New Research from Global Entrepreneurship Monitor (GEM) Highlights US Entrepreneurs Are Starting or Running Businesses Near Pre-Pandemic Levels

WELLESLEY, Mass., Feb. 10, 2022 /PRNewswire/ -- More American entrepreneurs are increasingly seeing more business opportunities despite the dramatic economic effects of the pandemic, according to new data reported in the Global Entrepreneurship Monitor's (GEM) 2021/2022 Global Report: Opportunity Amid Disruption released today at Expo 2020 Dubai.

"Much like with crises throughout history, the COVID-19 pandemic crisis surfaced new opportunities for entrepreneurs around the nation," said Babson College Professor Jeffrey Shay, one of the report co-authors. "While some of the United States' entrepreneurs may have chosen this route due to economic necessity, many have done so because of opportunity and positive perceptions of starting a business and self-confidence in their skills and abilities."

Data Shows Positive Perception

One key GEM measure is the level of Total early-stage Entrepreneurial Activity (TEA): the percentage of 18-64 year old adults actively engaged in starting or running a new business. While the country's TEA declined in 2020, it recovered quickly in 2021, to the nearly pre-pandemic level of 16.5%. The new report shows Americans recognized a need for innovation and quickly acted to identify new opportunities. Moreover, some 66% of adults believe it is easy to start a business and 63% reported that the pandemic introduced good opportunities to start a business in their area.

In 2020, 36% of the US respondents intending to start a business soon said it was due to the pandemic, one of the lower rates among peer economies at the time. Now in the 2021 data, many entrepreneurs are seeing the COVID-19 era as presenting opportunities: 52.6% of TEA respondents see new opportunities as a result of the pandemic. Additionally, 60.8% of these respondents plan to use more digital technologies to grow their business in the next six months, indicating a willingness to adjust strategy and invest in the new consumer demands.

The Rise of Solopreneurship

A strong characteristic of COVID-19 era entrepreneurship is that it appears to be accelerating the rate of single-employee companies, known as "solopreneurship," a trend that started a few years earlier.

In 2021, the rate of US adults expecting to remain as the only employee in their business was up by nearly 20% from 2020. Like entrepreneurship more generally, some of these solopreneurs start their business out of economic necessity, but many do so out of opportunity. This means business opportunity, or the opportunity for more flexible work arrangements, became more essential during COVID-19.

Implications for Policymakers

In the United States, federal and state policymakers could consider these factors in crafting policies. While many are looking to push employers to classify contractors as benefit employees, policymakers could instead assist these solopreneurs by providing decent options for health care, savings and other benefits. More Americans are revealing their preference for flexible work, but current policies disincentivize these potential entrepreneurs.

Entrepreneurship Trends from Around the World

• In 15 out of 47 economies, more than half of those starting or running a new business agreed that the pandemic had led to new business opportunities. In 2020, this had been the case for just nine out of 46 economies.
• In 2021, more than 50% of entrepreneurs agreed that starting a business had become more difficult in 18 of 47 economies. In 2020, almost twice as many (33 out of 46 economies) had 50% or more of their would-be entrepreneurs agreeing that this was the case.
• In 22 of the 47 economies, more than one in two adults agreed their household income had decreased.

About GEM
Global Entrepreneurship Monitor (GEM) is a consortium of national country teams, primarily associated with top academic institutions, that carries out survey-based research on entrepreneurship around the world. GEM is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs! GEM's Adult Population Survey (APS) provides analysis on the characteristics, motivations and ambitions of individuals starting businesses, as well as social attitudes towards entrepreneurship. The National Expert Survey (NES) looks at the national context in which individuals start businesses.

By the numbers, GEM is:
- 23 years of data
- 3,000,000+ entrepreneur respondents and expert interviews since 1999
- 148,000+ respondents to the 2021 GEM Adult Population Survey
- 2,000+ expert interviews for the 2021 GEM National Expert Survey
- 120+ economies since 1999
- 370+ specialists in entrepreneurship research (GEM National Team members)
- 300+ academic and research institutions
- 200+ funding institutions
- 1,000+ publications in peer reviewed journals

GEM began in 1999 as a joint project between Babson College (USA) and London Business School (UK). The consortium has become the richest resource of information on entrepreneurship, publishing a range of global, national and 'special topic' reports on an annual basis. www.gemconsortium.org

GEM Global Sponsor
Babson College
Babson College prepares and empowers entrepreneurial leaders who create, grow, and steward sustainable economic and social value everywhere. We shape the entrepreneurial leaders our world needs most: those with strong functional knowledge, skills, and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in organizations of all types and sizes. A global leader in entrepreneurship education recognized by U.S. News & World Report, our undergraduate, graduate, executive programs, and partnership opportunities are tailored to the needs of our world.

GEM Report Sponsors
United Arab Emirates Ministry of Economy
The United Arab Emirates Ministry of Economy contributes to achieving the UAE's vision and strategic directions in terms of supporting innovation and excellence. The Ministry has adopted innovation as a methodology in all areas of its work and made it an integral part of its strategic objectives. The Ministry is keen to provide an incubating and stimulating environment for innovation, and to launch initiatives, strategies and programmes that consolidate and spread the culture of innovation at the national level. The Ministry has included innovation in its corporate vision: "Building a diversified global competitive economy based on knowledge and innovation and led by national competencies".

Khalifa Fund for Enterprise Development
Khalifa Fund was established in June 2007 under Law 14 of 2005, as an independent, Not-for-Profit Small and Medium Enterprises (SMEs) Socio-economic Development Agency of the Government of Abu Dhabi. The purpose of establishing the fund is to help develop local enterprises in Abu Dhabi by instilling and enriching the culture of investment among UAE nationals, as well as supporting and developing small to medium-sized investments in the Emirate. Khalifa Fund started with a total capital of AED 300 million, which was gradually increased to AED 2 billion, covering all the United Arab Emirates.

Cartier Women's Initiative
The Cartier Women's Initiative is an annual international entrepreneurship program that aims to drive change by empowering women as high-impact entrepreneurs. Founded by Cartier in 2006, the program is open to women-run and women-owned businesses from any country and sector that aim to have a strong and sustainable social and/or environmental impact. www.cartierwomensinitiative.com.

School of Management Fribourg (HEG-FR)
HEG-FR is a trilingual public business school located in Fribourg, Switzerland and a member of the University of Applied Sciences and Arts of Western Switzerland (HES-SO). Its Institute of Small and Medium Enterprises houses the Swiss chapter of GEM research, which is headed by Professor Rico Baldegger, Ph.D, in collaboration with other colleagues from institutions such as SUPSI Manno in Ticino, Switzerland.  More information is at https://www.heg-fr.ch/en/.

SOURCE Babson College

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