GEM Report 2024/2025: Fear of failure and AI disruption among the factors in the decline of entrepreneurship
Access to finance and regulatory barriers remain significant obstacles to new businesses, yet 20% of adults globally are engaged in entrepreneurial activities.
The global entrepreneurial ecosystem faces a challenging landscape in 2024/2025, marked by economic uncertainty, technological advancements, and the need to adapt to new market trends. This is highlighted in the latest Global Entrepreneurship Monitor (GEM) report, which analyzes the state of entrepreneurship in over 50 economies.
The study reveals that 20% of adults worldwide are engaged in entrepreneurial activities, underscoring the crucial role of entrepreneurship as a driver of economic growth. However, access to funding and regulatory barriers remain significant obstacles for new businesses.
The report also highlights significant variations in early-stage entrepreneurial activity across income groups and within each income group. Ecuador has the highest rate of individuals starting or running new businesses, with just over one in three adults involved, followed by Chile, Saudi Arabia, and Canada.
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Meanwhile, for the fourth consecutive year, the United Arab Emirates (UAE) ranks first in the National Entrepreneurial Context Index, followed by Lithuania, Saudi Arabia, India, South Korea, Bahrain, Oman, Indonesia, Switzerland, and Qatar.
FEAR OF FAILURE
The report also reflects the growing fear of failure among potential entrepreneurs. In 2019, 44% of respondents agreed that they would not start a business due to fear of failure; by 2024, this proportion had risen to 49%.
In both years, a significant percentage of the 150,000+ respondents said they saw good opportunities to start a business (around 66,000 in 2019 and 60,000 in 2024). However, among those who identified these opportunities, the proportion of individuals who refrained from starting a business due to fear of failure increased from 42% in 2019 to 47% in 2024.
Between 2019 and 2024, the number of economies where at least two out of five people saw good opportunities but refrained from starting a business due to fear of failure increased significantly from 34 out of 50 (68%) to 43 out of 51 (84%).
KEY TRENDS OF THE GEM REPORT 2024/2025
The GEM report identifies three fundamental trends that are shaping the entrepreneurial landscape:
- Digitization and technology: The use of artificial intelligence and emerging technologies is driving new business models and allowing startups to access global markets more quickly.
- Sustainability and Social Responsibility: Interest is growing in businesses with positive environmental and social impact, with 35% of entrepreneurs aligning their projects with the Sustainable Development Goals (SDGs).
- Support and collaboration ecosystems: Entrepreneur networks and acceleration programs are playing a key role in consolidating new businesses, providing access to financing and mentorship.
CHILE AND THE REGION: OPPORTUNITIES AND CHALLENGES
In Latin America, Chile stands out as one of the countries with the highest entrepreneurial activity, with a dynamic ecosystem driven by both governmental and private support. However, the GEM report warns that access to financing remains a barrier to startup growth in the region, which requires greater efforts in incentive policies and venture capital investment.
"Entrepreneurship remains a key driver of innovation and economic growth. However, entrepreneurs must navigate a challenging environment where digitalization and sustainability will be determining factors for business success, the report states.
The Global Report editorial team, composed of 12 GEM researchers from nine countries, agrees that developing robust support systems—including financial assistance, accessible training, mentorship programs, and simplified regulations—is essential to reducing the risks of starting a business and addressing the fear of failure, ultimately enabling more entrepreneurs to thrive.