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Global Survey: Entrepreneurship Surged Worldwide in 2011

A new survey shows that entrepreneurship was on the rise last year, and more women started businesses than men.
Business Writers
February 15, 2012

Approximately 388 million people around the world were building or running new businesses in 2011, according to the Global Entrepreneurship Monitor. It was the 13th annual survey from Babson College.

There's no such surge in the United States, however. The report rated the U.S. entrepreneurship at 12 percent—nearly the same rate as 10 years ago.

Those U.S. residents likely to start ventures have a modest perception of new business opportunities. Yet, in the face of that, they display an American bravado and confidence in their abilities. They express a low fear of failure.

The survey doesn’t just tally businesses.

  • It measures such factors as inclusiveness and the distribution of entrepreneurship by sex and age.

  • It evaluates participation of entrepreneurs in key sectors or industries.

  • It looks at impact—the entrepreneurs’ growth aspirations, international-market reach and the degree of innovation in their products and services.

  • It measures potential entrepreneurial interest: the perceived capability of the populace and their faith that they can seek opportunity.

The survey found that although people see lots of opportunities for starting businesses in say, Bangladesh, few believe they are capable of entrepreneurship. Many are deterred by a fear of failure.

Expectations to start a business are high in confident, emerging economies, including China, Chile and Brazil.

Folks in European countries now swooning with sovereign debt and austere economic futures—including Greece, Portugal and Spain—have some of the lowest perceptions of entrepreneurial opportunity.

Where is the sense that opportunity is the lowest? Russia and the United Arab Emirates, countries that place a high emphasis on natural resources. Perhaps the politics and policies in those countries also dampen the zeal for business chances.

The survey spans geography, age ranges, gender, job creation and new entries into the market.

  • The annual survey contacted more than 140,000 adults, ages 18 to 64 from 54 different economies.

  • The survey extrapolates that there are 163 million female early-stage entrepreneurs and 165 million young early-stage entrepreneurs, ages 18 to 35 years old.

  • As many as 65 million entrepreneurs plan to create 20 or more jobs in the next five years.

  • A good 69 million offer products or services that are new to the market.

The report found that 104 million women started and managed new business ventures in 2010. They represented more than half the world's population and 84 percent of world’s gross domestic product.

"Women in general have lower perceptions than men about their capabilities for starting a business," Donna J. Kelley, a Babson associate professor of entrepreneurship and one of the report's lead authors, told Reuters. "But typically in the U.S., compared to other parts of the world, women see more opportunities for entrepreneurship than other wealthy economies."

The problem, Kelley explained, are “opportunity costs.’’ It’s a lot less expensive and painless to work for IBM, she says, than to start a business.

The Babson folks found that stringent labor regulations and onerous regulatory systems lower the number of entrepreneurs who have great impact by creating jobs.

"Policies that improve the flexibility of labor, communications and market openness while eliminating bureaucracy and red-tape will contribute to a more entrepreneurially focused business environment,’’ the authors said.

Read the full Global Entrepreneurship Monitor 13th annual survey from Babson College.

Photo credit: Thinkstock

Business Writers