 Global Report 1 Note from the Executive Director Aileen Ionescu-Somers, PhD It was in early March recovery will be on policymakers’ agendas. 2020, precisely the time This report can support those efforts. of our GEM Annual Global Entrepreneurship Monitor, as its Meeting and 2019/20 name indicates, has kept a steady finger on the Global Report Launch in pulse of how entrepreneurs are impacted by the Miami, Florida, that the world around them for the past 22 years. In fact, icy grip of a previously how entrepreneurs respond to crises is a good unknown virus was barometer of the global economy’s health. This noticeably spreading 2020/21 Global Report not only holds a mirror to populations around the globe. Literally up to the state of the art of entrepreneurship, one week later, on 11 March 2020, the World but also to the state of economies and Health Organization declared COVID-19 a global policymaking around the world. It reflects the pandemic. Since then, a related public health and start of an unprecedented story that will likely economic crisis has impacted almost every human play out for some years to come. We invite our being on the planet in one way or another. Large stakeholders to accompany us on that journey parts of economies in many countries have been, by reading and reflecting on the 2020/21 Report and — at the time of going to press, still are — at a and using it as a benchmark and/or robust virtual standstill. The global economy is in shock source of data and information for their own and, while massive vaccination programs are activities. Stay tuned for more insights in 2022 being implemented, urgently needed economic and beyond. 2 Global Entrepreneurship Monitor 2020/2021 Global Report Join our research project It is diffi cult for policymakers to make informed decisions without having the right data. Global Entrepreneurship Monitor (GEM) fi lls this void. GEM is the only global research project that collects data on entrepreneurship directly from the source—entrepreneurs! It is your one-stop shop for everything you need to know about entrepreneurship in your country, region or city. Be part of future Global Reports, providing a snapshot of entrepreneurial activity across the world. You can contribute towards National Reports that include international benchmarking, local context and national entrepreneurship policy recommendations. “GEM off ers academics the opportunity to be part of a prestigious network, explore various dimensions of entrepreneurship and gain a full picture about the entrepreneurial activity of a country.” Virginia Lasio, Team Leader of GEM Ecuador and Professor at the ESPAE Graduate School of Management “GEM is your one-stop shop for everything you need to know about entrepreneurship in your country. It shows every stakeholder where to invest.” Iskren Krusteff , Entrepreneur and Founder of GEM Bulgaria For more information, visit www.gemconsortium.org or write [email protected] Contents Foreword from the GEM Chair of the Part 1 Analysis 19 Board 1 1. Introduction 20 Note from the Executive Director 2 1.1 An introduction to GEM 20 1.2 The GEM methodology 20 The GEM Story and a Tribute to 1.3 Entrepreneurship in the age of COVID-19 24 Co-founder Michael Hay 11 1.4 2020 GEM economies 24 1.5 The impact of the COVID-19 pandemic on household income 25 Executive Summary 13 1.6 The structure of this report 27 The domino effect: has the COVID-19 pandemic reduced incomes? 14 2. Attitudes and Perceptions 28 Opportunity knocks: which economies are the most entrepreneurial? 14 2.1 What does it mean to be an entrepreneur? 28 Green or red flags: can anyone start a business? 15 2.2 Knowing an entrepreneur, and the impact of the pandemic 28 Entrepreneurship diversity: has the pandemic affected younger and older entrepreneurs differently? 16 2.3 Opportunities and intentions 31 Bucking the trend: is there still a gender gap in 2.4 Knowledge and fears: self-perceptions 35 entrepreneurial activity? 16 2.5 Conclusions 37 Off the scale: has the pandemic reduced entrepreneurial activity? 16 3. The Level of Entrepreneurship A post-COVID-19 world: how different will the picture in 2020 38 be for entrepreneurs? 17 A final message 17 3.1 Introduction 38 3.2 Entrepreneurial activity in 2020 38 3.3 Incomes and entrepreneurial activity 40 3.4 Changes in entrepreneurial activity 41 3.5 Entrepreneurial activity and the pandemic 43 3.6 Entrepreneurial activity by sector 45 3.7 Entrepreneurial employee activity and sponsored entrepreneurship 49 3.8 Exiting a business 49 3.9 Conclusions 52 4 Global Entrepreneurship Monitor 2020/2021 Global Report 4. Diversity and Entrepreneurship 53 Part 2 Economy Profiles 83 4.1 Who are the entrepreneurs? 53 4.2 Gender and entrepreneurship 53 4.3 Age and entrepreneurial activity 55 4.4 Education and entrepreneurial activity 57 Part 3 Appendix Tables 177 4.5 Growth expectations and the pandemic 59 4.6 Entrepreneurship and aspirations 60 GEM Indicators 178 4.7 Conclusions 62 Global GEM Sponsor 208 5. Why Start a Business? 63 GEM Global Report Sponsor 209 5.1 Introduction 63 National GEM Sponsors 209 5.2 Starting a business in a pandemic 63 5.3 Why start a business? 65 5.4 Markets and innovation 69 5.5 Conclusions 71 6.