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When we look at the evolution of the last 7 years of the GEM (General Entrepreneurship Monitor) report, the most important observatory in the world on entrepreneurship, we note that Spaniards between the age of 18 and 64 find it difficult to perceive entrepreneurship opportunities in their environment. This situation indicates that this is a structural and non-conjectural issue to the different crises and the situation of the country’s economy. This situation is exacerbated when we compare Spain vs the nearest countries around it. The causes must be found in an environment where there is no culture of entrepreneurship, and where public policies do not adequately support it. Moreover, the protectionist environment in which the country is involved does not favor it as well as the image of the entrepreneur in society as a whole. The latest GEM report indicates how the percentage of the population (18-64 years) who agree that undertaking provides social and economic status is 48%, still far from the EU average, which is almost 70% and the major European countries exceeding that average.

Figure 9 shows us the valuation that our country makes, compared to the average of France, Germany, the United Kingdom, and Italy when it comes to considering entrepreneurship as a good choice in terms of career, which is united with that perception of prestige and respect for the entrepreneurial professional career.

Figure 9. Entrepreneurship as A Good Career Choice

Notes: Entrepreneurship as a good career choice are percentage of 18-64 population who agree with the statement that in their country, most people consider starting a business a desirable career choice. Mean represents the mean value of France, Germany, Italy and United Kingdom respect to this indicator.

Source: own elaboration through GEM data (2020), https://www.gemconsortium.org/data

As can be seen in the chart, Spain scores in this indicator below the countries taken from the reference of its environment. Only in 2012, to be an entrepreneur was considered a good career choice, probably due to the side effects of the 2008 crisis. Again this result means that we have to make a hard reflection on the model of culture and organizational behavior that is in Spain, in which risking is not an option and we often have the perception that if a business does not prosper it is a failure and not a learning opportunity as in other countries.

However, if we consider the indicator that measures the perception of opportunities in terms of entrepreneurship, and we analyze the overall evolution since 2012 is an indicator that has had a positive trend. A situation that indicates that the population perceives that the current environment offers better opportunities for entrepreneurship.

In this sense, it is necessary to clarify that when it comes to measuring challenges and opportunities in entrepreneurial ecosystems, they are valued around several factors such as the marked interregional differences, very present in the case of Spain; digitization; as well as resilience to the impact of shocks (covid-19, Brexit, economic crises......). These characteristics influence the new workforce in Europe. And, Spain doesn’t stay out.

Figure 10. Perceived opportunities

Notes: Perceived opportunities are percentage of 18-64 population who see good opportunities to start a firm in the area where they live. Mean represents the mean value of France, Germany, Italy and United Kingdom respect to this indicator.

Source: Own elaboration through GEM data 2020, https://www.gemconsortium.org/data

Thus, the above data (Figure 10) tell us a clear margin of improvement, comparing the data of Spain with the average of the countries in our environment in terms of perceived opportunities. We have chosen France, Germany, Italy, and the UK as a medium by cultural and geographical proximity. In the case of France and Italy, and Germany and the UK for innovation. On the other hand, if we make a comparison with other economies we see how ASD, Spain’s main indicator of measuring entrepreneurial activity in relation to innovation, is far from the average ASD of other innovation-based economies such as Germany or the UK. This rate stands at 9.2% (it is important to remember that Spain is classified as an innovation-based economy according to the World Economic Forum).

The data in the latest GEM report tell us how the percentage of new companies declaring that they have not launched an innovative product/service has decreased. It is well known that not all new companies make the same use of new technologies. Some companies consider them more important for the development of their business day activity, while for others it is not as relevant. In general, the data of the entrepreneurial collective with consolidated businesses reflect higher rates of dependence on more obsolete technology (more than 5 years old). The data reflect that an obvious majority of entrepreneurial projects are born with a small business size in Spain (in the key of self-employment without more people employed than themselves) concentrated mostly in service sectors (especially in the trade that serves the final consumer). This business has a modest innovative orientation, a low dependence on state-of-the-art technologies, and a weak expectation of business growth.

