The Global Entrepreneurship Monitor's report on entrepreneurship in Egypt examines the characteristics of small and medium-sized businesses in Egypt and the policy implications of the data.
Entrepreneurship is a critical component of growth in any society. Entrepreneurs create jobs, innovate with new products and services, and, through the starting of new businesses, they positively impact on the level of productivity in a sector or the economy. The fundamental aim of the Global Entrepreneurship Monitor (GEM) research is to provide a strong foundation for an informed policy debate about the relationship between entrepreneurship and economic growth and help governments identify what needs to be done to enhance the level and quality of entrepreneurship in their countries.
Key findings from the GEM Egypt 2008:
Entrepreneurial activity rates
- In the summer of 2008, 13.1% of adults in Egypt (18-64 years old) were either actively trying to start a new business (7.9%) or already owned and managed a business that was less than three and half years old (5.5%). This indicator is referred to as the Total Entrepreneurial Activity (TEA) rate. On this indicator, Egypt tanked 11th among 43 countries.
- These early-stage entrepreneurial activity rates converted to an estimated three million nascent entrepreneurs, i.e. Egyptians who were actively trying to start a new business, and about two million entrepreneurs with young businesses.
- With an average start-up team of 2.21 people, the three million nascent entrepreneurs were in the process of trying to start 1.34 million new enterprises.
- With an average number of 1.83 new jobs created per start-up (not including the owners), these new ventures, if actually launched, would have a substantial impact on job creation — over 2.4 million new jobs.
- Young businesses in Egypt (less than three and half years old) had an average ownership team of 2.19 persons. Thus, the total number of young businesses represented by the estimated two million Egyptian entrepreneurs in this category tallies to almost 940,000.
- Finally, 8.8% of the adult population reported being the owner of established businesses that were more than three and a half years old.
- Egypt’s TEA rate falls below the U-shape curve that appears to represent the relationship between country-level TEA rates and per capita GDP. This means that there is scope for more entrepreneurial activity in the country.
- Four out of five Egyptian early-stage entrepreneurs were motivated to start a business because they wanted to pursue a market opportunity, combined with a desire for independence and better income prospects (“opportunity-entrepreneurship”). The remaining 20% indicated they were primarily driven by the need to earn a livelihood (“necessity-entrepreneurship”). The share of “opportunity-entrepreneurship” in Egypt is higher than in most other countries at a similar level of economic development.
Download the report to read more of the Executive Summary and results.