GEM main takeaways for 2023/2024; Credit: GEM / STATEC

On Tuesday 14 May 2024, Luxembourg's statistical institute, STATEC, highlighted the results of the Global Entrepreneurship Monitor (GEM).

As reported by STATEC, the Global Entrepreneurship Monitor Luxembourg Report 2023/2024 was presented on Tuesday 14 May 2024 at the "Entrepreneurship for Sustainability Workshop". The aim of this workshop was to gather leading actors in the European entrepreneurial ecosystem to discuss the evolving role of entrepreneurship, opportunities and challenges faced by entrepreneurs, as well as their role in sustainable development.

The GEM results showed that entrepreneurial activities in Luxembourg rebounded to pre-pandemic levels in 2023 and 2024, both in absolute numbers and compared to other European countries. However, recent data on business creation indicated a slowdown suggesting worsening expectations for the future.

In 2023, the share of residents actively involved in starting or running a new business increased to 9.7% from a historic low of 7% recorded in 2022. The proportion of Total Entrepreneurial Activity (TEA), referring to nascent and new entrepreneurs with less than 42 months of paid activity, was higher in Luxembourg (9.7%) than in other European countries (9.2%) in 2023. Despite these positive developments, some challenges may be ahead, cautioned STATEC. Recent register data indicate a slowdown in business creation, while GEM showed that business opportunities and growth expectations are worsening.

STATEC also highlighted some of the characteristics of entrepreneurs in Luxembourg, focusing on "innovation", "necessity" and the "entrepreneurship gender gap". Innovation: Luxembourg, a "strong innovator" according to the European Innovation Scoreboard, ranked first in terms of the proportion of new entrepreneurs having declared themselves innovative (40% in Luxembourg compared to 30% on average). Necessity: Luxembourg was found to have a considerable lower-than-average necessity-driven entrepreneurship; 47% of Luxembourg's entrepreneurs created a business due to a lack of available jobs compared to the EU average of 58%. Entrepreneurship gender gap: women were found to be less likely to engage in entrepreneurship; in 2023, the share of female entrepreneurs was 8.7% against 10.6% for men.

In terms of sustainability reporting, STATEC noted that several initiatives have been introduced in recent years to encourage businesses to adopt social and environmental practices. Furthermore, the Corporate Sustainability Reporting Directive (CSRD) now requires certain companies to publish detailed sustainability reports and disclose environmental, social and governance (ESG) information. GEM found that reporting of sustainability practices has been increasing among Luxembourg's firms: the percentage of firms reporting their sustainability practices online increased from 14.7% in 2014 to 21.4% in 2022.

Moreover, econometric analysis has suggested that there are no significant gender differences in engaging in sustainable practices among those who start new businesses. Immigrants (i.e. individuals not born in Luxembourg) were found to have a higher chance of starting a sustainable new business.

Since 2016, GEM Luxembourg has asked respondents to assess the strengths and weaknesses of the Luxembourg entrepreneurial ecosystem. Early-stage entrepreneurs in Luxembourg primary concerns appeared to be the availability of adequate office space (55% of entrepreneurs), funding (40%) and human resources (36%). These aspects have emerged as growing obstacles to entrepreneurial activity in the last survey wave, noted STATEC.

Launched in 1999, the GEM initiative is an international research programme focused on entrepreneurship. Since 2013, STATEC, in collaboration with Luxembourg's Ministry of the Economy and the Luxembourg Chamber of Commerce, has been conducting a specific survey among 2,000 residents aged eighteen to 64 years. According to STATEC, GEM provides information on the intensity and evolution of entrepreneurial activities, the profiles of entrepreneurs and the challenges they face.