PARIS - Policies for Inclusive Entrepreneurship and Self-Employment
The Missing Entrepreneurs 2023 is the seventh edition in a series of biennial reports examining how government policies can release untapped entrepreneurial potential from under-represented parts of the population of impactful entrepreneurs, including women, youth, seniors, the unemployed, immigrants and people with disabilities.
It offers comparative data on the entrepreneurship activities and the barriers faced by each group across OECD and European Union countries.
It takes a deep dive into the effectiveness of youth entrepreneurship schemes and the design of welfare bridge schemes for business creation by job seekers. It also contains country profiles for each of the 27 EU Member States showing the major recent trends in diversity in entrepreneurship and the current state and evolution of policy for each country.
The changing face of entrepreneurshipThe profile of entrepreneurs is becoming more diverse in the European Union (EU) and OECD. However, this shift has been slow overall, and there is a long way to go before the population of entrepreneurs fully reflects the diversity of the wider population.One of the most significant shifts over the past decade has been the growth in the scale and impact of immigrant entrepreneurship. This is clearly visible in the EU, where the share of self-employed workers born in another country nearly doubled over the past ten years from less than 7% in 2013 to 12% in 2022.Driven by a growth in cross-border migration flows, this growth in immigrant entrepreneurship is often viewed as having a positive impact on economies.
For example, in Sweden, new research shows that immigrant-owned firms are more likely to employ others and have more employees than native-owned firms, while in Germany, immigrant-owned businesses are more likely to achieve high levels of growth than firms led by non-immigrants. Moreover, 60% of German unicorns (i.e. businesses valued at more than USD 1 billion) have at least one immigrant founder.Another trend has been the continued, but slow, progress in reducing gender gaps in entrepreneurship.
It is clear that the COVID-19 pandemic had a disproportionate impact on women-led businesses in 2020-21, largely due to sector effects. However, the number of self-employed women has since bounced back to pre COVID-19 levels, while the number of self-employed men has not. The result is a return to the long-term trend of a slow reduction in the gender gap, at least in terms of the numbers of entrepreneurs.
Men were 1.84 times more likely to be self-employed than women in the EU in 2013 and this closed marginally to 1.76 times in 2019 (pre COVID-19) to 1.72 times in 2022. However, surveys show that women entrepreneurs are still less likely to be operating growth-oriented businesses. Over the period 2018-22, only 6% of female entrepreneurs in the EU and 11% in the OECD reported that they expect their business to create at least 19 jobs over the next five years relative to 12% of men in the EU and 16% in the OECD.
The millions of “missing” entrepreneurs
Entrepreneurship and self-employment rates vary across the population. For example, women are less active than men in starting and managing new businesses.
About 6% of women in the EU and 9% of women in OECD countries were actively working on a start-up or managing a new business (i.e. less than 42 months old) over the period 2018-22 relative to 8% of men in the EU and 11% of men in OECD.There are also significant differences in these rates by age and place of birth.
These gaps are due to a range of factors, including differences in motivations, own resources (e.g. skills, finance, networks) and access to external resources, which affect both business creation and growth. Other important influences on entrepreneurship gaps include social attitudes towards work and entrepreneurship, local labour market conditions and opportunities in employment, as well as the uneven impact of start-up policies and business regulations (e.g. requirement to file business taxes online).
One way to demonstrate the scale of entrepreneurship gaps is to estimate the number of “missing” entrepreneurs. There would be 7.5 million more entrepreneurs in the EU and 34.1 million more in the OECD if everyonewas as active in business creation as 30-49 year old men, which is the cohort who is most often identified as the most active in business creation and most likely to create sustainable businesses. The number of “missing” entrepreneurs is equivalent to 44% of actual entrepreneurs in the EU and 34% in the OECD, with significant gaps in many demographic groups, such as women and the young.
For the full report, visit: https://www.oecd-ilibrary.org/docserver/230efc78-en.pdf?expires=1701551361&id=id&accname=guest&checksum=79619E0A8C234DEDC0C89C1C39C98193