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Chile climbs to third place in world entrepreneurship ranking

InvestChile - January,24,2019

The Global Entrepreneurship Monitor (GEM) revealed that the South American country is one of the economies where entrepreneurship has increased most, giving it an index of 25.1%, up by 12 percentage points from 13% in 2008.

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In the latest Global Entrepreneurship Monitor (GEM), Chile has a total entrepreneurial activity rate of 25.1%, positioning it in third place globally. This is key for understanding the country’s economic dynamism.    

The data compiled by the study shows that Chile is one of the economies where entrepreneurial activity has grown most, giving it an index of 25.1%, up by 12 percentage points from 13% in 2008.

According to Maribel Guerrero, academic director of GEM Chile, the latest edition of the study uses a reclassification of countries based on income level (low, middle and high) as well as the United Nations methodology for grouping countries by region. Chile is classified as a high-income country with, for example, the United States and European countries. 

“Chile, like the other two countries with which it leads the ranking, is an entrepreneurial country, but what sets them apart is the quality of enterprises, that is, if they are driven, for example, by opportunity, necessity or innovation,” explains Guerrero.

According to Guerrero, Chile stands out in areas such as enterprises with innovation or the sharing economy. “From the methodological standpoint of the GEM, this indicator of innovation is defined as those early-stage enterprises (less than 42 months) which indicated that their products/services have been new for all or some of their clients and have few or no competitors. In this sense, the indicator reflects that almost half of early-stage Chilean entrepreneurs (47.2%) described themselves as innovators,” she says.

In addition, early-stage Chilean entrepreneurs offer products that are new, at least for some of their clients, in niche markets where there are few competitors. “To some extent, this indicator is related to growth through creative destruction and, in this edition, highlights countries like Luxembourg, Chile, India, Lebanon and Canada,” she adds.

In the case of the sharing economy, she argues that “in general, participation in the sharing economy reflects the percentage of the adult population, from 18 to 64 years old, who have received income from renting or leasing out some of their own goods or property, or from granting access to services they provide through a digital platform.” In this area, countries such as Korea, Israel, Chile, Ireland and the United States have been those with the highest percentages of entrepreneurs involved in shared economies.

Another of the points on which Chile stands out globally is motivation for entrepreneurship since the downward trend that had been observed since 2012 changed slightly in the 2018-19 edition. “Specifically, opportunity-driven entrepreneurship (18.6%) versus necessity-driven entrepreneurship (5.9%) showed a positive change of almost one percentage point with respect to the 2017-18 edition,” points out Guerrero.

In relation to advances in this area, entrepreneurial ecosystems tend to be dynamic. In the case of Chile, the two aspects of the entrepreneurial environment that were best evaluated were entrepreneurship education at the school stage and the transfer of innovation and development. Guerrero emphasizes that “both areas of the ecosystem are important in terms of reducing personal barriers to entrepreneurship (knowledge, skills and capabilities) and the quality of the entrepreneurs’ initiatives, with a more innovative component that contributes to economic growth.”  

To learn more about Entrepreneurship in Chile, see this article.

Source: Economía y Negocios

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Topics: Chile- Innovation- Entrepreneurship- Ranking- development

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InvestChile

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