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Arianna Montero

Nicole Loor


MBA. James Keeley

Winter 2014

GEM Reports

Ecuador/South Africa

According to the Ecuador and South Africa GEM reports there are difference between both
countries base on entrepreneurship.
The Ecuador’s TEA rate in 2012 was 26.6% (Ecuador, p. 10). This shows that approximately
TEA involved over a quarter of adults of population who plan to start a business or have their
own young company.
While in South Africa’s TEA rate decreased from 9.1% in 2011 to 7.3% in 2012 (Africa, p. 8) It
is significantly below the average of efficiency-driven countries (14.3%) (Africa, p. 9).

According to the areas:
Ecuador is a country in which there are different areas: urban and rural. Depending on the area,
the 70% of Ecuadorian entrepreneurs thrive in urban areas of the country. And the remaining
30% applied on rural areas of the country. (Ecuador, 2012, pág. 22)
While in South Africa the rates of entrepreneurs in metropolitan area are 73% and rural area are
22% of the all populations (Africa, 2012, pág. 44).

According to the gender:
Depending on the gender, Ecuador has 54% of entrepreneurs were women and men represent a
minor percentage, 46%. (Ecuador, 2012) The working conditions found in the average number of
women in the country can be a justification for most raid startup business.
While in South Africa's potential entrepreneurs is concerned, 43% of males, versus 35% of
females. (Africa, 2012, pág. 64) These rates are interesting because in Ecuador among this new
society discriminate women, and that is the reason they have to start their own business.

According to the education:
For opportunity-driven businesses in the early-stage entrepreneurial phase are 6.1%, compared to
2.1% for necessity-driven rate. (Timm, 2013) In this way the young people who start businesses
will be those with smart ideas who spot good opportunities.
While in Ecuador has been reported 9.5% of necessity. With this information we can affirm that
people in South Africa feel more comfortable with their life condition. The Ecuadorian are
obligate to start their own project for helping to improve their conditions.

Ecuador has a government entity which worries about people who have excellent idea but they
cannot start their business because of the lack of money. They help people in financial problems
that meet entrepreneurs, and seeking to strengthen ecosystem to support entrepreneurship. The
program “Emprende Ecuador” is currently working with the public banks to improve financing
conditions for enterprises. This program is working with: National Financial Corporation
(Emprende Ecuador, 2011).
In South Africa there is not a government agency that provides support to nascent entrepreneurs,
the lack of institutions can help Entrepreneurs to make dreams come true.

1. Discuss the similarities and differences in unemployment between the two nations.
E.g., how or why do you believe that unemployment affects TEA statistics?

About the similarities both countries has decreased the rate of unemployment, according to the
statists of Global Report 2012, in comparison with the last report 2011.
In Ecuador, the growth in recent years from TEA opportunity / need increased from 2.48 in 2008
to 1.78 in 2012. (Ecuador, 2012, p. 61), it helps to decrease the rate of unemployment, because
obviously if in a country there is not job, people have to find another activity to obtain money.
This situation motivates the entrepreneurs and affects TEA statistics, in the same time they
contribute with the country’s society. Actually, Ecuadorian labor market indicators discussed
show improvement. Moreover indicators of job quality full-employment and under-employment
could also explain the increase in entrepreneurship.
While in South Africa: The youth unemployment rate in South Africa is currently 48%. (Africa,
2012, p. 9). South Africa have to face a greatest challenge in fixing the youth unemployment
crisis is to create more jobs, focusing on youth entrepreneurship to reduce youth unemployment.
They have to provide information on those youth who are currently engaged in entrepreneurial
activity. It may help to shed light on what needs to be done to effectively stimulate youth to
consider entrepreneurship as a career option.
2. Compare and contrast YOUTH statistics from both countries, e.g., employment and
entrepreneur rates.

