Global Entrepreneurship Monitor shows pandemic's impact on new businesses

For the current Swiss edition of the Global Entrepreneurship Monitor (GEM) more than 2000 people were surveyed and experts interviewed. The survey took place in early summer 2020 after the first lockdown. The interim report entitled "Diagnosing COVID-19 Impacts on Entrepreneurship" has now been published.

In 2020, the enterprise birth rate, or "Total Entrepreneurial Activity" (TEA), was only slightly lower at 9.24% compared to 2019 (9.77%). But while current start-up activity was still stable, the outlook was clearly considered worse. Only 26.7% of the respondents perceived business opportunities for new companies. In the previous year, the figure was at 40.6%.

This was accompanied by an overall increased fear of failure. Around one-third (33.4%) of those who said they saw business opportunities were deterred from actually taking advantage of them by the fear of failure. The so-called "Fear of Failure" fluctuates strongly from year to year, but wasl at a historic low of 23.8% in the previous year.

In addition, the young entrepreneurs expect lower growth. Just under half said that the crisis would have a negative impact on growth. Of these, 15.9% expected growth to be much lower.

Collaboration as a way out

In comparison with similar countries, the experts interviewed for GEM see more intensive collaboration between new and growing companies and established firms in Switzerland due to the Covid 19 pandemic.  According to the experts, such collaborations are more frequent in Switzerland than in comparable countries.

(Press release / SK)
Picture: Engin Akyurt / Pixabay

The full interim report can be downloaded for free on the website of the Fribourg Schhool of Economics (in French or German).