Nearly 20% of Entrepreneurs Work with Family Members
According to the 2018 Global Entrepreneurship Monitor (GEM) Report, nearly 20 percent of the world’s entrepreneurs are working with family members.
The report, sponsored by Babson College, Universidad Del Desarrollo and Korea Entrepreneurship Foundation, also stated that 6 percent of individuals aged between 18-64 in 27 countries are part of the gig economy and the sharing economy.
“The Global Entrepreneurship Monitor Global Report shows that the global economy nourishes entrepreneurs of all kinds,” said coauthor and Utrecht University Entrepreneurship Associate Professor Niels Bosma. “There is a lot of media attention for innovative startups; however, entrepreneurial employees, family business entrepreneurs and small-scale established entrepreneurs also play a key role in national and local economies. This year, GEM results also confirmed that entrepreneurial activity in the gig and sharing economy is substantial in all parts of the world.”
Added coauthor and Babson College Entrepreneurship Professor Donna Kelley, “It might not be a surprise that many businesses are family owned, particularly when we see them every day in our communities and read about large family-owned corporations in the news. Nevertheless, to our knowledge, this is the first global study of family involvement in the startup phase. The results illustrate the extent entrepreneurs rely on family members to get their businesses off the ground.”
GEM highlights included:
- Nearly 1 in 5 entrepreneurs are starting businesses that will be owned and/or managed with family members, in the 47 economies assessing family business activity. Colombia, the United Arab Emirates, and Uruguay reports the highest level of family-based entrepreneurship, accounting for over one-third of entrepreneurs.
- The highest rate of involvement in gig/sharing economy activities, measured in 27 economies, is in the Republic of Korea (over 20 percent of the adult population). Israel, Chile, Ireland and the United States also report high rates of involvement in the gig and sharing economy, with over 10 percent of the adult population engaging in these activities. This new international comparison shows that involvement in gig/sharing economy activity is significant across the globe.
- GEM has introduced a composite index, the National Entrepreneurship Context Index, which assesses the environment for entrepreneurship in an economy. The NECI is derived from the 12 framework conditions and weights the ratings on these conditions by the importance experts place on them. Qatar, a high-income country in the Middle East, receives the highest NECI ranking, following by Indonesia and Netherlands. An examination of the top-ranked economies illustrates the importance of having healthy conditions across all aspects of the environment affecting entrepreneurship. The NECI results in this report represent an inaugural effort to inform policy, practitioner, and other key stakeholder audiences, about the strength of their overall environment for entrepreneurship.
- Technology vs Wholesale/Retail: In every low-income economy, wholesale/retail businesses account for more than half of their entrepreneurs. In contrast, in half of the high-income economies, nearly 50 percent or more of the startup activity is in service or technology industries.
- The report examines societal attitudes about entrepreneurship, which can indicate the extent there are potential entrepreneurs and support for this activity. In three countries in Europe (Netherlands, Poland and Sweden) about three-fourths of adults state it is easy to start a business in their countries, the highest of the 49 economies studied. In Netherlands and Poland, in addition to Turkey, Thailand, Guatemala and Madagascar, over 80 percent of people think entrepreneurship is a good choice of career. Thailand also shows the highest level of media attention for entrepreneurs with 87 percent of adults stating that entrepreneurs are represented positively in the media. In Sweden, 82 percent of adults believe there are many opportunities around them for starting businesses, the highest level across the entire sample.
To read the full report, click here.
