MIEPEEC, Morocco
1. PNEE
MIEPEEC is currently in charge of formulating Morocco’s new National Employment and Entrepre- neurship Policy (PNEE) for 2035, with its key objectives of increasing employment and incomes, raising the activity rate of women, extending social security, and reducing the weight of the informal economy.
2. The Awrach Program
The Awrach Program aims to create 250,000 jobs between 2022 and 2024 in the form of “work or temporary contracts” entered into by civil society, cooperatives and entrepreneurs. Support for sustainable integration is an important part of the program. It includes an employment support bonus for companies for each employee recruited for at least one year. This financial support is a key component of this national program and is aimed at jobseekers, including those without qualifications.
3. The Ana Moukawil Program
The Ana Moukawil educational program aims to support entrepreneurs in starting up, maintaining
and developing resilient businesses through a structured, innovative and inclusive outreach approach. Targeting 100,000 entrepreneurs by 2026, it offers specific pathways to project leaders, self-entrepreneurs, informal economic units and very small businesses.
This integrated program comprises several areas of intervention tailored to each target/course: guidance, advice, support, matchmaking, incentives, etc. This is made possible thanks to a reinforced network of specialized entrepreneurial support advisors (CSAE), a filtered network of external support structures (SAE) and a rich portfolio of national and international partnerships.
One of its innovations is its digital dimension: it will be delivered in blended learning featuring a face-to-face offer (individual and group), a synchronous online offering and an asynchronous online offering.
THE REAL WORLD BEHIND THE
DATA . . .
Thank you to MIEPEEC, one of our report sponsors, for providing this material and helping to put our data in a real-world context.
I
KINGDOM OF MOROCCO
MINISTRY OF ECONOMIC INCLUSION, SMALL BUSINESS, EMPLOYMENT AND SKILLS
Younes Sekkouri, Minister for Economic Inclusion, Small Businesses, Employment and Skills
4.5 WHICH SECTORS ARE THE NEW BUSINESSES IN?
The choice of sector for a new business is important, and not just to the new business owner. New businesses help to shift resources as new sectors emerge and old ones decline, with new firms supplying goods and services that people or businesses want, replacing those businesses that may have been slow to respond to changing tastes.
For the person determined to start their own business, the easiest sectors to enter are those that require little capital or specialist knowledge.
Unfortunately, this ease of entry comes at a price:
any such sector is likely to be fiercely competitive, driving prices, and therefore margins, down, and making it difficult to sustain the competitive edge necessary for the new business to persist.
These highly competitive sectors include personal services such as taxi driving, cleaning or delivering, as well as retailing or selling fast food. Products and services that require specialist inputs, such as highly developed skills like coding or content creation, are much more difficult to duplicate, and so are much more likely to retain good margins into the future. Easy-entry sectors are typically in Consumer Services, while
Business Services are usually more difficult to enter.
The GEM APS asks those starting or running new businesses to describe their business. Based on this information, the business is allocated to one of four broad sectors: Extractive (agriculture, mining); Transformative (manufacturing and logistics); Business Services (information technology, professional services) or Consumer Services (retailing, hotels and restaurants, and personal services). Of the economies participating in GEM in 2023, only four had one in three or more of their new businesses outside of the Consumer and Business Services sectors (Mexico, Uruguay, Romania and Hungary), usually reflecting specific resources in that economy such as mining, refining or agriculture.
Figure 4.5 shows the proportion of new businesses by economy in the Consumer Services and Business Services sectors, and illustrates a clear relationship with income level, with the share of Consumer Services typically declining with income level while the share of Business Services usually rises. For example, Consumer Services account for more than two out of
FIGURE 4.5 Business Services and Consumer Services (% TEA) Source: GEM Adult Population Survey 2023
% of adults 18–64
0 10 20 30 40 50 60 70 80 90 100
India South Africa Ecuador Colombia Venezuela Guatemala Thailand Morocco Jordan Mexico China Brazil Iran Oman Uruguay Panama Romania Chile Puerto Rico Poland Latvia Greece Estonia Cyprus Hungary Lithuania Slovak Republic Croatia Spain Israel Saudi Arabia Republic of Korea United States Qatar Netherlands Italy United Kingdom Luxembourg Canada Sweden Slovenia Germany France Norway Switzerland
Business-oriented services Consumer-oriented services
Level B
Level C Level A
three new businesses in 10 out of 13 Level C economies, and only one out of 32 Level B and Level A economies (Saudi Arabia). Of the Level C economies, only Iran has less than half of its new businesses in Consumer Services, compared to 11 out of the 22 Level B or Level A economies.
