The pandemic has wiped out 35% of closed businesses, although the proportion of closures is the second lowest in Spain
The crisis and the growing difficulty in finding a job in the labor market is the main reason that leads Murcians to start their own business. The need to “earn a living given the scarcity of other employment alternatives” appears in the latest report ‘GEM Emprender en Murcia’ as the main reason for 83% of Murcian entrepreneurs. The rate of entrepreneurs “out of necessity” already experienced a strong increase last year, when it reached 75%, no less than 35 points more than the year before the pandemic, when it fell to 40%.
The report reveals that the start-up of new businesses begins to recover the figures prior to the pandemic, and improves some of its main indicators. The entrepreneurship rate reached 4.1 in this latest study, four tenths more than in the previous report, when the data was weighed down by the effect of the pandemic. The rate is in any case lower than the national rate, which exceeds 5%.
The entrepreneurial process in the Region of Murcia
According to the GEM 2021 project
ENTREPRENEURIAL ACTIVITY
TOTAL (TEA): 4.1%
Entrepreneur
potential
got the idea
to undertake
Entrepreneur
nascent
Up to 3 months of activity
Owner of an activity
new
Up to 42 months of activity
Owner of an activity
consolidated
More than 42 months of activity
abandonment of the activity
business in the Region
That activity that has
abandoned have you followed
working
managed by others?
What was the main reason for abandoning this activity?
The company
it was not profitable
Source: GEM Murcia Report 2021-22. umu
The entrepreneurial process in the Region of Murcia
According to the GEM 2021 project
TOTAL ENTREPRENEURIAL ACTIVITY (TEA): 4.1%
Entrepreneur
potential
got the idea
to undertake
Entrepreneur
nascent
Up to 3 months of activity
Owner of an activity
new
Up to 42 months of activity
Owner of an activity
consolidated
More than 42 months of activity
Evolution of the TEA in the Region
Evolution of the Consolidated Activity Rate
Abandonment of business activity in the Region
Have you closed or closed an activity of
any type including self-employment
in the last 12 months?
POPULATION AGED 18-64
That activity that you have abandoned
have you kept running
managed by others?
What was the main reason
for the abandonment of that activity?
The company
it was not profitable
Source: GEM Murcia Report 2021-22. umu
Entrepreneurial activity recovers its tone, and in a certain way, optimism: the fear of failure is not a brake for the 60% of Murcians who launch their project, the survival of the projects started grows, and the number of closures 42 months after its implementation decreased slightly, to 1.4%. «The growth in the rate of entrepreneurs in the Region has its origin in the increase in nascent entrepreneurs, which indicates that many of the people who intended to do so have already taken their first steps. However, the crisis is noticeable in the decrease in new entrepreneurs, that is, those who run a company for up to 42 months,” said the director of the study and deputy director of the Entrepreneurs Chair at the University of Murcia, Alicia Rubio, on Monday.
The business closure rate, which refers to those who have closed the activity in the last twelve months, is lower than the average, and if refined by subtracting those who have transferred their business, it drops to 0.9. The pandemic is behind most closures: it is the main cause in 35% of business failures. Taxes, personal reasons, the opportunity to sell, and lack of profitability are the other causes of closure. The Region is the second autonomous region with the lowest proportion of closures, behind La Rioja.
The effect of the pandemic on the failure of new businesses has been much more impressive in the Region, warns the study, which points out that the situation caused by Covid-19 caused the closure of only 1.1% of businesses in Spain , “which shows that the Region was strongly affected by the pandemic.”
Less educated than average
The profile of the Murcian entrepreneur is drawing new figures: women stand out over men (they are 58%) of the rate of new entrepreneurs, although among consolidated companies, men are the majority. The educational level of the creators of new businesses improves, with a greater presence of university students than in previous editions among women. Despite this, Murcian entrepreneurs have training levels below the national average, in addition to having a significantly lower specific instruction to undertake. The rate of young entrepreneurship (between 18 and 24 years old) has increased by 50% compared to 2020, which places the Region above the Spanish average in this age group. Entrepreneurial activity has experienced greater growth among those with a low or medium income bracket.
The services sector concentrates the majority of new businesses, with 41.8% of the initiatives; commerce and final consumption have decreased with respect to the previous report, remaining in 35% of the projects. In more than 40% of the new initiatives, the project does not involve the generation of jobs. The percentage is better than the national average, which is 17%.
More innovative and international orientation
Consolidated companies that qualify as having a medium-high technological level exceed the national average in the Region, and therefore, “a superior innovative orientation is perceived.” Also the international character of the Murcian initiatives “is higher than the national average”, and greater “in the case of consolidated companies than in the case of recent initiatives”, stated the director of Info, Joaquín Gómez; the territorial director of Caixabank, Olga García; and the president of the Cajamurcia Foundation, Carlos Egea, who called for more training on entrepreneurial culture among schoolchildren during the act.
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