2020 Entrepreneurial Activity Review 

In 2020, Spain experienced small declines among many of its key entrepreneurial activity indicators, with the entrepreneurial outlook being shaped by the COVID-19 pandemic. Overall, 43% of Spanish adults (18–64) reported that they had lost at least some household income as a result of the pandemic. While this is on the higher side for GEM European economies, it is a bit lower than other southern European economies such as Greece (55%) and Italy (52%). This macroeconomic decline may impact entrepreneurial confidence, as Spanish adults’ intentions to start a business in the next year shrank slightly, from 7.4% in 2019 to 6.8% in 2020, one of the lower rates among all GEM participating economies, although still above Italy’s rate of 4.5%. Of these potential entrepreneurs, 54% stated that the pandemic had influenced their intention to start a business. 
Spain’s Total early-stage Entrepreneurial Activity (TEA) rate declined slightly, from 6.2% in 2019 to 5.2% in 2020. Its 5.2% rate is the third lowest among GEM European economies, ahead of only Italy (1.9%) and Poland (3.1%). This has been about the average, or near-average, TEA rate for Spain over the past few years, suggesting a fairly stable set of entrepreneurially oriented adults in the economy ready to engage in new business ventures. However, it will be interesting to track whether this rate remains in the 5–6% range, as three-quarters of adults involved in TEA reported that they saw no new opportunities because of the pandemic. Depending on the severity of the pandemic in Spain, those who are not ready to adapt may not remain entrepreneurs, in which case the rate may decline further. This dynamic is also present in Spain’s Established Business Ownership (EBO) rate, which actually increased, from 6.3 in 2019 to 6.7 in 2020. However, four-fifths of Spanish adults involved in EBO see no opportunities because of the pandemic. It will be essential to track whether established business owners, like early-stage entrepreneurs, can continue their business model without reacting to opportunities presented by the pandemic during the economy’s recovery. 

2020 Framework Conditions Review 

While entrepreneurial activity in Spain remained relatively stable during 2020, giving the impression of steadiness, Spanish experts did not see it this way. In all but one Framework Condition, experts awarded significantly lower scores to Spain in 2020 compared to 2019. Their assessment of the Spanish government was particularly negative. For “Government policy: support and relevance” the score declined from 5.3 in 2019 to 4.6 in 2020; for “Government policy: taxes and bureaucracy” the score declined from 5.1 to 3.9; and for “Government entrepreneurship programs” it fell from 6.0 to 5.7. It is unsurprising, then, that experts rated the Spanish government’s response to the pandemic at only 3.5, 39th among all GEM economies. The only condition in which Spain improved is “Commercial and professional infrastructure”, the score for which rose from 6.0 in 2019 to 6.5 in 2020, placing it fifth among all GEM economies. The negative assessment of the Spanish government’s response is matched by a negative assessment of entrepreneurial performance during the pandemic. Experts’ gauging of the entrepreneurial response to the pandemic as 6.2 places Spain 35th among GEM economies. This presents a unique challenge, given how many conditions Spain will need to improve on if it is to enhance the conduciveness of its business context for entrepreneurship. Policies that make it easier to access new customer markets may help, as many entrepreneurs fail to see opportunities as a result of the pandemic.