New evidence to promote entrepreneurship in Southeast Asia

April 26, 2016
Employment and Growth

Entrepreneurship has been a major driver of growth and job creation in Southeast Asia. But, until now, little empirical research had been carried out on entrepreneurial activity in the region.

A new report—the ASEAN Regional Entrepreneurship Report 2014/2015—addresses this gap, establishing a strong empirical foundation on which to build and monitor entrepreneurship and job creation, especially among women. It finds that Southeast Asia is one of the most entrepreneurial regions in the world.

With funding from IDRC, the report was formulated using the Global Entrepreneurship Monitor (GEM) methodology in Vietnam, Indonesia, and the Philippines. The authors also included Malaysia, Singapore, and Thailand in the study, and collected information for Laos, Cambodia, Myanmar, and Brunei from verified secondary sources.

A business-oriented region

The report provides a positive outlook on the ASEAN-6 region. One key finding of the report is that 66% of people in the region view entrepreneurship as a positive career choice, which surpasses the GEM global average of 62.5%.

Although the nascent entrepreneurship rate for the region is low (just 5% compared to 7.6% GEM average), it is offset by the fact that 10% of businesses are new: the second highest average for a region and almost double the GEM 2014 average. At 14.1%, the established business rate is the highest regional average and significantly above the GEM average of 8.4%.

More innovation needed in ASEAN

Of concern for the region is that the report shows only moderate levels of innovation. Just over half of ASEAN (Association of Southeast Asian Nations) entrepreneurs said their products/services are not new to customers. About 60% of businesses in the region believe there is high competition, which poses a significant challenge to business viability. In addition, few businesses are generating significant job numbers. The report found that more than half of entrepreneurs in the region expect that they will not generate jobs and 35% expect to create only between one and five jobs.

The project was coordinated by the School of Business and Entrepreneurship at the Universiti Tun Abdul Razak in Malaysia. The Vietnam Chamber of Commerce and Industry, De La Salle University in the Philippines, and Universitas Katolik Parahyangan in Indonesia, helped to implement the project. GEM's umbrella organization, the Global Entrepreneurship Research Association, provided technical assistance, oversight, and quality assurance.

The ASEAN entrepreneurship report was originally launched in Kuala Lumpur, Malaysia in November 2015. A Canadian launch will take place in Toronto on February 1 at Ryerson University, featuring co-author Prof Siri Roland Xavier of the University Tun Abdul Razak in Malaysia.

Read GEM's ASEAN Regional Entrepreneurship Report 2014-2015.

Learn more about the Promoting Entrepreneurship Research in Southeast Asia: Applying the Global Entrepreneurship Monitor project.

Learn more about the GEM methodology.​