Brazil Top 10 in Entrepreneurship. 13% of Brazilians Have Own Business

Brazilian business

In 2007, Brazil has come closer to the main countries in entrepreneurship in
the world, rising from the 10th to the 9th position. This is shown in a new
study by the Global Entrepreneurship Monitor (GEM), which measures the rates of
global entrepreneurship.

The total entrepreneurial activity index (TEA) in the country grew from the 11.6% registered in 2006 to 12.72% in 2007, the equivalent to 15 million enterprises. The figures in the study were disclosed Wednesday, March 19, by the Brazilian Institute of Quality and Productivity (IBQP), at the offices of the Institute of Capital Markets (Ibmec), in São Paulo.


Although Brazil only rose one position, this growth is extremely expressive when observing that in this edition five new countries came into the list: Kazakhstan, Puerto Rico, the Dominican Republic, Romania and Serbia.


“As the entrepreneurship rate in each country is calculated individually, the inclusion of countries in the GEM research tends to change the positions or the other countries in the world ranking,” explained Marcelo Néri, a professor at Getúlio Vargas Foundation – Rio de Janeiro (FGV/RJ) and one of the analysts of the study.


According to him, the TEA index of last year is very similar to the average of the last six years for Brazilian participation in the study, which is 12.8%. However, when this value is compared to the average TEA of the countries participating in all the studies from 2001 to 2007, it may be observed that the Brazilian average is consistently above the global average, which is 9.07%, estimating a total of 222 million beginning entrepreneurs around the world.


According to the technical director of the Brazilian Micro and Small Business Support Service (Sebrae), Luiz Carlos Barboza, this increase of new companies is directly related to the health of the Brazilian economy, as well as to the entrepreneurial spirit of the Brazilians. “After some decades, Brazil is experiencing a period of continued growth, with reduction of interest rates and greater credit, especially for natural people,” stated the director.


Barboza believes that small businesses, the majority among the new initiatives, are the most vulnerable to variations in the economy. “They are the first to feel the effects of lower consumption or hardships in credit. However, when the economy goes well, there is greater survival of existing businesses, and stimulation to the birth of others,” he observes.


In this edition, the GEM study has continued working with two categories of ranking. One of them is the rate of entrepreneurship in initial phases, measured through researches with the adult population (18 to 64 years of age) who are actively involved in the creation of new enterprises or are heading organizations that have been in operation for a maximum of three and a half years. The other category is that of companies established at least three and a half years ago (42 months).


In the TEA category of initial entrepreneurs, the ten most entrepreneurial countries are: Thailand (26.87%), Peru (25.89%), Colombia (22.72%), Venezuela (20.16%), the Dominican Republic (16.75%), China (16.43%), Argentina (14.43%), Chile (13.43%), Brazil (12.72%) and Uruguay (12.21%). The eight least entrepreneurial countries are Japan (4.34%), Sweden (4.15%), Romania (4.02%), France (3.17%), Belgium (3.15%), Puerto Rico (3.06%), Russia (2.67%) and Austria (2.44%).


In the category of established companies, Brazil was in the 6th place (9.94%). Thailand (21.35%) and Peru (15.25%) also lead in this category, followed by Greece (13.31%), Colombia (11.56%) and Argentina (9.96%). Among the countries with the lowest level of companies established are Puerto Rico (2.40%), Israel (2.36%), France (1.74%), Russia (1.68%) and Belgium (1.40%).


Following the example of previous editions, the GEM also differentiated the entrepreneurs due to their motivation to develop a unique business. The objective was to verify whether the initiatives of entrepreneurs are due to business opportunities or whether they are related to the lack of options in the labor market. The entrepreneurship index due to opportunity and need is also defined.


Regarding this classification, in Brazil, the figures show that entrepreneurship due to opportunity has been growing since 2003, reaching 57%, around eight million initiatives by initial entrepreneurs.


Consequently, there was, in the same period, a reduction in the proportion of entrepreneurs through need, who now represent 43% – approximately seven million initiatives among the total initial enterprises.


Apart from the analysis of TEA indices in countries in this edition, GEM has brought as methodological innovation the greater comparison between Brazil and three groups of countries: G7 – the group of the seven richest nations in the world – Canada, France, Great Britain, Germany, the United States, Italy and Japan, the BRIC – Brazil, Russia, India and China, and the countries of Latin America.


In this analysis, it was identified that the Brazilian rate of 12.72% is representative when compared to other countries that play an important part in the global scenery. Another point identified was the relative stability of TEA over time in countries with high rates. Countries like Brazil, China and Peru, with rates over 10%, have maintained their position among the most dynamic in the world in terms of entrepreneurial activity.


Established in 1999, the Global Entrepreneurship Monitor (GEM) is the largest global independent study about entrepreneur activities, covering over 50 countries, which represents 95% of the global GDP and 2/3 of the population. The GEM is currently coordinated by the London Business School (England) and Babson College (in the United States).


To compose the research in Brazil, in 2007, 2,000 adult individuals were interviewed, between the ages of 18 and 64 years, in all Brazilian regions. The research has a confidence level of 95% and error level of 1.47%, and counts on the opinion of 36 Brazilian specialists. Between 2000 and 2007 a total of 17,900 adults were interviewed in Brazil.


Anba

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