Cypriots’ confidence with respect to the capabilities to initiate entrepreneurial activity has been reduced across the years, according to the recently-released Global Entrepreneurship Monitor (GEM) study.
Specifically, the study shows that this has dropped from 52.4% in 2016/2017 to 46.4% in 2017/2018 and to 45.9% in 2018/2019.
The study, carried out by the Centre for Entrepreneurship of the University of Cyprus, with the support and sponsorship of the Ministry of Energy, Commerce, and Industry, noted: “Fear of failure remains remarkably high as approximately one in two Cypriots fear failure with regards to entrepreneurial activity.”
And it added: “This has a direct impact on Cyprus’ Total Early-Stage Entrepreneurial Activity (TEA).”
The TEA index value recorded is the lowest across the last three years – 12% in 2016/2017 to 7.3% in 2017/2018 and 3.9% in 2018/2019. This is four points below the EU average which is 7.8%.
Compared to the previous years, nascent entrepreneurial activity has largely been reduced from 7.6% in 2016/2017, to 3.6% in 2017/2018 and 1.2% in 2018/2019.
Difficulties in accessing financial resources is one of the most important reasons of business exit. Increasing access to financial resources, especially for early-stage and high-risk entrepreneurial endeavours, is necessary for improving the country’s potential to compete in the international entrepreneurial arena, according to the study.
After all, Cyprus is shifting away from the years of financial recession, yet the results reveal that its entrepreneurial ecosystem is still affected.
As for the perceived capabilities value recorded in Cyprus in 2018/2019 this was slightly lower than the value recorded the year before.
More specifically, 52.4% of the population considered that they had the required skills and knowledge to initiate entrepreneurial activity in 2016/2017, whereas in 2017/2018 the corresponding value was 46.4% and in 2018/2019 the value was 45.9%.
The European average value for 2018/2019 was 43.8% and has been relatively stable across the years..
The slight reduction in the perceived capabilities index for Cyprus could be partly attributed to the increased media attention to entrepreneurship recorded in the last years, which may have contributed in raising awareness about the necessary skills and competences for entrepreneurship.
By Demetra Landou