Entrepreneurship is widely recognised as a fundamental driver of economic growth, innovation, and employment creation.
By converting innovative ideas into viable businesses, entrepreneurs stimulate market dynamism, foster competition, and generate new job opportunities, significantly contributing to economic resilience and prosperity.
Understanding and nurturing entrepreneurship is crucial for the sustainable development of any economy and since its inception in 1999 through a partnership between Babson College and London Business School, the Global Entrepreneurship Monitor (GEM) has emerged as the world’s largest and most authoritative research project on entrepreneurship.
With participation from 56 economies in its 2024 cycle, GEM continues to provide vital insights to policymakers on global entrepreneurial trends, behaviours, and challenges and the 2024 report has a range of fascinating results on entrepreneurial activity and behaviour.
First, it shows a paradox between the increasing number of people who believe it is easier to start a business and rising fears of failure. Indeed, whilst 40% of adults in 35 countries found starting a business relatively straightforward, a similar proportion in 43 countries had concerns about potential failure as a deterrent to business creation.
However, it is worth noting the research also shows that exiting a business does not necessarily deter future entrepreneurship. In fact, GEM data reveals that individuals who exited businesses in the past year are more likely to plan another start-up compared to those who left their business several years ago, challenging the negative stigma often associated with business failure.
Indeed, this entrepreneurial resilience is crucial for economic dynamism with business exits frequently paving the way for new ventures
Policies that reduce bankruptcy penalties and increase transparency around genuine risks could reduce this fear of failure whilst showcasing successful entrepreneurs who overcame initial obstacles that forced them to close their first business could substantially boost the entrepreneurial pipeline by showing that potential setbacks can be converted into strategic advantages.
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Not surprisingly, the GEM 2024 report again underscores persistent gender disparities in entrepreneurship with men continue to lead in entrepreneurial activity. Whilst there are targeted support programmes boosting women’s entrepreneurship rates, access to vital resources remains uneven and in nearly half the economies studied, women entrepreneurs lacked equitable access to funding, training, mentoring, and essential digital skills.
To bridge this gap, governments and institutions must adopt targeted initiatives promoting digital education, incentivise venture capital investment in women-led businesses, and implement supportive regulatory frameworks enabling better work-life balance, such as affordable childcare and robust parental leave policies.
In terms of the contribution of entrepreneurship to job creation and innovation, there are massive differences between poorer and richer nations. For example, in 70% of the economies studied, over a third of early-stage entrepreneurs expected to employ no additional staff beyond themselves in five years. Conversely, only eight economies (predominantly high-income) reported similar proportions of entrepreneurs anticipating significant employment growth of six or more employees.
There is a similar trend with innovative activity by entrepreneurs with high-income economies dominating the creation of novel products and services. Only a third of economies globally reported at least 5% of entrepreneurs offering genuinely innovative, new-to-the-world products or services, underlining a pressing need for supportive ecosystems in lower-income regions to foster creativity and scalable business ventures.
There remains a strong relationship between entrepreneurship and sustainability with over half of entrepreneurs globally now considering social and environmental impacts in strategic decisions. Interestingly, in high and middle-income economies, female entrepreneurs demonstrated stronger commitments to sustainability than their male counterparts.
Certainly, sustainable business practices, such as energy efficiency, waste reduction, and circular economy strategies, offer substantial cost benefits, enhance brand reputation, and attract customers and investors increasingly prioritising ethical consumption and investments.
One of the biggest disruptive forces on business during the last twelve months has been the introduction of artificial intelligence (AI). However, despite its transformative potential, awareness among entrepreneurs remains uneven globally with GEM finding fewer than 30% of entrepreneurs across most economies perceiving AI as essential within the next three years, with significant gaps evident between income groups.
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While entrepreneurs in high-income countries are increasingly leveraging digital marketing, those in low- and middle-income regions still require greater awareness and infrastructure support to harness AI’s potential fully.
Perhaps the most worrying finding from the report is that the assessments by national experts of their own economy’s entrepreneurial environments suggest that they are insufficient, with only a third rating their country’s policies being conducive to entrepreneurial success.
This underscores the critical need for enhanced policy interventions that breaks down the barriers to entrepreneurial activity, foster innovation, and enhance access to markets.
Therefore, the GEM 2024 report provides comprehensive insights and clear action points for entrepreneurs, policymakers, and institutions globally. Addressing fears around entrepreneurial failure, actively tackling gender disparities, encouraging sustainable innovation, and leveraging emerging technologies such as AI are imperative for fostering robust entrepreneurial ecosystems.
By prioritising targeted interventions including enhanced educational opportunities, fairer access to funding, supportive regulatory frameworks, and a strengthened focus on sustainability, countries can significantly improve entrepreneurial outcomes which, in turn, will not only fuel economic prosperity and innovation but also ensure a more equitable, resilient, and sustainable global economy for future generations.