The results of the Global Entrepreneurship Monitor (GEM) for 2020 were presented at a meeting of the Commission of the State Council of the Russian Federation in the area of "Small and Medium Business" in Kaliningrad. Olga Verkhovskaya, Head of the Project in Russia, a Representative of the Graduate School of Management of St. Petersburg University (GSOM SPbU), made a report.
GEM assesses the level of business activity in the countries participating in the project annually. In 2020, the research covered 45 national economies. The key topic of monitoring was the impact of the coronavirus crisis on the business sector. In 2020, to implement the GEM methodology, when conducting a survey of the adult working-age population in Russia, a multi-stage stratified probability sample of 2002 respondents was used. The survey was conducted using the formalized face-to-face interview method.
In Russia, the level of entrepreneurial activity decreased in 2020 by 9% compared to the previous year. However, as the authors of the work noted, the overall trend remained positive. This can be judged, for example, by the fact that the number of Russians who made efforts to create their own business in 2020 exceeded the number of people who closed their business by 1.8 times. Interestingly, exactly the same excess was observed in the number of so-called newly entrepreneurs in relation to established ones. The expansion of the business sector continued despite the problems caused by the lockdown.
Russians were most motivated to create a business in 2020 by the need to provide a source of income. 71.4% of newly entrepreneurs and 78.8% of entrepreneurs who run business for three years, agreed that this is the key reason.
Interestingly, the share of “forced” startups is higher among women than among men. Thus, 76.4% of women noted that they were prompted to start a business by the lack of other options for work. Among men, this figure is 66.6%.
More about the motives: 68.7% of newly and 60.9% of experienced entrepreneurs admitted that the motivation for their activity is the desire to provide a large income and prosperity. In general, financial reasons are the main ones for Russia. Only a quarter of businessmen of all categories said their motivation to become entrepreneurs was a desire to "change the world for the better." Another 16% of entrepreneurs noted that they continued the family tradition.
In 2020 the most common reason for the closure of the business was the pandemic — 28.9%. Another 25.9% entrepreneurs noted that they did it because of the unprofitability of the business. This is almost 9% less than in 2019. In recent years, the share of businesses stopped due to the lack of funding has also decreased. In 2020, 6.2% of respondents in Russia said about it. This is less than the average among the countries participating in the project (9.8%).
The coronavirus pandemic has led to a slight increase in the assessment of entrepreneurship as a career choice in Russian society. This may be due to the fact that the media has begun to write more about success stories. But in people's assessments of the sufficiency of their own knowledge and experience to start their own business, Russia continues to occupy one of the lowest positions in the global GEM ranking. Although the assessment of the conditions for creating a business increased by 10% in 2020.
Talking about the impact of the pandemic, 56% of entrepreneurs agreed that there were fewer opportunities to grow. Among those actively attempting to start a business, 55% said they caused operational delays. At the same time, 21% of newly and 18% of experienced businessmen were confident that the pandemic had created new opportunities for business development.
Finally, assessing the conditions for the development of entrepreneurship on a 10-point scale, the study participants gave the best marks to such indicators as "the development of physical infrastructure" (6.4) and "market dynamics" (5.7). “Cultural and social norms” lag slightly (3.8 points), as well as “access to finance” (3.5). In the last places were "primary and secondary education" (2.7 points) and "scientific and technical developments" (2.4 points).