A newly published report by the Global Entrepreneurship Monitor (GEM)suggests that most entrepreneurs start their businesses out of opportunity and not necessity. According to the GEM 2017/18 Report, 74% of entrepreneurs globally start businesses to pursue opportunities.
The GEM report is in its 19th year and 2018 saw 54 countries participating in the annual survey, covering 68% of the world's population and 86% of the world's GDP.
Download the Global Entrepreneurship Monitor 2017/2018 Report.
"There is often a misperception that necessity drives most entrepreneurs in regions like Africa or Latin America. The reality is that opportunity is overwhelmingly the most common driver of entrepreneurship in nearly every economy we surveyed in 2017. This finding is consistent - GEM has observed a stable pattern in recent years," said Mike Herrington, Executive Director at GEM.
More interesting is that, according to the GEM report, improvement-driven opportunity entrepreneurship predominates in all economies except in India, while economies with higher levels of economic development generally report higher levels of opportunity-driven entrepreneurship and higher levels of innovation (measured by the extent to which entrepreneurs are introducing new products that are unfamiliar to all or some customers and offered by few or no competitors). When looking at the different regions globally, North America tops the motivation index in 2017/18 with 5,2 improvement-driven opportunity entrepreneurs for every necessity-driven entrepreneur. Afrika, however, reports the lowest levels with a ratio of just 1,5. Other regional ratios in descending order are:
- Europe with 3,4
- Asian/Oceania 3,2
- LAC with 2,2
GEM tracks 12 entrepreneurship eco-system components that are considered important contributors to building a stimulating environment for entrepreneurs and those with entrepreneurial intentions. Overall, North America has the most conducive entrepreneurial framework conditions and Africa the least favourable.