Turning to Business Services, only Iran and Brazil in the Level C economies group have more
than one in 10 of adults starting or running new business in the Business Services sector, while of the Level A or B economies only three (Uruguay, Oman and Saudi Arabia) have less than one in ten starting in Business Services. The highest proportions of Business Services startups, at more than one in three, are in Croatia, Spain, Israel, Norway and Switzerland.
4.6 WHAT ARE THE POLICY IMPLICATIONS OF THIS CHAPTER?
Early-stage entrepreneurial activity levels in 2023 were highest in four Latin America & Caribbean economies (Guatemala, Ecuador, Chile and Panama), each with more than three out of 10 adults starting or running new businesses. Early- stage entrepreneurial activity levels were lowest in five European economies plus Morocco and China, all from Levels B or C.
This chapter pointed to five economies, all in the Latin America & Caribbean region, with five or more people starting new businesses for every person owning an established business.
Economies with such disproportionate numbers need to consider carefully what obstacles are preventing new businesses from becoming established, and then overcome these. This is important if they want to realize the economic stability and employment that those new businesses could bring by surviving into maturity. Such scaling-up of new business
is key in meeting the UN SDGs (SDG 8 and SDG 9) and is duly recognized as a priority among G20 nations in their recent Startup20 policy paper.
There are also a small number of economies in which few people are starting new businesses relative to those owning established businesses.
These economies need to consider carefully how to encourage new startups, or else face the very real prospects of their stock of businesses declining.
Less-well-off economies tend to have high proportions of their new businesses in the Consumer Services sectors, an understandable situation that may not be in the long-term interests of either the individuals starting those businesses or their overall economies.
Encouraging new startups in the Business Services sectors could facilitate structural change in those economies.
The Social and
Economic Impacts of Entrepreneurship
Stephen Hill and Maribel Guerrero
5.1 WHAT DETERMINES THE IMPACT OF NEW STARTS?
This report has already noted that new businesses can bring change. This manifests in new ideas, which are embodied in new products or services.
Some of these innovations may address needs we were not aware of. Additionally, new businesses bring change by adopting new processes or technologies. They also open up new sectors or markets, accelerating the closure of old ones. This closure often occurs by introducing ideas from elsewhere, rather than entirely novel concepts.
Not every new business is a disruptor, bent on changing the world: some may exit as quickly as they arrived, others simply replace existing businesses, yet more employ no one but the owner, and often never will (the so-called “solo entrepreneurs”). These will impact in different ways and to different levels. An important question, then, is: “What will be the impacts of a particular new business?”
The simple answer is that we cannot know, but there are several current attitudes and perceptions that we do know and which make significant impacts more likely. The impacts of the new business will be determined by its growth trajectory in terms of size and scope, as measured by outputs, turnover, jobs and value- added, each depending on the sector chosen and on the potential demand for any new product or service, how that new business interacts with
local suppliers, whether its sales are local or international, etc.
So, while the impact of the new business cannot be known or measured, there are a number of personal and organizational factors that are likely to influence economic impact.
One is the current employment level and job growth expectations of the new business. While expecting to grow is an important precursor to organic growth, just as not expecting to grow is liable to be self-fulfilling, the current employment level of the new business shows jobs already created. Another is the level of innovativeness in terms of new products and processes. A third is the scope of the business’s customers, whether they are local, national or international. All of these are assessed in the GEM Adult Population Survey (APS).
Nor is all impact economic. Many new
businesses are focused on social or environmental objectives, such as creating jobs and income for disadvantaged groups, providing recycling facilities or improving local air quality. Many of these impacts are reflected in the United Nations Sustainable Development Goals (SDGs), so this chapter will also look at whether those starting new businesses are doing so in pursuit of the SDGs.
5.2 HOW MANY PEOPLE WILL THE NEW BUSINESS EMPLOY?
Individuals starting new businesses and expecting to employ many people in the future are likely to have much more impact than those who expect to employ nobody but the founder.
The APS asks those starting or running new businesses how many people they expect to employ in five years’ time. The results are shown in Figure 5.1.
5
5
The lowest job growth expectations (in terms of percentage of adults) were in Ecuador, where one in five adults was starting or running a new business and expecting to employ no more people in five years’ time, and in Canada, where that proportion was one in 10. There were also three economies, Poland, Greece and the Republic of Korea, in which just one in 100 adults or less was starting or running a new business and expecting to employ no more people in five years’ time.