Figure 11. Innovation

Notes: Innovation are percentage of those involved in TEA who indicates that their product or service is new to at least some customers AND that few/no businesses offer the same product. Mean represents the mean value of France, Germany, Italy and United Kingdom respect to this indicator.

Source: Own elaboration through GEM data (2020), https://www.gemconsortium.org/data

The latest SBA Fact Sheet also reflects this situation, where Spain appears below the European average in almost all indicators of the principle of entrepreneurship.

However, when we look at Spain’s TEA (Figure 12) concerning the average in France, Italy, UK and Germany, we see how the Activity Rate is even above these countries. The TEA is the main indicator developed by the GEM project and corresponds to the sum of the percentage of rising entrepreneurs and the percentage of new entrepreneurs. It is noteworthy that, if we look at the principle of “second chance”, which refers to a natural person despite his business economic failure, having the possibility to once again face his life and even risk new initiatives, without having to drag indefinitely a debt that he will never be able to satisfy. Spain is above the EU average and the countries around it, which is an incentive when it comes to re-undertaking or relaunching an activity.

Figure 12. Total Early-Stage Entrepreneurial Activity (TEA)

Notes: Total Early-Stage Entrepreneurial Activity (TEA) are percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business. Mean represents the mean value of France, Germany, Italy and United Kingdom respect to this indicator.

Source: Own elaboration through GEM data (2020), https://www.gemconsortium.org/data

About the entrepreneurship rate, there is a widespread view that in recent years there has been a real impact on it in Spain, it should be remembered that the concept of entrepreneurship is associated with innovation and knowledge to be considered as such. There is also the idea that although a significant differential remains to the most dynamic ecosystems at the international level, progress is going in the right direction. Thanks to the changes that are taking place in several areas this situation is possible, changes as:

1. The quality of the projects and the maturity of the promoting teams, with increasingly strong and sized value proposals that are already demonstrating their ability to compete successfully in national and international markets.

2. The development of an increasingly specialized financial system capable of providing increasingly tailored answers to the needs of entrepreneurs.

3. The greatest involvement and participation of large corporations from what is known as “open innovation” strategies.

4. Education for entrepreneurship (EE) is a key element in promoting entrepreneurial culture. As of 2006, the European Commission in its Recommendation on Key Competences for Lifelong Learning identified the “sense of initiative and entrepreneurship” as one of the key competencies. In this line, the Eurydice network report shows how Spain has an online definition with that in the European Framework of Reference on Key Competences for Lifelong Learning, which emphasizes knowledge skills related to career and employment opportunities, economic and financial education and the principles of business management. However, Spain does not have a specific strategy at the national level.

Another essential element in the decision to undertake is that the individual perceives that he has the necessary skills and abilities to turn that opportunity of merchandise into reality. Sometimes, even if you see that business opportunity exists, it may not get worse because you are not able to carry it out and turn it into a sustainable enterprise. That human capital is the set of knowledge and skills you have acquired throughout your life, whether through the educational process or previous experience. However, when deciding to undertake, it is not only that you have that knowledge, but also perceive it as such (Arenius & Minniti, 2005).

Figure 13, details the evolution of the perception about the possession of knowledge and skills to setting up a business of the Spanish population from 18 to 64 years, we see how the percentage that responds in the affirmative to that perception is 48.6% in 2018 almost an increase of 4 percentage points compared to 2017. On the other hand, concerning all the countries analyzed it is observed how the Spanish population has a higher perception that they have such knowledge and capabilities to start a business.

Figure 13. Perceived capabilities

Notes: Perceived capabilities are percentage of 18-64 population who believe they have the required skills and knowledge to start a business. Mean represents the mean value of France, Germany, Italy and United Kingdom respect to this indicator.

Source: Own elaboration through GEM data (2020), https://www.gemconsortium.org/data

As for entrepreneurship, it is necessary to make it easier for the entrepreneur to start their business. We could say that there are two ways, on the one hand, to encourage the creation of new companies and on the other hand to promote their transmission, so that the entrepreneur can acquire an existing company.

While it is true that in Spain different actions have been carried out over the last few years to facilitate and expedite the creation of companies, entrepreneurs continue to encounter difficulties in creating their companies. Besides, the picture in terms of times, formalities and costs that are depending on the autonomous community and the city where they decide to create their company is quite different.

