Total early-stage entrepreneurial activity (TEA) dropped again in Italy in 2019, according to the 2019/2020 GEM Italy Report. It is now below 3%, close to the lowest level observed since soon after the financial crisis of 2008-2009. It follows a continuous decline from the highest level of about 5% reached in 2015. In 2019, Italy was the country with the lowest level of TEA among those surveyed by GEM.
Here are some of the other key findings.
- The age pattern of TEA is similar to other developed countries: the highest TEA is in the 25-34 age category (7.6%). However, in Italy the difference between this age category and the youngest and oldest ones is higher than the EU average. TEA drops to 1.9% in the youngest (18-25 age category) and to 2.7 for the 35-44 age category.
- As observed in other countries, TEA links with personal income. In the case of Italy the difference in the entrepreneurial propensity between those with a high income and those with a medium or low income is much higher than in the EU average: TEA is about 10% in high income adults and less that 2% in the other income categories. This may be the result of the difficulties in raising financial resources to start a new business. Indeed, this issue was underlined in the NES (National Expert Survey) as a weakness of the Italian entrepreneurial ecosystem.
- The GEM survey reveals a discrepancy between the willingness to start an entrepreneurial career and the actual involvement in the starting of new businesses. Among the factors explaining this discrepancy are a high level in the fear of failure and a low level of self-perception in the ability to start and run a business. These issues call for a strong investment in entrepreneurship education at all levels, from primary education to universities.
- Similar to other countries, we also see a significant gender gap in Italy. On average, female TEA is about half the male value. There is a higher percentage of necessity-based entrepreneurship among females; male TEA comprises a higher share of opportunity entrepreneurship and for this reason is more dependent on the economic cycle.
The COVID-19 crisis is severely affecting entrepreneurial activity. We are witnessing a sharp decline on new firm formation as a result of the lockdown. This decline will likely continue in the following months. Moreover, we expect a sharp recovery in new firm formation in the second half of the year. In the next months we also expect a significant increase in business closures especially in industries like tourism and leisure, which are more affected by mobility restrictions and are characterized by a large share of small enterprises.
This is a crisis like no other in terms of macroeconomic impact and changes in consumer and business models. Entrepreneurial activity is going to play a crucial role in the post-crisis phase: to move resources from declining to growing sectors and to introduce innovations in all sectors.
The GEM Report provides a thorough analysis of the factors affecting entrepreneurial activity which may help in the design of policy measures aimed at supporting established and would be entrepreneurs. Download the full report.