Overall entrepreneurship rate declines in Brazil in 2020 and 2021 but still well positioned -study

RIO DE JANEIRO, BRAZIL – The Global Entrepreneurship Monitor (GEM) report, conducted by Sebrae and the Brazilian Institute of Quality and Productivity (IBQP), shows that the total entrepreneurship rate (TTE) in Brazil has decreased for two consecutive years.

The index indicates the percentage of the adult population who are entrepreneurs: 30.4% in 2021, 316% in 2020, and 38.7% in 2019 – the highest percentage since 2015, when the rate was 39.3%

The study points out that the country lost 9.4 million entrepreneurs in 2020 and reached the lowest level since 2013 in 2021.

Last year, the number of people between 18 and 64 running their own formal businesses was about 43 million. In 2020 and 2019, that number was 44 million and 53.4 million people.

“In a way, this was to be expected,” says strategic marketing and entrepreneurship expert Paulo Guilherme Leal of the decline in overall entrepreneurship in the country in 2021.

“In my estimation, the global crisis triggered by the Covid-19 pandemic, the rising costs, and the crisis in the supply of basic necessities are one of the main reasons for this trend, as many entrepreneurs and microentrepreneurs were no longer able to cover their costs and were forced to close their formal businesses,” he explains.

Nevertheless, data from the GEM report show that Brazil moved up two positions in the world rankings for total entrepreneurial activity during the period studied. In 2020, the country was seventh on the list out of 47 countries.

In 2021, Brazil was in fifth place, behind the Dominican Republic (45.2%), Sudan (41.5%), Guatemala (39.8%), and Chile (35.9%).

EXPECTATIONS FOR 2022

However, from the experts’ point of view, despite the decline in the last two years, Brazilian entrepreneurship is expected to grow in 2022, although still at a low growth rate.

“The pandemic served to show new ways of doing things. It forced us to think creatively, which naturally leads to new ideas for businesses.

According to Spark Hero’s Digital Business Brazil Panorama survey, more than half (54%) of the country’s digital entrepreneurs launched during the health crisis.

According to the strategic marketing expert, there has been a boom – an accelerated development – in digital entrepreneurship in the last two years.

“The segment is increasing and tends to continue to grow not only in 2022 but also in the coming years. The emergence of the metaverse is already allowing many new companies to blossom, and opportunities are being created that didn’t exist before.

Numbers back up Leal’s statement: the market opportunity for the metaverse could reach $800 billion by 2024, according to estimates from Bloomberg Intelligence.

MOST BUSINESSES RELY ON THE INTERNET

The Cisco Broadband Index, a global survey of residential broadband access, quality, and usage completed in 2021, shows that more than half (56%) of entrepreneurs worldwide rely on the Internet to work and run their businesses.

The survey indicates that 75% of respondents, in general, believe that broadband services need to be significantly improved to support remote working, while in Brazil, 82% of participants held this opinion.

In addition, 78% of respondents stressed the importance of reliability and quality of broadband connections for work and business, while the percentage here is 82%.

Overall, 84% of respondents said they depend on high-capacity Internet access. In rural areas, 88% of people mentioned this.

For digital entrepreneur and leadership coach Denis Macedo, the Internet has expanded self-employment opportunities in recent years that depend only on a good Internet connection and a computer.

Nevertheless, it is not only necessary to have a device and access to the net but also to know what mechanisms and strategies to use to succeed in your business.

“Today, in Brazil, there is no better and easier way than to use the Internet as a means of entrepreneurship. An extra income is guaranteed in the first month with a lot of effort, but financial freedom has more to do with many factors, such as study, dedication, consistency, and luck.”

According to Denis, Brazilian entrepreneurs must work hard to acquire the discipline necessary to thrive and become leaders in their segment.

“Discipline is a consequence of results. No one dedicates himself to something without seeing the consequences of his goal. I dare say that over 90% of people on the Internet don’t get results because they give up.”

For him, there are several reasons for failure, he continues, but the most important is giving up due to a lack of discipline in the first month.

“The individual buys an online course that promises extra income on the Internet, then applies the theoretical content, but finds that it takes about six months to see the first results. However, in our culture, we don’t have enough social proof yet for him to keep applying the method until he gets the first results,” he says. “We are guided by results, whether our own or those of others,” he concludes.

NUMBERS

9.4 million – number of entrepreneurs lost in 2020 and 2021
5th place – Brazil’s position among 47 countries studied in the global report on entrepreneurship rates in countries
30.4% – Percentage of Brazilian adult population working as entrepreneurs by 2021
43 Million – Number of Brazilians between 18 and 64 years old who run their own formal business in Brazil.
Source: with information from Tribuna do Norte