In today’s dynamic business landscape, understanding global entrepreneurship trends isn’t just helpful – it’s essential. The Global Entrepreneurship Monitor (GEM) stands as the world’s most comprehensive study of entrepreneurial activity, offering invaluable insights into how different cultures approach business creation and growth.
Since its inception in 1999, GEM has transformed the way we understand entrepreneurial ecosystems across borders. Through its annual assessments of entrepreneurial activity in over 100 economies, GEM doesn’t just count businesses – it reveals the human stories behind startup successes and failures. Think of it as the ultimate entrepreneurship report card for countries worldwide, measuring everything from societal attitudes toward business ownership to the nitty-gritty details of startup funding availability.
What Is the Global Entrepreneurship Monitor (GEM)
The Global Entrepreneurship Monitor (GEM) functions as the world’s largest collaborative research initiative tracking entrepreneurial dynamics. GEM collects data from over 100 economies to analyze entrepreneurial behavior patterns economic growth.
History and Evolution of GEM
GEM emerged in 1999 through a joint partnership between Babson College (USA) and London Business School (UK). The initial study covered 10 countries with a focus on understanding entrepreneurial activity variations across nations. By 2005, GEM expanded its research to include 35 countries establishing standardized measurement methodologies for entrepreneurship metrics. The project grew significantly reaching 50 countries by 2010 85 by 2015. Today, GEM’s research spans more than 100 economies representing 68% of the global population 86% of global GDP.
Core Objectives and Research Focus
GEM’s research concentrates on three primary areas: entrepreneurial behavior measuring individual participation in venture creation societal attitudes toward entrepreneurship entrepreneurial ecosystem conditions. The organization conducts annual surveys collecting data from 2,000+ adults per country through the Adult Population Survey (APS). GEM supplements this with expert opinions gathered via the National Expert Survey (NES) analyzing factors like government policies access to finance education training. The research evaluates both formal registered businesses informal economic activities providing insights into Total Early-stage Entrepreneurial Activity (TEA) established business ownership rates across participating economies.
Key Metrics and Indicators Used by GEM
GEM employs specific metrics to measure entrepreneurial activity across economies worldwide. These standardized indicators enable comparative analysis of entrepreneurship trends between countries through systematic data collection.
Total Early-Stage Entrepreneurial Activity (TEA)
TEA represents the percentage of working-age adults actively starting or operating new businesses less than 42 months old. This metric captures nascent entrepreneurs in the process of launching ventures plus owner-managers of new businesses. TEA rates vary significantly across economies, from 4% in some developed nations to over 30% in emerging markets. The measurement includes both opportunity-driven entrepreneurs pursuing market gaps and necessity-driven entrepreneurs starting businesses due to limited employment options. GEM data shows TEA rates correlate with economic development stages, displaying a U-shaped relationship where rates are highest in factor-driven and innovation-driven economies.
Established Business Ownership Rate
Established business ownership measures the percentage of adults operating ventures over 42 months old. This indicator reflects business sustainability within an economy by tracking ventures that survive beyond the startup phase. The rate accounts for businesses paying wages or generating income for over 3.5 years. Established business rates typically range from 2% to 15% across economies. Countries with higher established business rates often demonstrate more stable entrepreneurial ecosystems with supportive infrastructure for long-term business growth.
Entrepreneurial Framework Conditions
GEM evaluates 13 framework conditions that shape entrepreneurial activity in each economy:
- Access to entrepreneurial finance
- Government policy support
- Government entrepreneurship programs
- Entrepreneurial education
- Research and development transfer
- Commercial infrastructure
- Market dynamics
- Physical infrastructure
- Cultural social norms
- Internal market burdens
- Basic school entrepreneurial education
- Commercial legal infrastructure
- Regulatory entry barriers
Each condition receives a score from expert assessments through the National Expert Survey. These scores identify strengths and weaknesses in national entrepreneurship environments.
Global Entrepreneurship Monitor Research Methodology
GEM’s research methodology combines two comprehensive survey instruments to gather data about entrepreneurial activity worldwide. These surveys provide both expert insights and population-level data to create a complete picture of entrepreneurship in each economy.
National Expert Surveys
The National Expert Survey (NES) collects detailed assessments from 36 selected experts in each economy. Each expert evaluates 13 entrepreneurial framework conditions using standardized questionnaires with 10-point Likert scales. The experts represent diverse fields including entrepreneurs, investors, policymakers, academics. NES data collection occurs annually through face-to-face interviews, phone calls or online surveys between April and June. The survey measures specific indicators such as governmental support, market dynamics, infrastructure access, cultural norms, education systems and financial resources. This methodology enables cross-country comparisons of entrepreneurial ecosystems while maintaining consistency in data quality.
Adult Population Surveys
The Adult Population Survey (APS) interviews a minimum of 2,000 working-age adults (18-64 years) in each participating economy. The survey uses standardized telephone or face-to-face interviews conducted by professional research firms. APS measures individual involvement in business creation, ownership stages and entrepreneurial attitudes. The questionnaire captures data on nascent entrepreneurs, new business owners, established business owners and business discontinuation. Survey results provide insights into motivation factors, industry sectors, job creation expectations and innovation levels. The random sampling methodology ensures representation across gender, age groups, education levels and geographic regions within each economy.
