Lebanon scores the highest in Total Early-stage Entrepreneurial Activity (TEA) in the MENA region and fourth out of 48 countries globally, according to the Global Entrepreneurship Monitor (GEM) 2018 report for Lebanon released this week.
The GEM report is prepared by international startup accelerator UK Lebanon Tech Hub (UKLTH), in partnership with the British Embassy in Beirut.
Its key findings include:
- Lebanon scored first for TEA ranking, new business ownership, and established business ownership.
- However, it ranked third for starting new businesses, and from 2015 to 2018, the proportion of adults starting new businesses in Lebanon decreased by 4%.
- Lebanon ranked second globally on both the ratio of running a new business and that of running an established business: one in six adults in Lebanon were running a new business; one in five were running an established business.
- Two-thirds of those starting or running a new business in Lebanon in 2018 claimed to be seizing a business opportunity, with just one third claiming to be driven by necessity.
- More than one in six women in Lebanon were starting or running a new business, compared to one in ten in the UAE and one in 20 in Egypt.
- More than 30% of people aged 25-34 in Lebanon started a new business, compared to 17% of the same age group in Turkey (second highest in MENA).
- Lebanon ranked third globally for social and cultural Norms and 10th for Entrepreneurial Education (especially at school level).
It is also worth noting that the lowest TEA rates are obtained by high-income European countries, while high TEA levels spread out in low-income Angola (40.8%), middle-income Guatemala (27.5%) and Lebanon (24.8%), as well as high-income Chile (25.06%).
Moreover, the report highlights that Lebanon’s “open and supportive culture” was the chief factor for promoting entrepreneurial performance in 2018. But the country scored poorly on market openness (54th), government policy support (46th) and physical infrastructure (47th). The lack of early-stage finance and the cost/unreliability of the infrastructure/Internet were the major constraints on entrepreneurial activity in 2018, according to national experts who recommend more government support.
“Lebanon is undoubtedly entrepreneurial, but consecutive years of high levels of TEA have not yet led to a blossoming of employment opportunities or significant growth in real incomes. It is hard to avoid the conclusion that the impact of new businesses being started in Lebanon is not being translated into economic growth and job opportunities in the country,” says UKLTH in its announcement.