TALLINN - Estonian people actively create their own companies but, as compared to other European states, less than half of these new start-up companies survive, reports Postimees Online citing an entrepreneurship study by the Development Fund and local scientists.
“The ratio between early stage and established entrepreneurs in Estonia is by a half lower than the survival rate of companies in Europe’s developed states,” said Development Fund head Tonis Arro, citing the data of a GEM entrepreneurship monitoring global report.
The background for the high interest by Estonians to start companies is their evaluation of business opportunities, their own business knowledge and skills, but not the need to start a company. “Estonian entrepreneurs are characterized by low ambitions – expectations for the growth of business are below, for example, the growth expectations of Latvian, Lithuanian, Romanian and Irish entrepreneurs,” said Arro.
The reason why entrepreneurship often fails is a low profitability of the businesses, personal reasons and the move to find a high-paid job. The main factors hindering entrepreneurship are inadequacy of entrepreneurship knowledge and skills, the low focus of education on creativity and initiative, an inadequate transition of knowledge from academia to business, and negative attitudes towards entrepreneurs in the society.
Estonia was included in the annual international Global Entrepreneurship Monitor (GEM) study for the first time last year.