The Ministry of Industry, Commerce and Mipymes (MICM), Barna Management School and the National Association of Young Entrepreneurs (ANJE) presented the findings of the third edition of the study Global Entrepreneurship Monitor (GEM) 2021-2022. The study analyzes the conditions that impact the entrepreneurial environment in 47 countries, including the Dominican Republic.
The study revealed that 80% of the adult population in the Dominican Republic have plans to start a business. Only 38% of them fear they will fail.
The report establishes that in terms of the proportion of adults starting or running new businesses, the highest rate among the 47 economies is in the Dominican Republic, where more than two out of five adults are starting or running a new business. The Dominican Republic is the most extreme example of new businesses, with a Total early-stage Entrepreneurial Activity (TEA level compared to Established Business Ownership (EBO) level of 42%. The study reveals that is 10 times the country’s EBO level. “In other words, the Dominican Republic has more than 10 adults starting a new business for every adult running an established business. Either there has been a very recent blossoming of entrepreneurship in that economy, so that new businesses have not had time to become established, or – and more likely – most of its new businesses are transient and will probably not survive into maturity.”
The research says new businesses are overwhelmingly more consumer-oriented services than business-oriented services. The Dominican entrepreneurs also are regarded as more likely to secure income from abroad. The study indicates that in the Dominican Republic (6.1%) of adults estimated 25% of their revenues would be come from outside the country. This compares to 5.9% in Canada.
The study reveals that the Dominican Repubilc, Chile and Canada were the most innovative in terms of the share of adults starting a business using technologies and procedures that are at least new to the area.
The study concluded that if entrepreneurial innovativeness is measured in terms of the proportion of adults in an economy who are either introducing products or services, or using technologies and procedures, that are at least new to the area, then the stand-out economies in the 47 GEM 2021 participants are Chile, the Dominican Republic and Canada.
The study also found that the pandemic has had a chilling effect on entrepreneurship. The GEM study reports a five-percentage point drop in the number of established businesses in 2021 compared to 2018.
Ministry of Industry & Commerce backed study
“From the MICM we are working to strengthen the entrepreneurship ecosystem in the DR by articulating actions that improve access to financing, training and development of human capital,” said MICM Minister Víctor (Ito) Bisonó. “The GEM represents one of our main tools to continue formulating evidence-based public policies for the benefit of our entrepreneurs,” he added.
Likewise, Paulo Alves, rector of the Barna Management School, expressed that they will use these inputs to investigate problems related to entrepreneurship, MSMEs and innovation from the academy. “All this we are doing will undoubtedly allow us to continue having a positive impact on the country in all organizations, and contributing to the improvement of the quality of management, that quality of people who are responsible for being better leaders in their organizations,” added Alves.
For his part, Luis Manuel Pellerano, president of ANJE, said that the business sector sees the updating of the GEM results through this inter-institutional alliance as a great step forward. Pellerano said that “from the Association we collaborate with the implementation of innovative initiatives, such as this one, in pursuit of the development and growth of our young entrepreneurs. This mechanism will be consolidated as a reference and source of information for all those involved in designing and implementing processes to support the entrepreneurial ecosystem”.
This study had the backing of the Banco Popular Dominicano, INICIA, E. León Jimenes and GAM Capital.
About GEM
The report was founded by Babson College and The London Business School. It is currently coordinated worldwide by the Global Entrepreneurship Research Association, sponsored by Babson College, Universidad del Desarrollo de Chile, Tecnológico de Monterrey and Tun Abdul Razak University.
It undergoes revisions each year through meetings and is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs.
Among its indicators are attitudes towards entrepreneurship, nascent businesses, ages of nascent businesses and the environment in which ventures develop.
The Dominican Republic was classified as Level C (<$20,000) by income ($GDP per capita) along with Brazil, Colombia, Egypt, Guatemala, India, Iran, Jamaica, Mexico, Morocco, South Africa and Sudan.
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Ministry of Industry & Commerce
Gem
15 February 2022