28/09/2017 - Entrepreneurial activity appears to be recovering from the crisis as new data show that the number of new businesses created has been rising in most OECD countries.
At the same time, the number of bankruptcies has fallen back to pre-crisis levels in most of the economies surveyed. Even in Iceland, Italy and Spain where business failure levels remain higher than in 2007, the latest 2017 quarterly data point to an improvement.
In its latest Entrepreneurship at a Glance, the OECD says that of the 14 OECD countries with the most recent data (up to the first quarter of 2017), nine show total business creations trending upwards. They include Australia, Belgium, France, Hungary, Iceland, the Netherlands, Norway, Sweden and the United States. These positive signals are also observable when looking only at incorporated businesses, with creations trending upwards in ten of the twelve countries where data are available: Australia, Belgium, France, Italy, the Netherlands, New Zealand, Portugal, Spain, Sweden and the United Kingdom.
The report says part-time self-employment has increased sharply in recent years, in part reflecting the rise of the “gig economy”, characterised by flexible working arrangements that complement or substitute full-time jobs. But it adds that the relationship between the gig economy and entrepreneurial activity is by no means obvious. Although many gig workers may be small-scale entrepreneurs, many also appear to provide their services under similar contractual arrangements to conventional employees.
OECD data show that many newly created businesses fail within the first few years of life although there are big differences between countries. The one-year survival rate of firms started in 2013 was above 90 percent in Sweden, the US, Luxembourg, Lithuania and Britain; between 60 and 70 percent in the Czech Republic and Poland; but below 55 Percent in the Slovak Republic.
In 2014 start-ups – firms less than two years old - accounted for around 20 percent or more of firms in most countries and for more than 30 percent in the United Kingdom, Hungary, Brazil, Israel and Poland. Start-ups nevertheless represented less than 10 per cent of business employment in most OECD countries.
The report also includes findings from the latest monthly Future of Business Survey, a joint OECD-World Bank-Facebook initiative which shows that firms trading internationally are more confident in the current state and future outlook of their businesses, and more likely to have positive prospects of job creation.
The survey findings also point to gender gaps with regards to international trade. Businesses run by men are more likely to be involved in international trade than female-run enterprises, and are more likely to export to other businesses, compared to female entrepreneurs; where exports are more geared towards individual consumers.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.