The success of the United Nations Sustainable Development Goals (SDGs) is crucial for the global economy and society, which is why we ask our entrepreneurs if they are aware of them.
Iva Gumnishka certainly is. Her company Humans in the Loop is actively addressing Goal #1 (No Poverty), Goal #8 (Decent Work and Economic Growth) and Goal #10 (Reduced Inequalities).
In 2017, Iva was studying human rights in the United States when she learned about a social entrepreneur providing jobs for local youth.
She began wondering if she could use social entrepreneurship to support refugees in her home country. Said Gumnishka:
“That entrepreneur was super inspiring for me.
After graduating, I came back and started working as a volunteer in a refugee camp here in Bulgaria.”
Soon after, she founded Humans in the Loop.
“We started with classes to help people get jobs in places like call centres. Many are unable to get such jobs because they don’t have the skills. The goal was to find an easy job that anyone can do so that they can start earning money immediately.”
A universal challenge across the artificial intelligence industry is that AI systems are only as good as the data used to train them. Without the right human oversight, systems can learn a distorted version of the world, and the resulting inaccuracies can harm the people they are intended to serve.
“For these systems to learn to recognize objects and images, you need to show them examples that are generated by humans.”
The idea of making a connection between this and the refugee crisis came from the company’s first client and a friend in the AI field. After a successful pilot, the company began training refugees to become the “humans in the loop”, monitoring the AI data sets used to build algorithms. Humans in the Loop has since evolved into a hybrid organization which includes the original job-providing entity and a foundation that provides training and career counselling. Local teams train and support the company’s workforce.
“This is a much better practice compared to crowdsourcing marketplaces [which are typical for the industry] as it can guarantee the quality and consistency of data. To train AI systems, you need to test and verify them with human supervision and monitoring. This is the opportunity that we’re using to generate work for people who are affected by conflict.”
HUMAN FACES BEHIND THE DATA . . .
Thank you to the Cartier Women’s Initiative, one of our report sponsors, for providing this material and helping to put our data in a real-world context.
A related question is whether, compared to one year ago, the new entrepreneur expected business growth to be lower. Figure 7.2 shows that the proportion of those starting or running a new business whose expectations for business growth were somewhat lower, or much lower, than a year ago, ranged from less than one in 10 (Thailand) to more than seven in 10 (Iran) in
Level C; from just over one in 10 (Slovak Republic) to four in 10 (Estonia) in Level B; and from one in 10 (Saudi Arabia) to six in 10 (Republic of Korea) in Level A. So, except for the Republic of Korea, there were lower growth expectations in relatively few Level B and A economies and much more variability in those growth expectations in Level C.
7.3 DID THE COVID-19 PANDEMIC CREATE NEW OPPORTUNITIES?
The GEM Adult Population Survey (APS) asked those starting or running a new business whether the COVID pandemic had provided new opportunities that they wish to pursue.
Established Business Owners were asked a slightly different question: whether the pandemic had led to new opportunities that are currently being pursued. It may be easier to wish to pursue opportunities than to actually do so.
Results from both questions are illustrated side by side in Figure 7.3. Starting with new entrepreneurs, there were 12 economies with one in two or more agreeing that the pandemic has led to new opportunities that they wish to pursue
(five from Level C, three from Level B and four from Level A), compared to nine in which less than one in three agreed (three from Level C, four from Level B and two from Level A). The highest levels of agreement were in India, Brazil and Chile, and the lowest, by far, in the Republic of Korea and in Hungary.
The picture for Established Business Owners currently pursuing pandemic opportunities was surprisingly similar, if scaled a little lower. There were just eight economies in which one in two or more were pursuing pandemic opportunities, and 23 were less than one in three was doing the same.
The highest levels were again in India and Saudi
FIGURE 7.3 The percentage of Total early-stage Entrepreneurial Activity (TEA) who agree that the pandemic has led to new opportunities they wish to pursue and the percentage of Established Business Ownership (EBO) who are pursuing such opportunities Source: GEM Adult Population Survey 2023
% of TEA/EBO
0 10 20 30 40 50 60 70 80
Morocco Iran Jordan Colombia Ecuador China South Africa Guatemala Mexico Thailand Venezuela Brazil India Hungary Slovak Republic Estonia Greece Croatia Poland Cyprus Oman Spain Romania Uruguay Latvia Lithuania Israel Panama Puerto Rico Chile Republic of Korea Norway Switzerland Sweden Italy France Netherlands Slovenia Qatar Germany Luxembourg United States United Kingdom Canada Saudi Arabia
Total early-stage Entrepreneurial Activity (TEA) Established Business Ownership (EBO)
Level B
Level C Level A
Arabia, and the lowest in the Republic of Korea and Hungary.