In Ecuador, the highest rate of opportunity-driven entrepreneurship adults is 25 to 34 years
(Ecuador, 2012, p. 23). In contrast, the rates of necessity-driven entrepreneurs are lower in young
people of 18 to 24 years (6.8%) (Ecuador, 2012, p. 23) and increases with higher age groups (55
to 64) ages with 11.86%.
It should be evident that this age group and adults between 45 and 54 are the only groups where
the TEA-Opportunity is not statistically superior to TEA-Necessity. This could be a potential
condition of vulnerability for older people in Ecuador, situation that is supported by the low level
of education of this segment of the population. While youth 18 to 24 years, the percentage of
people with education is a minority (2.9 %), the percentage of people without any education
level increases considerably in higher age groups, getting 24.6 % between the 55 to 64 years.
(Ecuador, 2012, p. 24)

According to the Global Report 2012, young people aged between 15 and 25 years represent
more than 60% of Africa’s total population and account for 45% (Africa, 2012, p. 59) of the total
labour force. In South Africa, the youth unemployment rate is 48% (Africa, 2012, p. 60).
Approximately one million young people left school at the end of 2012. While an additional
92,000 (Africa, 2012, p. 59)jobs in the formal sector were created in the last quarter of 2012, it is
clearly that in South Africa exists a big unemployment problem, especially they need to protect
teens. Young males have higher perceptions than young females where good business
opportunities and entrepreneurial capabilities are concerned, so they have to find solutions to
these things, too.

4. Devote a section of your paper to EDUCATION; compare and contrast education
statistics from both countries and show their impact on entrepreneurship.
Education is a very influence factor within any industry, further in entrepreneurship market. A
high quality education will change positively the self-confidence of people and as a result they
will be more self-awareness of their capacities, be more efficient and productive (Department for
Educational and Skills, 2006). Nations are constantly worried and consciences about refining
education because they want everybody have an opportunity to participate and work for an
improving in country’s economy.
GEM Ecuador 2012 report explains that “43% of entrepreneurs had their high school education
completed, while 42.4% had only the elementary education, and 6% of the entrepreneurs were
professionals” (Ecuador, p. 11). On the other hand, GEM South Africa 2012 report indicates that
among the persons who are involved in early-stage entrepreneurial activities were three kinds of
educational level: 2% completes primary school, 8% completed high school, 18% completed
university, and 20% completed other graduated programs, showing that there exist “a positive
correlation between early-stage entrepreneurs and level of education attained” (South Africa, p.
The statistics provided in both reports demonstrates that there exist any similarities in the
percentages of entrepreneurs’ educational level of Ecuador and South Africa. While more of
Ecuadorian entrepreneurs at least have completed high school, in South Africa more of the
entrepreneurs are professionals and have completes graduated programs. These reports show that
South Africa entrepreneurs are more train and prepared to face the professional world and start a
new business, while in Ecuador people that have had basic educational level and are not
professionals are the ones that have started a business and nowadays are the entrepreneurs of the
Ecuadorian entrepreneurs’ situation may occur because of the job necessities people with lack of
studies may have. The Ecuador report explain that as the level of education in people decreases,
the percentage of people who think that starting a business is a good career increases. For
example while the 92.5% of people who concluded primary school thought that a good option to
start a business, the 76.4% of professionals considered starting a business. According to the data,
it have been found that the proportion of underemployed and unemployed reduce to higher levels
of education, and these differences had maintain from 2007 (Ecuador, p. 47).

5. Using the graphing tool on the GEM consortium page, graph any 8 entrepreneurial
characteristics. Discuss these graphics in numerical terms.

The graphic of established business ownership shows percentages of populations that currently
owner a business and develop activities which concern the commerce world. Since 2004 Ecuador
tends to increase the percentages of business and between the years 2008-2009 the percentages
of people who own a business increase from 11.9% to 19.1%. However South Africa percentages
have increased very slowly, and in the same years as Ecuador increased, South Africa has
decreased from 2.3% to 1.4%.

This graphic shows the percentage of people who are currently starting a business and have not
realized activities of commerce. South Africa have maintained in a rank between 2.7% and 6.6%
and has been increasing and decreasing among the years. Meanwhile in the years 2004-2009
Ecuador has been decreasing enormously from 16.9% to 6.3%, but since 2009 the rate improves
and reaches 25.3% in 2013.

