Each survey cycle, GEM National Teams calculate the percentage of respondents who perceive good opportunities to start a new business but that a fear of failure prevents them from doing so. This ‘fear of failure’ rate can signify what portion of a country’s potential entrepreneurs, for whatever reason, see too much risk in starting a new business.
The variation between countries’ fear of failure rates can depend on several factors, including the country’s development level (innovation-driven countries tend to have higher levels of fear (Levie, 2015) and its entrepreneurial gender balance (female entrepreneurs tend to have higher fear of failure rates [Hart et al., 2018]) among other factors.
However, even as countries differ in absolute rates, there appears to be a strong trend for most GEM countries that as their perceived entrepreneurial capabilities increased, their fear of failure tended to decrease. That is, there is a strong negative correlation between these two indicators (perceived capabilities and fear of failure) from 2010-2017; r = -0.540, n = 499, p = 0.0001.
Below are the rates for all participating GEM countries, from 2010 through 2017:
This analysis suggests that in many GEM countries, entrepreneurs reduced their fear of failure when they had the skills and knowledge to start a business. This may seem intuitive but given the differences between countries mentioned above, the fact that this trend exists across most GEM countries suggest that in many contexts skills and knowledge can override fear of failure.
Analysis by Forrest Wright (GEM Global Data Team)