The one-person business is on the rise in 19 countries, according to a new global report.
Among 32 economies that were surveyed about this in the Global Entrepreneurship Monitor from 2019 to 2022, there was an uptick in 19 countries in the percentage of people who were starting or running a new business but did not expect to add anyone to payroll within five years.
Leaders of this solopreneur trend, most prevalent in Europe but also taking place in other countries, were the Slovak Republic (up from 40% in 2019 to 71% in 2022), Germany (up from 41% to 69%) and Oman (up from 48% to 71%)
However, the rate of solopreneurship declined in 13 countries, with the biggest dips in Poland (from 40% in 2019 to 15% in 2022), Brazil (54% to 31%) and the Republic of Korea (38% to 20%). That isn’t necessarily a negative trend: It may be because entrepreneurs in these countries plan to hire employees.
The Global Entrepreneurship Monitor, now it its 24th year, offers perhaps the world’s most sweeping view of entrepreneurship, surveying 51 economies that represent about two-thirds of the global population. It began as a joint project between Babson College and London Business School. Babson is its global sponsor, and a consortium of academic experts at more than 300 research institutions contribute to the report.
The researchers surveyed a random sample of at least 2,000 adults in each participating economy, for a total of 173,000 people. It also includes a survey of 36 national experts in 51 economies to provide context.
The report, written by lead author Stephen Hill, a professor at the Cleveland State University School of Business, positions entrepreneurs as a vital solution for countries around the world that are coping with a “New Normal” shaped by climate change, growing poverty, market shifts, supply chain gaps, disrupted retail and distribution systems and a rapidly changing global and economic system.
“Entrepreneurship is undoubtedly—and has always been an important part of the solution to repair damaged economies and societies,” GEM Executive Director Aileen Ionescu-Somers and José Ernesto Amorós Espinosa wrote in the report.
The report is organized by three groups of economies: Level A, with a GDP per capita of more than $40,000 (countries such as the U.S., the U.K., Switzerland, Canada, and Japan); Level B, with a GDP per capita of $20,000 to $40,000 (countries such as Argentina, Chile, Greece and Poland); and Level C, with a GDP per capita of less than $20,000 (including Brazil, China and India).
One key finding is that many citizens around the global are hurting financially after the pandemic, with many of those who can least afford it reporting a decline in household income. Among the highest-income Level A countries, the decline was 32% on average. For Level B, it was 62%. For Level C, it was 72%. Togo was the country that suffered the most widespread losses, with 90% of adults reporting a decline in household income.
Against this backdrop, people around the world cited four main reasons to start a business: to build great wealth, to earn a living because jobs are scarce, to make a difference and to continue a family tradition. The first two were generally the most common. The motivations to build great wealth and to make a difference were not tied to income level; however, the desire for a job substitute was higher among those with lower incomes.
There were many other findings that provide a snapshot of where entrepreneurship is percolating around the globe—and where support will be needed to spark or revive it.
The report defines people as entrepreneurs if they taken action to start a business or are already running one—as opposed to someone who is contemplating getting started.
Here are some findings that stood out:
- The proportion of adults starting and running a new business is highest in five countries: Columbia, Chile, Guatemala, Panama and Uruguay, followed by Uruguay and Togo.
- The United Arab Emirates (UAR) tops the list of the 12 countries where entrepreneurial activity has grown the most, with participation up 12%. It was followed by Columbia and Iran (both up 6%).
- There were 16 countries showing substantial downturns in total entrepreneurial activity. The largest declines were in Chile (down 10%), Morocco (down 7%) and Israel (down 4%).
- The UAR had the highest scoring environment for starting and growing a business, for the second consecutive year, among 51 economies the experts rated in the National Entrepreneurial Context Index. The index measures individual countries’ entrepreneurial ecosystems based on factors like access to capital, the availability of entrepreneurial education and government polic
- The next nine countries, in order, were Saudi Arabia, Taiwan, India, Netherlands, Lithuania, Indonesia, Switzerland, Republic of Korea and Qatar. The U.S. was tied for fourteenth place with Norway. Venezuela, which is seeing double-digit inflation and a recession in its main industry, oil, was at the bottom of the list.
- More than half of the adults in Brazil, Panama, Tunisia and Togo planed to start a business in the next six months.
- Job creation is percolating in some countries. In two economies—the U.A.R. and Panama—the percentage of adults starting businesses who expected to employ six or more people was four times the number of their counterparts who intentionally created one-person businesses.
- The most popular industry to start a business is consumer and business services. Businesses in this sector made up more than 2/3 of new startups in 40 out of 49 countries.
- Entrepreneurs in Latin American and the Gulf economies are embracing digital technologies in their small businesses at higher rates than other parts of the world, positioning them for success.
- The highest percentage of exits for “positive” reasons such as selling the business or going after a business opportunity, were in Saudi Arabia (5%), the United Arab Emirates, Canada and the United States (all 3%).
- Saudi Arabia has the highest percentage of adults (nearly 9/10) who believe there will be a good opportunity to start a business locally in the next six months. Closely following was Indonesia. Japan had the lowest level.
- Saudi Arabia also has the highest percentage of adults who believe it is easy to start a business (nearly 90%), followed by the Netherlands and Norway. Israel had the lowest percentage.
- Saudia Arabia tops the list when it comes to the percentage of people confident they have the skills and confidence to start a business (nearly 90%), followed by Togo. The percentage is lowest in Japan.
- In 37 out of 49 participating economies, more than 40% of the respondents who saw good opportunities expressed a fear of failure would hold them back. Saudi Arabia has the highest percentage of people who see opportunity but say they would be deterred from going after it by fear of failure (just under two-thirds). The Republic of Korea has the lowest percentage of adults slowed by fear of failure (one in five).
- Chile had the highest percentage of adults (22%) who had invested in someone else’s business in the past three years, followed by Guatemala (14%).
- Men were more likely to start a business, except in four countries—Indonesia, Poland Qatar and Togo.
- Younger people were the most likely to start a business worldwide, with the total entrepreneurial activity of those 18 to 34 greater than that of the people ages 35-64 in 37 of the countries where this was measured.
“Our aspiration at GEM is clear: to provide transparency to policymakers so that they can make better decisions to truly promote entrepreneurship, understanding the specific national conditions, and also observe and act on the impact of their decision-making over time,” said Professor José Ernesto Amorós, GEM–GERA Board Chair and a member of the GEM Mexico Team, said in a statement.
All told, the data provides powerful food for thought for policymakers who believe entrepreneurship can be a valuable way to build a better economic future.