EY ROMANIA

  |  27.08.2013

Entrepreneurs call on G20 countries to stimulate job creation and growth

With many countries continuing to face high levels of unemployment and challenges in economic growth, EY’s G20 Entrepreneurship Barometer 2013 (Entrepreneurship barometer in G20 countries) calls on governments, ahead of the G20 Leaders Summit next week, to collaborate with entrepreneurs in order to kick-start their economies and create jobs

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The study assesses entrepreneurship and ranks the G20 country across five “pillars” of the entrepreneurial ecosystem: access to funding, entrepreneurship culture, tax and regulation, education and training, and coordinated support. The barometer is based on a survey of over 1,500 leading entrepreneurs and qualitative data on entrepreneurial conditions across the G20. It also draws extensively on EY’s own research of more than 200 government leading practices

 

The barometer provides more than 40 key recommendations for governments, entrepreneurs and corporations to improve the conditions for entrepreneurship to stimulate growth and jobs.

 

Mature countries lead the way but rapid-growth markets are catching up

 

Across the G20, mature countries score highest overall on the barometer for providing the best ecosystems for entrepreneurship.

 

When ranked across all five categories, Australia, Canada, South Korea, UK and US lead the G20 in the upper positions. The US leads in terms of access to funding and entrepreneurship culture and France is top for education and training. However, rapid-growth markets are closing the gap and making the fastest improvements to their entrepreneurial environments. Saudi Arabia is perceived to be the most attractive in terms of tax and regulation due to its low corporate tax rates and simplified regulations. Within the final pillar, providing “coordinated support”, including mentoring and best practice exchanges, Russia scores highest, followed by Mexico and Brazil.

 

Job creation and youth unemployment

Entrepreneurs represent two third of employment in the G20 and they are a critical engine for job creation, including youth employment. Across the EU it was estimated that entrepreneurs supplied 67% of all new jobs in 2012[1],while in China the figure was even higher at 75%.

 

Access to funding top priority for action

Access to funding is cited as the top priority for global action by 70% of entrepreneurs, who agree that obtaining finance remains difficult as their businesses grow and develop. The barometer highlights that governments should create a range of mechanisms and institutions that provide entrepreneurs with capital at every stage of growth, alongside providing support and mentoring, which is essential to enable entrepreneurs to use this capital effectively.

 

The US ranks highest overall for providing access to funding, followed by UK and China. Thus, while in the US only 15% of entrepreneurs report that it is very difficult to find funding, in countries such as Italy and Argentina this figure is much higher at 45% and 40%, respectively.

 

Access to early-stage funding is starting to improve, with the US, Canada and Australia as well as Saudi Arabia and Indonesia performing well in providing funding for start-ups.

 

On the other hand, 83% of entrepreneurs agree that an innovation focused tax incentive would improve entrepreneurship in their countries. For example, in Canada, entrepreneurs can recover 50% of all their research and developments’ expenses, regardless of profit or loss.

 

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