Brazil ranks second in terms of number of entrepreneurs among the G-20 nations, a group comprising the world’s twenty largest economies, and 15.3% of the country’s population have their own business, a rate second only to China’s. Out of all entrepreneurs in the country, 53% are women and 47% are men.
Among new businesses in the country, 52.5% are headed by youths aged 18 to 34. In 2008, the rate of entrepreneurship among the Brazilian population was 12%.
The data were culled from the Global Entrepreneurship Monitor (GEM) survey, which covers 54 countries and was disclosed April 6 at a press conference in the city of São Paulo.
The GEM is coordinated by the Global Entrepreneurship Research Association (GERA) – an organization directed by the London School of Economics and by the Babason College, in the United States, and by representatives of the countries in the survey.
In Brazil, the project is headed by the Brazilian Quality and Productivity Institute (IBPQ) with support from the Brazilian Micro and Small Business Support Service (Sebrae) and from industrial sector organizations.
The survey concerns 2009 and shows significant increase in the number of Brazilians who become entrepreneurs out of opportunity (9.4%) in comparison with those who start their own business out of necessity (5.9%).
According to Simara Greco, coordinator of the GEM survey, the increased number of enterprises established out of opportunity is due to the high rate of growth in the number of start-up enterprises (with up to three months of existence). Start-up enterprises have gone from 2.93% of the total in 2008 to 5.78% in 2009, of which 4.3% are enterprises out of opportunity.
Among the Arabs, the number of entrepreneurs who started out of opportunity is much higher than in Brazil. In the United Arab Emirates, for instance, they account for 91% of new business owners. In Saudi Arabia, where 4.7% of the population consists of entrepreneurs (8th among the G-20 countries), 88% are in the “opportunity” category.
When it comes to foreign trade, 89.5% of Brazilian entrepreneurs claimed that they do not plan on exporting. Paulo Okamoto, president of the Sebrae, considers that this is not a good scenario for the country and claims that action is needed for Brazilian companies to internationalize themselves.
“It is desirable for Brazil to have more companies aiming to export. For such, we need to foster innovation and we need more sophisticated, higher quality products. The Sebrae is also developing programs in order to provide ongoing support to exporting companies. Our idea is to open offices in the main regions of the country, where people may be advised with regard to meeting the minimum requirements, so that theirs qualify as exporting companies, and are thus able to reach the international market,” he asserted.
According to Okamoto, there are now roughly 15,000 small businesses that already export, and the goal for 2010 is to increase that figure by 10%.
The lack of innovation of Brazilian entrepreneurs was one of the most emphasized points during the event. The survey indicates that only 5.4% of start-up entrepreneurs believe that their products are considered new.
To Okamoto, it is important for Brazilian entrepreneurs to start focusing more on the creation of new products. “We must establish companies that add more value to their products and services. This is how you secure the domestic market and create the necessary conditions to export.”
The executive points to a combination of lack of interest from entrepreneurs and lack of innovation-oriented financing from government organizations as the main obstacle to the spread of innovation among Brazilian companies.
For the first time in the ten years in which the GEM survey is conducted in Brazil, the number of women has exceeded the rate of male entrepreneurs. The rate of young entrepreneurs, in turn, has remained steady, showing that most Brazilian entrepreneurs are aged 18 to 34.
One example of young, female entrepreneurship is businesswoman Vanessa Carmona, currently 36 years old, who established her business at age 23. With lots of creativity and work, Vanessa and her partner Flávia Almeida, then aged 32, opened the Mulata Brasil beachwear store, and turned a start-up capital of 5,000 Brazilian reals (US$ 2,800) into revenues currently exceeding 1.4 million reals (US$ 796,000).
The brand, which started out in a small 57-square-metre house, now has two shops in a weatlhy area of São Paulo. Despite never having exported, it should open its first unit abroad in the first half of 2010, in Miami, United States.
According to Vanessa, she realized that her business had thrived when, in 2000, customers formed a line at her door telling them that “they should look for a larger place, because that one was no longer big enough.”
To her, the important thing for those willing to be entrepreneurs is not being afraid of chasing one’s dream. “The government offers several lines of financing and credit that will help you get started with your dream, all that it takes is to go for it. Necessity and willpower together will do the trick,” she advises.