Impact and Influence on Policy Making
GEM research data catalyzes policy changes in participating economies by providing evidence-based insights for entrepreneurial development. The comprehensive analysis influences government decisions through detailed assessments of entrepreneurial ecosystems.
Government Implementation of GEM Insights
Governments utilize GEM data to shape entrepreneurship policies across multiple sectors. Policy makers in Brazil implemented targeted support programs for early-stage entrepreneurs after GEM findings revealed a 23% drop in startup survival rates. The United Arab Emirates created entrepreneurship education initiatives in response to GEM data showing low entrepreneurial intentions among youth. National development agencies in Chile launched specialized funding programs based on GEM reports identifying access to capital as a primary barrier for local entrepreneurs.
Economic Development Strategies
GEM insights drive economic development initiatives through data-driven decision making. Countries like Estonia reformed business registration processes after GEM data highlighted administrative barriers to startup creation. Singapore enhanced its venture capital framework based on GEM measurements of entrepreneurial financing gaps. South Africa introduced small business development programs targeting specific sectors identified by GEM research as high-potential growth areas. The recommendations from GEM studies guide infrastructure investments focused on strengthening entrepreneurial ecosystems in emerging markets.
Regional Variations in Entrepreneurship
Global entrepreneurship patterns display distinct characteristics across different regions, reflecting diverse economic conditions, cultural values, and institutional frameworks. GEM data reveals significant contrasts in entrepreneurial activity between geographical areas, highlighting the complexity of global business development.
Developed vs Developing Economies
Entrepreneurial activity rates demonstrate marked differences between developed and developing economies. Advanced economies like the United States, Japan, and Western European nations show TEA rates between 4-12%, focusing on innovation-driven ventures. Developing economies, particularly in Africa and Latin America, exhibit TEA rates of 20-35%, with a higher proportion of necessity-driven entrepreneurship. This variation reflects fundamental differences in:
- Market Structure: Developed economies feature established corporations while developing markets offer more gaps for new ventures
- Resource Availability: Advanced economies provide better access to capital, technology and infrastructure
- Business Sophistication: Developed regions emphasize scalable technology ventures versus traditional business models
- Economic Stability: Mature markets offer more predictable business environments compared to emerging economies
- Social Status: Middle Eastern cultures regard business ownership as a mark of prestige
- Risk Tolerance: Mediterranean regions show higher acceptance of business failure
- Family Involvement: Asian markets feature strong family business traditions
- Gender Roles: Scandinavian countries lead in female entrepreneurship participation rates
- Education Values: North American culture promotes entrepreneurial education from early stages
- Community Support: African societies leverage communal networks for business development
Current Trends and Future Outlook
Global entrepreneurship continues to evolve rapidly in response to technological advancements, market shifts, and changing consumer behaviors. GEM’s latest research reveals significant transformations in entrepreneurial activities across different economies.
Post-Pandemic Entrepreneurship Landscape
Digital transformation accelerated entrepreneurial activities during the pandemic, with 42% of new ventures incorporating e-commerce solutions into their business models. Remote work adoption increased startup formation rates by 24% in developed economies. The healthcare sector experienced a 56% growth in new ventures, particularly in telemedicine platforms offering virtual consultations. Sustainability-focused startups grew by 35%, addressing environmental concerns through innovative solutions. Entrepreneurs adapted to market changes by embracing digital payment systems, resulting in a 78% increase in contactless transaction capabilities among new businesses.
| Trend | Growth Rate |
|---|---|
| E-commerce Integration | 42% |
| Remote Work Startups | 24% |
| Healthcare Ventures | 56% |
| Sustainability Startups | 35% |
| Digital Payments | 78% |
Emerging Market Opportunities
Southeast Asian markets lead entrepreneurial growth with a 45% increase in new venture creation. African economies demonstrate strong potential in mobile commerce, recording 38% year-over-year growth in digital startups. Latin American countries experience rapid expansion in fintech ventures, with Brazil leading at 52% growth. India’s startup ecosystem shows remarkable development in edtech platforms, capturing 28% of regional investments. Eastern European markets exhibit strength in blockchain technology ventures, attracting $3.2 billion in venture capital funding.
| Region | Growth Area | Performance |
|---|---|---|
| Southeast Asia | New Ventures | 45% |
| Africa | Mobile Commerce | 38% |
| Latin America | Fintech | 52% |
| India | Edtech | 28% |
| Eastern Europe | Blockchain | $3.2B |
The Global Entrepreneurship Monitor stands as an invaluable resource for understanding worldwide entrepreneurial dynamics. Its comprehensive research methodology and extensive data collection across diverse economies provide crucial insights that shape policy decisions and economic strategies globally.
Through its detailed analysis of entrepreneurial frameworks total early-stage entrepreneurial activity and established business ownership rates GEM continues to illuminate the path forward for both developing and developed nations. Its influence on policy-making has led to tangible improvements in entrepreneurial ecosystems worldwide.
As global markets evolve and new challenges emerge GEM’s role in tracking and analyzing entrepreneurial trends becomes increasingly vital for fostering sustainable economic growth and innovation across the globe.