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Business startup attempts drop in wealthiest countries

Entrepreneur
A 10% decline in new business start-ups amongst the world's wealthiest countries according to the latest GEM Report.
4 March 2010

The number of people trying to start businesses with the potential to boost the economy and create new jobs declined 10 percent in the wealthiest nations during the recent global slowdown. These are the newly-released results of the Global Entrepreneurship Monitor (GEM).

The study of 54 countries is based on more than 180,000 detailed interviews with working age adults. The UK component of this global project, which is one of the largest national surveys,  is directed by Professor Mark Hart (Economics and Strategy Group, Aston Business School).

Key findings of GEM's 2009 Global Report include:

  • Would-be entrepreneurs are having greater difficulty in obtaining financial backing for their start-up activities. This pool of money declined from $400 billion to $350 billion, a 12.5 percent drop. (Comparison of 33 countries)
  • In 2009, even as the number of people trying to start businesses in wealthy countries declined, a quarter of new entrepreneurs felt the prospects for their businesses are rosier than a year earlier. New entrepreneurs tended to be more optimistic than established business owners
  • Countries with strict employment protection regulations have fewer entrepreneurs who have a high potential to create jobs
  • In the wealthiest nations, huge country variations can be seen with declines in new startup activity in nine countries (including the USA, Germany, Denmark, Italy, Spain, Belgium and the UK) and increases in four nations. No change in five countries - France, Iceland, Japan, Netherlands, and Slovenia
  • The country with the highest increase in new startup activity was the United Arab Emirates with a 41 percent rise. 
  • GEM researchers have identified a number of factors needed to support entrepreneurship, including financial support, supportive government policies and programs, education and training, and supportive commercial, professional, physical infrastructures and social and cultural norms. Countries in different stages of development have different needs.

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