The World Bank’s latest Doing Business (2019) report places Spain 86th in the company creation indicator, with an average of 12.5 days and 7 formalities to form a limited company. While it has improved substantially in recent years, and although we are below countries such as Germany or Japan, this data is far from the OECD average of 9.3 days and 4.9 formalities. The second way is the transmission of companies so that an entrepreneur does not start from scratch but acquires a company already in operation.

In this area and according to European Union data, approximately 450,000 companies with two million jobs are transferred in Europe annually, and an estimated 150,000 companies and 600,000 jobs are lost due to inefficiencies in transmission processes (in Spain it is estimated that there could be some 12,000 companies and 48,000 jobs). The decision to sell a company is possibly one of the most difficult decisions in the life of an entrepreneur, involving economic, legal and psychological aspects. Moreover, the transmission process itself is considered to be the main barrier to the conclusion of contracts for the sale of companies. This problem is especially evident in the case of entrepreneurs and small businesses, as large companies can normally find appropriate tax and legal advice without excessive problems.

European policies aimed at promoting the entrepreneurial initiative are increasingly aimed at preventing viable businesses from having to close because they do not find a buyer or because they have not foreseen the transfer in advance. It is the work of public administrations, therefore, to promote the continuity of an existing company by facilitating transmissions, since it also provides viable initiatives to entrepreneurs that significantly increase their chances of success: the survival rate of the companies transmitted is higher (66%) start-ups (50%). Also, existing companies retain an average of five jobs compared to a newly created one that generates an average of two jobs.

Figure 14 shows the entrepreneurial intentions of the Spanish population between 18 and 64 years in the last 7 years. We have included who are latent entrepreneurs and who intend to start a business within three years. As you can see, the intention to undertake in Spain has been declining markedly in recent years with significant differences when compared to the countries we have taken as a reference. By analyzing the data, we can conclude that in Spain, it is mostly undertaken out of necessity without opportunity. The highest level occurs in 2012, when the effects of the 2008 economic crisis were still remarkable so we can conclude that there was an impact of entrepreneurship by necessity, and then when the entrepreneurial intention was created, looking for a lower risk career path. A rather different situation from all the countries analyzed in which France is the country that shows a greater trend in terms of intent to set up a business.

Figure 14. Entrepreneurial Intentions

Notes: Entrepreneurial Intentions are percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who are latent entrepreneurs and who intend to start a business within three years. Mean represents the mean value of France, Germany, Italy and United Kingdom respect to this indicator.

Source: Own elaboration through GEM data (2020), https://www.gemconsortium.org/data

Another indicator to consider alongside the intention to start a business is the motivation for this. People become to be an entrepreneur for different reasons that can be gathered into at least two broad categories. On the one hand, some people start the process of creating a business in response to identifying opportunities not exploited in the market. On the other hand, some people decide this initiative in response to the need to find an occupation, arising from the lack of job alternatives.

Figure 15. Motivational Index

Notes: Motivational Index are percentage of those involved in TEA that are improvement-driven opportunity motivated, divided by the percentage of TEA that is necessity-motivated. Mean represents the mean value of France, Germany, Italy and United Kingdom respect to this indicator.

Source: Own elaboration through GEM data (2020), https://www.gemconsortium.org/data

Figure 15 shows the degree of motivation of the Spanish population to the average of the countries in our environment, which, as can be seen, is considerably lower not only in the last GEM report but concerning temporal developments. From a temporary perspective, it should be noted that although the motivational index is low, the motivation to undertake by the Spanish population involved in the early-stage business has been driven primarily by the desire to exploit a business opportunity. Indeed, the effects of the 2008 crisis on the motivation to undertake were noted from 2010 on and the relative weight of those who were undertakings per opportunity increased from 80.1% to 66.1% in the same period. Despite this unfavorable evolution of the relative importance of opportunity entrepreneurship in Spain, in recent years as can be seen in the graph there is some stability, far from the average of the countries in our environment but without being decreasing as in the case of these. We will have to wait for the effects of this new health crisis to assess motivation for opportunity or necessity.