August 2, 2018
The business environment in Guatemala remains unfriendly towards entrepreneurship. For example, the cost to register a business represents approximately 82% of the average initial investment made. In spite of this, there is thr presence of high-impact entrepreneurs and small businesses that are starting to make an impact on the economy. However, in recent years this has slowed down in that every year, over 200,000 Guatemalans enter the job market and only 20,000 are able to obtain a job in the formal market place. People recognize that entrepreneurship is the answer and many consider entrepreneurship as a good career choice.
GEM has awakened the necessity to use quantitative methods to analyse the topic to such an extent that more than half of all research done on the subject uses results gathered via GEM .
Contribution of GEM to policy
Through GEM research, the Universidad Francisco Marroquín is facilitating the understanding of entrepreneurial action in Guatemala and helping entrepreneurs expand their freedom of action through promoting the respect of private property and rule of law.
GEM has changed the focus on how entrepreneurship is addressed in Guatemala. When searching online for information about entrepreneurship, over half of the research results display content provided by the GEM team in Guatemala.
In 2010, when the first report for GEM Guatemala was published, it clearly stated that the environment for doing business greatly influences the ability of entrepreneurs and businesses to grow and develop. Elements such as taxes, labour and trade regulations represented a challenge to entrepreneurs. Probably due to this and the subsequent report by the Ministry of Economy in 2015, a policy was developed to ease regulations. In 2017, the Legislative Commission of Small and Medium Enterprises introduced a bill that contains elements to simplify the legal procedures that entrepreneurs have to follow to register and close businesses.
The impact of GEM has been so significant that the Deputy Minister of Support to Small and Medium Enterprises (the entity responsible of drafting the National Entrepreneurship Policy) wrote a personal thank you note for the support that the GEM has contributed for the development of entrepreneurial activities in the country.
The Deputy Minister, Sigfrido Lee, sent a thank you letter to Mónica de Zelaya, the Dean of the School of Economic Sciences, Universidad Francisco Marroquín and leader of the GEM team in Guatemala:
“The purpose of the following letter is to recognize the work that you and the Universidad Francisco Marroquín have taken in the development of the Global Entrepreneurship Monitor for Guatemala. During my tenure as Deputy Minister of Economy from 2012 to 2016, we took the responsibility of elaborating the National Entrepreneurship Policy –EMPRENDE-. This is the result of a regional effort at the Central American Integration System (SICA), particularly led by the Regional Development Center of MSME –CENPROMYPE-, which in the past developed the Regional Strategy for Entrepreneurship. It is important to mention that the efforts, at the national and regional level, to boost entrepreneurship through public policy would not have reached the impact they have had if timely and reliable information on entrepreneurship would not have existed. It is in this area that the GEM had a fundamental role and I would like to add that it is not only in the design of the policies but also in the implementation."
Stakeholders who use GEM
There are many different stakeholders who use GEM in Guatemala, as it is the only existing source with quantitative data that facilitates the analysis of entrepreneurship and examines its evolution together with allowing cross country comparisons.
Educational institutions at all levels use GEM to learn more about entrepreneurship in the country as well as use the results for teaching purposes. GEM information has been included in a book about entrepreneurship for high school students. Academics have used GEM data for writing papers and for research which has contributed to reducing barriers for entrepreneurial action. GEM information has been shared with the media and opinion leaders as a source off relevant data for editorials and articles as well as think tanks.
Government websites
The information collected by GEM was used by the Ministry of Economy to prepare the National Entrepreneurship Policy. Page 31 to 33 shows GEM as source of information.
In the memorandum for the proposed Entrepreneurship Support Bill, page 2 to page 5, information gathered by GEM is used to support the bill.
In addition, the Department of Commerce has established entrepreneurship centers, where entrepreneurs can find support. To justify the existence of this program, one of the most important elements used is the information acquired by the GEM.
Entrepreneurship programs
The Ministry of Economics has a program which offers support to entrepreneurs in different geographical locations in Guatemala.
The School of Economic Sciences of the Universidad Francisco Marroquín created the Kirzner Entrepreneurship Center. The center promotes several projects and activities with the aim of promoting the knowledge and practice of entrepreneurship.
This is a shortened version of a chapter that first appeared in the publication The Influence of GEM on Policy 2017/18.
If you would like information about forming a National Team in your country or sponsoring GEM’s work, email us at info@gemconsortium.org.