There are 40 economies in which this question was asked in both 2022 and 2023. Given that the COVID pandemic had fallen from the headlines, the reasonable expectation may have been that the proportion pursuing, or wishing to pursue, pandemic-led opportunities had declined. The experience was much less clear-cut. In 21 of those 40 economies, the proportion of new entrepreneurs wishing to pursue opportunities due to the pandemic had increased, and in 19 it had fallen. This looks like minor change, but in many of these economies the differences were large. For example, in 2022, just 9% of new entrepreneurs in the Slovak Republic had agreed the pandemic had led to new opportunities they wished to pursue; by 2023, this was 25%. In
nearby Slovenia, the increase was from 9% to 43%, and in distant Saudi Arabia from 15% to 64%. There were similar large falls: in Iran from 62% to 26%, in the Republic of Korea from 50% to 6%, and in China from 84% to 39%.
The pattern for Established Business Owners was closer to expectations. In 26 of the 40
economies, the proportion of Established Business Owners agreeing they were currently pursuing pandemic-led opportunities decreased from 2022 and increased in just 14 economies. Once more, some of the shifts were large. In nine economies that proportion at least halved,23 while in another five economies that proportion at least doubled.24 So, overall, fewer Established Business Owners were pursuing pandemic-led opportunities in 2023 than in 2022, but there was minor change in relation to new entrepreneurs.
7.4 ARE ENTREPRENEURS READY FOR THE FUTURE?
Most people starting or running new businesses, or owning established businesses, are likely to consider themselves ready to face the future.
Indeed, the very act of starting a business is a statement of faith in the future.
One way to assess that readiness is to look at expectations in a turbulent environment. A key feature of the recent past has been the rapid rise in the use of digital technologies to sell products and services. In the 2023 GEM APS, both new and established entrepreneurs were asked whether, in the next six months, they expected their business to use more digital technologies to sell their products. The proportions responding yes, for both new and established businesses, are shown in Figure 7.4.
There was wide variation, both for those starting new businesses and for those owning established businesses. For new entrepreneurs, the proportion ranged from three in 10 (China) to nine in 10 (Brazil) in Level C, from two in 10 (Lithuania) to eight in 10 (Puerto Rico) in Level B, and from one in 10 (Republic of Korea) to eight in 10 (Saudi Arabia) in Level A. Results for Established Business Owners were broadly similar. In group C, two in ten were expecting to use more digital technology to sell in Iran compared to eight in ten in Brazil. Group B ranged from one in 10 in Lithuania to seven in 10 in Brazil. For group A, there was one in 10 from the Republic of Korea and eight in 10 in Saudi Arabia.
If digital technology was first adopted by new businesses in high-income economies, there is some evidence that low-income economies are fast catching up.25
Lithuania and the Republic of Korea had few (one in five or less) new or established businesses expecting to use more digital technologies in the next six months to sell their products, whereas Brazil, Venezuela and Saudi Arabia each had three in four or more. This may simply mean that levels in the Republic of Korea and Lithuania are high already. Another interesting feature of Figure 7.4 is that, in 41 of 45 economies, the proportion of new entrepreneurs expecting to use more digital technologies exceeded the corresponding proportion of Established Business Owners in that economy. The exceptions were all in Asia (China, Oman, Saudi Arabia and the Korean Republic).
This may reflect the fact that, as seen in Chapter 6, younger people are more likely to be starting new businesses than owning established ones, as are graduates.
23 Morocco, Iran, China, Hungary, Greece, Spain, Republic of Korea, United States and United Kingdom.
24 South Africa, Slovak Republic, Venezuela, Slovenia and Saudi Arabia.
25 Tolba, A., Karadeniz, E., Boutaleb, F., Bouhaddioui, C., Menipaz, E., Pereira, F., Bueno, Y., Alsaeed, M., &
Schøtt, T., “Exports during the pandemic: Enhanced by digitalization”, Small Enterprise Research, 29(3):
308–27.