Entrepreneurialism alive and well in the time of the pandemic

One third of adults across the world show a very high level of entrepreneurial spirit, according to a new Ipsos survey of more than 20,000 men and women across 28 countries. Ipsos’ proprietary Entrepreneurial Spirit Index tracks the prevalence of 18 key entrepreneurial characteristics globally. Characteristics measured range from having a strong work ethic to a liking to take calculated risks.

The survey, conducted in late 2020, shows that entrepreneurial spirit varies widely by country. Colombia, where 61% expresses a very high entrepreneurial spirit tops the list, followed by South Africa, where 56% measures very high on the Entrepreneurial Spirit Index. Belgium, Great Britain, France, Netherlands, South Korea, and Japan rank lowest. This worldwide study is conducted online and in both South Africa and Columbia the sample is focused on the “connected” segment of the population. In South Africa about two thirds of adults have access to the internet – either at home or on a mobile phone.

Why does this matter?

Many pundits and economists have noted that entrepreneurialism is central to a sustained recovery as the pandemic drags on. Small businesses specifically have been devastated by the pandemic, particularly by rolling lockdowns. A renewed economy will depend in large part on entrepreneurial activity among citizens.

Key findings

1. Entrepreneurial spirit is growing in non-traditional groups; The pandemic has spurred entrepreneurial activity

• Entrepreneurial spirit is highest among expected groups - Millennials, Gen X, as well as those with higher education and income levels.
• Since the previous study of this kind in November 2018, entrepreneurial spirit has increased most among women, Gen Z, Millennials, Gen X, and among those with lower education and income. In South Africa this group exposing an entrepreneurial spirit has grown with 9 percentage points since November 2018.
• And, a full three in every ten of entrepreneurs who have started a business in the last year say that they were motivated to do so by the pandemic.

2. Women are seen at a disadvantage

• Most global citizens do not think that women are treated fairly when they try to start a business. A majority in only 5 of the 28 countries surveyed - China, Saudi Arabia, India, Malaysia and Turkey - perceive women are treated fairly, while it is a minority in all remaining 23 countries.
• Men, Millennials and those with higher income are more likely to believe that women are treated fairly when they try to start a business.
• In keeping with the rest of the world, only a third (33%) of online South Africans believe that women are treated fairly when they try to start a business.

3. Neither government nor the private/business sector are seen as doing a good job in actively assisting entrepreneurs globally.

• Globally, only 29% give positive ratings to their governments assisting entrepreneurs. Governments in India, Poland, Malaysia and Mexico are seen to be doing a better job whilst Governments in Belgium, Italy, Peru, Hungary and Japan rank lowest. South African opinions fall in the middle of the list, with only a quarter (25%) thinking that the government is doing enough to assist entrepreneurs.
• Four countries in very different parts of the world experienced the biggest improvements in the perceived government performance in assisting entrepreneurs since 2018. The rating in Germany increased with 18 percentage points, in Brazil with 15 percentage points, in Mexico with 13 percentage points and in Australia with 12 percentage points.
• Worldwide, 32% give business generally and banks/financial institutions in their country specifically, positive scores for assisting entrepreneurs. Online South Africans concur, with a third (32%) giving business credit for assisting entrepreneurs and 30% saying banks/financial institutions are doing likewise.

4. Barriers to starting a business vary widely by country

While funding is a top barrier to starting a business in most countries...

• Lack of interest is the top barrier in Canada, Belgium, US, Australia, Germany, Sweden, Great Britain and Netherlands.
• The economy is a higher barrier in Chile, South Korea, Malaysia, Brazil, Argentina, Turkey, France, Spain, China, Italy, Poland and Hungary.
• Knowledge is a higher barrier in Saudi Arabia, Chile, India, Malaysia, Russia, China and Japan.
• In South Africa, lack of funding is by far the most important handicap, with 65% mentioning it – other hindrances are the economy (19%) knowledge (10%) and interest (4%).

5. Business entrepreneurialism is challenged by social entrepreneurialism

Entrepreneurialism is being manifested mostly in its traditional form – by business creation (business entrepreneurialism). However, it is also being manifested, sometimes in conjunction with business creation but not always, in social entrepreneurialism (the creation of interest groups).

Indeed, social entrepreneurialism (those who say they have started an interest group) tends to be a more recent phenomenon than business entrepreneurialism.

• Among the 30% of worldwide citizens who say they have started a business in the past, 29% say they did so in the past year.
• But, among the 13% who have started an interest group in the past, 43% say they did so in the past year.

Entrepreneurs in India, South Africa, most Latam countries and Malaysia are most likely to split their aspirations between wanting to start both a business and an interest group.

This reflects the reality of who current and likely entrepreneurs are as people – they are much more likely than non-entrepreneurs to be participating/active in society generally.

“Those interested in supporting and facilitating business entrepreneurialism will need to widen their scope to include a growing interest in social entrepreneurialism,” Mike Colledge, President Ipsos Public Affairs Canada notes. "Successful promotion of business entrepreneurship among citizens must also include a recognition of the increasing importance of socio-political issues to entrepreneurs.”

“These are great findings, showing that the entrepreneurial spirit in South Africa is alive and well”, says Mari Harris, Director and Political Analyst at Ipsos South Africa. “Small and medium businesses have the potential to help address the daunting issue of job creation very effectively, but they need the government to remove barriers and red tape and other businesses and financial institutions to play a bigger role in enabling smaller businesses with knowledge and investment.”

Even though it is encouraging to know that South Africans have such a high entrepreneurial spirit, it is important to understand the challenges that these Entrepreneurs face within their businesses and how organisations can help Entrepreneurs to overcome those. To learn more about this, take a look at the Ipsos South Africa study of small and medium businesses in 2020: SMME’s – Understanding the impact of Covid-19. To talk about these results and the importance of the sector for the SA economy, please contact Elzette Correia.

Technical Detail:

• These are the findings of a 28-country Ipsos survey conducted between November 20and December 4,2020 among 20,504adults aged 18-74 in the United States, Canada, Malaysia, South Africa, and Turkey and 16-74 in 23other countries, via Ipsos’ Global Advisor online survey platform.
• Each country’s sample consists of 1000+ individuals in Australia, Belgium, Brazil, Canada, China (mainland), France, Germany, Great Britain, Italy, Japan, Spain, and the United States, and 500+ individuals in Argentina, Chile, Colombia, Hungary, India, Malaysia, Mexico, the Netherlands, Peru, Poland, Russia, Saudi Arabia, South Africa, South Korea, Sweden, and Turkey.