ENVIRONMENTAL IMPACTS, OR MAXIMIZING THEIR SOCIAL IMPACTS?
8.2 WHY START A BUSINESS?
In 2019, GEM updated its approach to motivation, surveying new business founders on specific reasons for starting a business. These motivations include making a difference, achieving
substantial wealth, continuing a family tradition, and earning a living due to job scarcity.
The desire for autonomy was not included, since pre-testing showed that almost everyone agreed with this motivation. Those starting or running a new business select from a five-point scale (strongly agree, somewhat agree, neither agree nor disagree, somewhat disagree and strongly disagree), and can choose one or more of these motivations (and many do choose more than one). The results for 2023 are set out in Figures 8.1 and 8.2.
There is wide variation in the proportion of adults starting or running a new business who agree30 with the motivation “to make a difference in the world” (Figure 8.1), from just one in 25 new entrepreneurs in the Republic of Korea (by far the lowest), to more than four out of five in India.
This wide variation was evident across all income groups. Less than two in five new entrepreneurs agree in four Level C, nine in Level B and four Level A economies, while more than three in five agree in six Level C, three Level B and three Level A economies.
30 “Agree” includes those who selected “strongly agree”
or “somewhat agree”.
8
8
FIGURE 8.1 Agreement with motivations “to make a difference in the world” and “to build great wealth or very high income” (% Total early-stage Entrepreneurial Activity [TEA])
Source: GEM Adult Population Survey 2023
FIGURE 8.2 Agreement with motivations “to continue a family tradition” and “to earn a living because jobs are scarce” (% Total early-stage Entrepreneurial Activity [TEA])
Source: GEM Adult Population Survey 2023
% of TEA
0 10 20 30 40 50 60 70 80 90 100
China Morocco Jordan Iran Ecuador Colombia Thailand South Africa Mexico Venezuela Brazil Guatemala India Poland Greece Estonia Croatia Slovak Republic Spain Israel Cyprus Uruguay Oman Lithuania Latvia Hungary Chile Romania Panama Puerto Rico Republic of Korea France Italy Norway Sweden Netherlands Qatar Germany Luxembourg Switzerland Slovenia United Kingdom Canada United States Saudi Arabia
“To make a difference in the world” “To build great wealth or very high income”
Level B
Level C Level A
% of TEA
0 10 20 30 40 50 60 70 80 90 100
Iran Morocco Jordan China Colombia Brazil Ecuador South Africa Guatemala Venezuela Mexico Thailand India Poland Estonia Spain Lithuania Israel Slovak Republic Croatia Cyprus Chile Latvia Hungary Puerto Rico Uruguay Greece Romania Oman Panama Republic of Korea Switzerland France Norway United Kingdom Netherlands Sweden Slovenia Germany Italy Luxembourg United States Qatar Canada Saudi Arabia
“To continue a family tradition” “To earn a living because jobs are scarce”
Level B
Level C Level A
There was less variation, but more association with income, for the motivation “to build great wealth or very high income” (Figure 8.1). Over three out of four new entrepreneurs agreed in four Level C economies, and three each in Level B and Level A. However, less than one in two new entrepreneurs agreed in two Level C, six Level B and five Level A economies. Within Level C economies, agreement ranged from 40%
in Ecuador to 95% in Iran, in Level B from 37% in Spain to 85% in Cyprus, and in Level A from 34%
in Norway to 91% in Saudi Arabia.
In previous Global Reports, the motivation
“to continue a family tradition” was especially important in a minority of economies, and this is confirmed in 2023, with more than one in two entrepreneurs agreeing in just seven economies,31 all outside Europe (Figure 8.2). In 35 of the 45 economies, less than two in five agreed with this motivation (six Level C, 16 Level B and 13 Level A).
The motivation “to earn a living because jobs are scarce” was more popular, especially in the Level C and Level B economies, with the lowest levels of agreement, at less than three in 10 new entrepreneurs, in just three economies: Republic of Korea, Norway and Sweden, all from Level A.
Conversely, this motivation was agreed by four out of five new entrepreneurs or more in nine Level C economies, three Level B economies and one Level A economy. Agreement with the motivations to make a difference or to accumulate great wealth hardly varies by income group. But to build great wealth and to continue a family tradition are more popular in lower-income economies.
Previous Global Reports have looked at variations between men and women in motivation among new entrepreneurs (GEM Global Report 2019/2020), and between younger and older entrepreneurs (GEM Global Report 2021/2022).
Women and younger entrepreneurs were more likely to agree with the motivation “to make a difference in the world”, men were more likely to agree with “building great wealth or high income”
or “to continue a family tradition”, while older entrepreneurs were more likely to agree with
“earning a living because jobs are scarce”.
This report examines motivational differences according to levels of educational attainment.
Table 8.1. shows the number of economies in which the proportion of graduate new entrepreneurs agreeing with the motivation exceeded the proportion of non-graduates.
For the motivation “to make a difference in the world”, there are 23 economies in which
We survey new business founders on specific reasons for starting a business. One of these motivations includes
“making a difference in the world”. There is wide variation in the proportion of adults starting or running a new business who agree with this motivation. Noteworthy is that in India, four out of five agreed.
Making a difference in the world has various connotations for different people. In all likelihood, these motivations can align to one or more of the 17 SDGs.
SDG FOCUS . . .
TABLE 8.1 Motivation by educational attainment: number of economies with the proportion of graduates agreeing with the motivation exceeding the proportion of non-graduates, and vice versa Source: GEM Adult Population Survey 2023
Motivation
Out of 45 Grad > Non-grad
Out of 45 Non-grad > grad
“to make a difference in the world” 23 22
difference > 5 percentage points 15 7
“to build great wealth or very high income” 21 24
difference > 5 percentage points 11 15
“to continue a family tradition” 6 39
difference > 5 percentage points 4 27
“to earn a living because jobs are scarce” 11 34
difference > 5 percentage points 4 26
31 Thailand, India, Saudi Arabia, Mexico, Venezuela, Guatemala, and Panama.
Lily Dempster (Australia)
Cartier Women’s Initiative 2023 Fellow