The highest job growth expectations (as a percentage of adults) were in the Latin America
& Caribbean region, home to eight of the 11 economies having more than one in 20 of their adults starting or running a new business and expecting to employ another six people or more in five years’ time. The others were Thailand, Saudi Arabia and Qatar, the latter two being the only Level A economies in this category.
Turning to those starting or running a new business, more than half were expecting to employ no more people in five years’ time in two Level C, five Level B and six Level A economies.
Hence the expectation of a new entrepreneur employing no more people increases with income group. In 29 of the 45 economies spread across
all income groups, less than one in four new entrepreneurs is expected to employ no more people in five years’ time.
The lowest shares of new entrepreneurs expecting to employ another six or more people in five years’ time were in India, Ecuador, Spain and Greece. At the same time, there were nine economies in which three in 10 new entrepreneurs or more expected to employ at least another six people, three from Level C (Mexico, Brazil and Thailand), four from Level B (Puerto Rico, the Slovak Republic, Latvia and Chile), and just Qatar and Saudi Arabia from Level A. In terms of job growth expectations, Latin America & Caribbean lead the way, although closely followed by two Gulf economies. Job expectations in Europe &
North America were typically much more modest.
The job growth expectation analysis showed interesting patterns. It may also be interesting to compare these job expectations to the current employment levels of new businesses: in other words, to know what proportion of new entrepreneurship represents “solo entrepreneurs”
(defined as one owner, no employees) and what currently represents “high jobs” (defined as five or more employees).
FIGURE 5.1 Job growth expectations among early-stage entrepreneurs expecting to employ 0, 1–5 or 6 more people in five years’
time (% adults) Source: GEM Adult Population Survey 2023
% of adults 18–64
0 5 10 15 20 25 30 35
Mexico China Morocco Iran South Africa Venezuela India Colombia Guatemala Jordan Brazil Thailand Ecuador Poland Romania Cyprus Greece Lithuania Puerto Rico Slovak Republic Spain Hungary Latvia Israel Estonia Croatia Panama Chile Oman Uruguay Republic of Korea Luxembourg Norway Slovenia Saudi Arabia Germany Qatar United States United Kingdom France Italy Sweden Switzerland Netherlands Canada
0 jobs 1–5 jobs 6+ jobs
Level B
Level C Level A
Not surprisingly, in Figure 5.2, the proportion of solo entrepreneurs usually exceeded that of those currently employing five or more people (except in Qatar and Saudi Arabia). There were eight economies, from all income groups, where more than one in two of those adults starting or running a new business were solo entrepreneurs, rising to 29 economies with two in five or more solo entrepreneurs. To be currently employing five or more was much less likely, accounting for less than one in 20 new entrepreneurs in 14 economies, again from all income groups, but reaching one in five or
more in Saudi Arabia, Qatar, China, Germany and Canada, and one in 10 or more in eight others.
Of the 13 economies with half or more of their new entrepreneurs expecting to employ no more people in five years’ time, all but three had at least two out of five solo entrepreneurs. The exceptions were Oman, the Netherlands and Canada.
Additionally, both Saudi Arabia and Qatar each had high proportions already employing five or more people, and high proportions expecting to employ at least another six people in five years’
time.
5.3 HOW INNOVATIVE ARE NEW BUSINESS PRODUCTS OR SERVICES?
This report has pointed to the ability of new businesses to bring in new ideas and ways of working, expressed in new products or services, or in the use of new technologies or processes. But in practice, how innovative are those starting new businesses? Are their new products totally unique (new to the world), or brought in from outside the country (new to the country), or from other parts of their own country (new to the area)?
The GEM APS addresses this issue by asking those starting or running a new business if any of their products, services, technologies or processes are new to their area, to their country or to the world. Results are shown in Figures 5.3 and 5.4.
Not surprisingly, totally new products or processes are very rare indeed.
In 37 out of 45 economies, less than one in 100 adults was starting or running a new business
FIGURE 5.2 The percentage of Total early-stage Entrepreneurial Activity (TEA) who are solo entrepreneurs (one owner, no employees) and those currently employing five or more people Source: GEM Adult Population Survey 2023
% of TEA
0 10 20 30 40 50 60 70
China South Africa Mexico Venezuela Jordan Morocco Colombia Thailand Iran Brazil Guatemala India Ecuador Greece Panama Cyprus Uruguay Oman Hungary Latvia Spain Poland Romania Croatia Puerto Rico Lithuania Chile Estonia Slovak Republic Israel Qatar Saudi Arabia Norway Netherlands Canada Luxembourg Switzerland Italy Germany United States Sweden France Republic of Korea Slovenia United Kingdom
Solo entrepreneur Currently has 5 or more employees
Level B
Level C Level A
producing goods and services that were new to the world. The highest level by far was in Chile, at just over 3%. Products or services new to the country were not quite as rare, but only reached 2% or more of adults in just four economies (Chile, Panama, Puerto Rico and Canada). Finally, new to the area was more common, but still exceeded 5% of adults in just nine economies (five Level C, three Level B and one Level A).
The results in Figure 5.3 are in terms of the percentage of adults starting or running a new business and introducing products or services that are new, at least to their area. It is useful to compare these results to the Total early-stage Entrepreneurial Activity (TEA) in each economy, or the total percentage of adults starting or running a new business in each economy. In eight economies (five Level C and three Level B), less than one in five of those starting or running a new business was doing so with a new product or service to the area, country or world. Only seven economies had two in five new entrepreneurs or more introducing new products or services (three Level A [Luxembourg, Italy and Sweden], two Level B [Chile and Panama] and two Level C [Mexico and Guatemala]).
Figure 5.4 presents similar results for new technologies or procedures. The share of adults starting or running a new business with technologies or processes that are new to the world exceeds one in a 100 in just five economies:
Chile, Panama, Cyprus, Canada and France.
Similarly, 12 economies (two from Level A and five each from Levels B and C) had less than one in five new entrepreneurs using new technologies or processes in their area, country or world. Only nine economies had two in five or more of their new entrepreneurs using new technologies or processes: three from Level A (Qatar, Luxembourg and Italy), three from Level B (Chile, Panama and Croatia) and three from Level C (Guatemala, Mexico and South Africa).
A small number of the same economies appear on the shortlists of both most innovative in terms of the proportion of new entrepreneurs introducing new products or services, and most innovative in terms of using new technologies or processes: Luxembourg, Italy, Chile, Panama and Mexico. These trends reveal that a high income level is not a necessary condition for entrepreneurial innovation, nor is low income necessarily a constraint.
FIGURE 5.3 The percentage of adults starting new businesses with products or services that are new to their area, country or the world
Source: GEM Adult Population Survey 2023
% of adults 18–64
0 2 4 6 8 10 12 14 16 18 20
Morocco China Iran Brazil Jordan India South Africa Venezuela Ecuador Colombia Mexico Thailand Guatemala Lithuania Poland Romania Greece Oman Israel Spain Slovak Republic Hungary Estonia Cyprus Latvia Croatia Puerto Rico Uruguay Panama Chile Republic of Korea Norway Slovenia Germany United Kingdom Switzerland Sweden Italy Luxembourg France Qatar Netherlands United States Saudi Arabia Canada
New to their area New to their country New to the world
Level B
Level C Level A
5.4 HOW COMPETITIVE ARE NEW BUSINESSES?
There are a number of ways to assess the competitiveness of a business: by its changes in market share, by the responsiveness of demand to changes in price, by the effects of price changes by one business on the sales of another, or by the unit labour costs of each. This kind of data cannot be derived from the responses in the APS; however, some inferences can be made from the replies to questions about the scope of a new business’s customers or whether that new business only had customers within their own local area, only within their own country or had international customers as well. Some care must be taken in interpreting these responses, because the definition of a local area may well depend on the size of the individual country: in relatively small countries like Cyprus or Qatar, local and national markets may be virtually synonymous.
Having customers beyond the local area is important in terms of impact because it brings money into the local economy, and because a diversified customer base increases resilience and reduces dependency on that local economy.
Figure 5.5 shows Total early-stage Entrepreneurial Activity (TEA) levels and businesses with local customers, only customers within their country or with customers outside their country. The percentage of adults in each category clearly depends on the level of TEA in each economy (the height of each column in Figure 5.5), as well as its distribution between the categories. There are five economies in which more than a quarter of adults were
FIGURE 5.4 The percentage of adults starting new businesses using technologies or processes that are new to their area, new to their country or new to the world Source: GEM Adult Population Survey 2023
% of adults 18–64
0 2 4 6 8 10 12 14 16 18 20
China Morocco Iran Jordan India Ecuador Brazil South Africa Venezuela Colombia Thailand Mexico Guatemala Lithuania Poland Romania Oman Greece Israel Spain Estonia Hungary Latvia Slovak Republic Cyprus Croatia Puerto Rico Uruguay Panama Chile Norway Republic of Korea Slovenia Germany United Kingdom Switzerland Sweden France Italy Luxembourg United States Netherlands Qatar Saudi Arabia Canada
New to their area New to their country New to the world
Level B
Level C Level A
A number of the targets under UN SDG #9 – Build
resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation – relate to the themes of competitiveness and innovation described in this chapter.