2023 POLICY ROADMAP

Brazilian GDP growth was stable in 2023, expected to be just under 3% for the year, while inflation had fallen to around 4%. Business sales were down, and the fiscal deficit was up. The Brazilian Central Bank was maintaining high interest rates to combat inflation, inhibiting business lending.

Brazil has been reforming its tax and business regulations, reducing both business costs and the time needed to register a new business, now down to less than a day — a new record.

2023 Framework Conditions Review1

The assessed overall quality of the Brazilian entrepreneurial environment fell sharply in the COVID-19 pandemic, but has begun to recover. In 2023, only two of Brazil’s Entrepreneurial Framework Conditions (EFCs) scored as sufficient — Ease of Entry: Market Dynamics and Physical Infrastructure — leaving 11 as insufficient. Four were very poor with scores less than three: Entrepreneurial Education at School, Research and Development Transfers, Government Policies: Taxes and Bureaucracy, and Ease of Access to Entrepreneurial Finance, with the latter ranking 47th among the 49 GEM economies. As usual, Entrepreneurial Education at School scored lowest, and Physical Infrastructure highest.

Eight of these scores were higher in 2023 than a year earlier, with the largest increases being for Entrepreneurial Education Post-School and Physical Infrastructure. As a result, Brazil’s overall score for the quality of the entrepreneurial environment improved from 3.6 to 3.8, ranking Brazil 46th of 49 economies.

Additional questions asked national experts to rate Brazil’s social support for women entrepreneurs and their access to resources compared to men. Brazil scored poorly for social support (2.4, ranked 46th), but very well for comparative access to resources (6.3, ranked 5th).

2023 Entrepreneurial Activity Review

Nearly two in five adults in Brazil reported that their household income had fallen in 2023, a substantial proportion but down from three in five two years earlier. Despite this, nearly one in 10 adults have invested in someone else’s new business, the fifth highest level in GEM 2023.

Entrepreneurship has a high public profile in Brazil, with seven in 10 adults knowing someone who had started a business recently, while two out of three saw good opportunities to start a business locally or considered themselves as having the skills and experience to start their own. However, nearly one in two of those seeing good opportunities would not start a business for fear it might fail. Nevertheless, almost
a half of those not already doing so expected to start their own business in the next three years — the fourth highest level in GEM.

The proportion of adults in Brazil who were starting or running a new business in 2023 was more than one in four, a stable proportion over the past three years. Men were more likely to start a business than women, with around five men starting new businesses for every three women doing the same. The rate of Established Business Ownership was relatively high at about one in eight, and had been rising steadily since the depths of the pandemic.

Making a difference in the world was the most agreed motivation among new entrepreneurs at three out of four, just ahead of making a living because jobs are scarce. Very few new entrepreneurs had customers beyond Brazil, although that may change, given that nine out of 10 expected to use more digital technologies to sell their products in the next six months. Three in 10 new entrepreneurs expected to employ at least another six people over the next five years, an impressive rate when one in two of those starting or running a new business was a solo entrepreneur, with one owner and no current employees.

1 A brief description of the GEM approach is given in the footnote on p. 107.