This graphic refers to the percentage of female population between 18 to 64 years old who are
either new entrepreneurs or owner of a new business. In the lap of years 2004-2008, while the
percentages of Ecuadorian female entrepreneurs drop from 24.4% to 15.9%, the South African
population increased 4.8% to 5.9%. However Ecuador could recover from the fail and from 2009
has increased hugely until 32.6% in 2013.

This graphic represents the percentage of early stage entrepreneurs who at least 25% of their
customers are from other countries. As the statistic shows, South Africa has more percentages of
national business which trade with international customers than Ecuador. South Africa has had
ups and downs among 2004-2013, but has maintained constantly international connections.
Since 2004 Ecuador has decreased surprisingly the percentages of other country customers
national business have, getting 0% in 2012, which says that even though Ecuador have more
entrepreneurs who have started business, the majority of its market is inside the country.

It is important to start a business with a new product which serves other target or necessities.
South Africa in 2002 had 89% of new products or services but the percentage drop dramatically
to 53% in one year, continue decreasing until 2006 to 44% and since then it had increased
slowly. Ecuador decrease dramatically the percentages between the years 2008-2009, from 45%
to 15%, but then it recovered and reached 66% in 2012.

Entrepreneurial intention graphic shows a huge difference in the statistics of both countries.
While Ecuadorians had improve from 31% to 51%, between years 2009 to 2012, the intentions to
start a business within three years; South Africans had maintained their percentages low the same
years as Ecuador had increased, but at least had risen its percentages slowly within the years.

As the graphic shows, Ecuadorians overcome South Africans who thinks entrepreneurship as a
good career choice with few percentages. Ecuador had been decreasing slowly since 2004, then
at 2009 increment its proportions and reach 88% in 2012, finally declining in one year to 66%.
Meanwhile South Africa had been increasing gradually, surpassing Ecuador statistic in 2013
with 74%.

This graphic shows the percentages of people who perceive good opportunities to begin a
business in the zone they live. Even though South Africa is below Ecuador’s statistics, this
country had been increasing the business opportunities they see, from 14% in 2002 to 38% in
2013. In the other hand, Ecuador tends to raise the business prospects since 2008, reaching 59%
in 2012.

6. Based on the statistics that you have reported on, explain which economy from which
country you would invest in as an entrepreneur.
Entrepreneurship is one subject that has developed among these years and the countries involved
are doing everything for trying constantly to improve the current market and business world
(Alsos & Westhead, 2008). Ecuador and South Africa had joined GEM Consortium with the
objective of exploring and measuring the impact entrepreneurial activities have in the economy
of each country. Among this research, there have been established differences between Ecuador
and South Africa. As the result show Ecuador has a great opportunity by progressing hugely in
its economy as the business world rises within the years, so it would be worth, as an
entrepreneur, to invest in Ecuador’s economy.
Graphics and statistics show the opportunity many investors have to finance many early stage
businesses Ecuadorian have started, comparing it to South Africa which percentages were lower.
This may be because of the necessities people suffer from in Ecuador, which take them to initiate
business while not having a professional career to perform. In the meantime South Africa’s
business owners are mostly professionals which have been driven by opportunities, but not
High statistics shown Ecuador has been refining its economy and it’s because of the effort of
people who had started a business even though mostly of their lack of educational high level.
What Ecuadorian entrepreneurs can upgrade is their relation with international customers. This
fact is important to accomplish the businesses objectives, to raise sales and to take action in
improving the economy.

Africa, S. (2012). Global Entreprenership Monitor - South Africa 2012.
Alsos, G. A., & Westhead, P. (2008). Habitual Entrepreneurs. Massachusetts: Now Publishers Inc.
Department for Educational and Skills. (2006). Further Education: Raising Skills, Improving Life Chances.
The Stationery Office.
Ecuador. (2012). Global Entreprenership Monitor - Ecuador 2012. Guayaquil: Senefelder.
Emprende Ecuador. (2011, Octubre 14). Retrieved from
Lasio, V., Caicedo, G., & Ordeñana, X. (2013). Global Entrepreneurship Monitor Ecuador 2012. Guayaquil:
Timm, S. (2013, April 26). Mail & Guardian . Retrieved from
Turton, N., & Herrington, M. (2012). Global Entrepreneurship Monitor 2012 South Africa. South Africa: