Guatemala stands out globally with a Total Early-stage Entrepreneurial Activity (TEA) rate of 29.4%, showcasing the active involvement of individuals aged 18-64 in nascent entrepreneurship or as owner-managers of recently established businesses. This percentage has steadily increased over time; it was 19% in 2009 and peaked in 2023. Despite this impressive entrepreneurial activity, Guatemala's National Entrepreneurship Context Index (NECI) score is 3.7 out of 10, positioning the country at 44th out of 50 economies. This indicates that while there is a high level of entrepreneurial activity, there is room for improvement in the overall entrepreneurial ecosystem to better support and facilitate the endeavors of entrepreneurs.
This is among the findings from the recently released GEM 2022/2023 Guatemala National Report. The research was authored by Mónica de Zelaya and David Casasola, who are associated with GEM Guatemala’s lead institution – Facultad de Ciencias Económicas Universidad Francisco Marroquín Centro de Emprendimiento Kirzner.
Here are seven other notable findings.
1. Perceptions toward entrepreneurship
Guatemala stands out for having the highest proportion of individuals viewing entrepreneurship as a viable income source (94%). However, social recognition (81%) lags behind low-income countries (86%). Media acknowledgment is the lowest among the mentioned categories (65%).
2. Attitudes toward entrepreneurship
Guatemala (68%) aligns with low-income countries in perceiving business opportunities (68%) but outpaces them in feeling equipped with the necessary knowledge and skills (78% for Guatemala vs. 71% for low-income countries).
3. Fear of Failure
Guatemala demonstrates a lower fear of failure rate (42%) than other Latin American countries (44%), indicating a more risk-tolerant environment for pursuing business opportunities.
4. Demographics
Guatemalan entrepreneurs are predominantly male (52%) and aged between 18 and 34 years (57.9%). Over half (58%) possess at least a diversified education level.
5. Job Creation
Almost half (48.5%) of new entrepreneurs do not generate employment, but there's a positive outlook for future job creation. In five years, nine out of 10 early-stage entrepreneurs expect to create at least one job.
6. Informality
A significant portion (71%) of early-stage ventures operates informally, with seven out of ten serving local communities. As businesses mature, informality rates decrease to 50%.
7. Entrepreneurial context
Education and training for entrepreneurship are seen as adequate at higher and vocational levels (5.4/10), but improvements are needed at primary and secondary levels (2.3/10). Lack of knowledge transfer (2.5/10), limited financial sector support (3/10) and government policies (2.4/10) hamper entrepreneurial activity.
Access the full GEM Guatemala National Report (in Spanish) for a comprehensive overview of Guatemala's entrepreneurial landscape, highlighting strengths, challenges and opportunities for growth. The report is a valuable resource for policymakers, educators and entrepreneurs to foster an environment conducive to sustained entrepreneurial success in the country.