Entrepreneurial activity in Russia showed growth of 35%

The GSOM SPbU research team presented preliminary findings of GEM 2016: Russia showed outstanding results in the number of people involved in the creation and running new companies. However, the majority of Russians is still not confident about their skills and national conditions for starting a business.

 

According to the large-scale study of entrepreneurial activity in the world - Global Entrepreneurship Monitor, GEM 6.3% of Russian working adult population are involved in the creation of new companies and managing them.

 

 

In terms of early-stage entrepreneurial activity in 2016, Russia is ahead of Italy (4.4%), Germany (4.6%), Spain (5.2%), France (5.3%), Greece (5.7%). In BRICS countries the number of people who had attempts to start and run business is higher. For example, in Brazil - 19.6% of the working population are early entrepreneurs, in China - 10.3%.

 

LEVEL OF ENTREPRENEURIAL ACTIVITY IN RUSSIA

In 2016 both the Total Entrepreneurial Activity Index and the Established Business Index showed significant growth in Russia.

 

 

The levels of entrepreneurial activity in Russia, 2006-2016,% of the adult working age population

  

The number of people whose business is on the market for more than 3.5 years has grown in 2016 in Russia as well - the number is 5.3% of the adult working-age population, it is also the highest value of this indicator for the entire period of study in Russia (since 2006 ).

 

  "In 2016 the number of new businesses has exceeded the number of closed ones to 60%. This makes it possible to talk about the expansion of the business sector. Closing a business was mainly due to financial reasons. About 33% of respondents stated that they were forced to close the business due to the fact that it was not profitable. 15% indicated that their reasons to close the business, associated with high taxes and bureaucracy. Above this results was only in Macedonia (30.9%), Italy (26.3%), Latvia (20.6%), Croatia (16.5%), " – says Olga Verkhovskaya, the GEM project leader in Russia, Associate Professor at GSOM SPbU.

 

 

Key findings of the latest GEM report worldwide

 

 

Over the past year, entrepreneurial activity remained stable or increased in approximately two-thirds of all economies surveyed in both 2015 and 2016. Average Total Early Stage Entrepreneurial Activity (TEA) rates (measured as the percentage of individuals aged 18-64 who are either a nascent entrepreneur or owner-manager of a new business) tend to be highest in factor-driven economies, decreasing with higher levels of economic development (17 per cent in factor-driven and 9 per cent in innovation-driven).

 

Regionally, TEA rates are highest in Latin America and the Caribbean and in Africa. In both regions, roughly one-fifth of adults are engaged in early-stage entrepreneurial activity. Europe reports the lowest regional TEA rates, with three of the four lowest rates in this region. Italy, Germany, Malaysia, and Bulgaria all fall below 5 per cent.

 

Innovation levels in an economy also tend to track the level of economic development. Regionally, innovation intensity is highest in North America at 39 per cent and lowest in Africa at 20 per cent.

 

However, several economies show an encouraging trend of high TEA rates coupled with robust levels of innovation. Chile is a leader in this respect, where 24 per cent of the adult population are starting or running a new business and of these, 57 per cent stated that they are introducing innovative products or services.

 

The report finds a strong link between levels of entrepreneurship and perceptions of entrepreneurship as being a positive career choice – also that this is affected by the type and frequency of media coverage of entrepreneurs. Sixty per cent of entrepreneurs in all regions believe entrepreneurs receive positive media attention. Among the highest levels reported are in China, Thailand, and Indonesia, where more than three-fourths of adults see positive media attention for entrepreneurs, Greece, India, and Mexico report around half this level. In India and Mexico, this is consistent with low beliefs about entrepreneurship as a good career choice and high status for entrepreneurs (less than 50 per cent for both indicators).

 

Jamaica reports the highest levels of media attention (87 per cent), consistent with its strongly positive perceptions about entrepreneurship (85 per cent).

 

According to Mike Herrington, Executive Director of GEM, the GEM Global Report aims to provide academics, educators, policy makers, and practitioners with key insights into the interdependency between entrepreneurship and economic development, by

  • Uncovering factors that encourage or hinder entrepreneurial activity, especially related to societal values, personal attributes, and the entrepreneurship ecosystem;
  • Providing a platform for assessing the extent to which entrepreneurial activity influences economic growth within individual economies; and
  • Uncovering policy implications for the purpose of enhancing entrepreneurial capacity in an economy.

 

“There is little doubt that evidence-based policy decisions can help to create a nourishing entrepreneurial environment that benefits entrepreneurs in all phases of their businesses that will ultimately help build more resilient economies,” said Herrington.

 

He adds that GEM recognises that there is no one-size-fits-all solution for promoting entrepreneurship across the globe. However, the report offers some suggestions that could serve as a basis for discussion about policies and practices that might support entrepreneurs and promote greater impact on their societies. As part of its commitment to distilling the lessons of entrepreneurship for individual countries, GEM also launched a series of policy briefs today that focus on specific policy influences on entrepreneurship in 37 economies featured in the report.

 

Source: The Global Entrepreneurship Monitor (GEM)