Lithuanians are among the leaders in Europe in terms of the number of people who want to have a business as many as 71 per cent, AGER 2020 (Amway Global Entrepreneurship report) shows. However, the optimism that has been growing for many years has diminished due to the pandemic. “The uncertainty and insecurity brought because of COVID-19 has undermined people’s confidence and, at the same time, their desire to do business. This was especially evident in the older group, which has a harder time taming social networks and the sharing economy,” stated professor dr. Austė Kiškienė.
An associate professor at the KSU Center for Entrepreneurship and Innovation says that the pandemic has scared and brought insecurity, so interest in traditional business has fluctuated. In the Baltic States, it fell by two per cent, and in Lithuania – by as much as ten per cent.
“We often perceive traditional business as the implementation of big ideas that require capital and investment. The insecurity that prevailed during the pandemic has raised doubts, uncertainties in all areas of life, and business and investment are no exception. Even before the pandemic, AGER survey data showed that 45 per cent of global respondents cite raising capital as the most important barrier to becoming an entrepreneur. Fear of failure (33%) and concerns about return on investment within a reasonable time (31%) were also relevant. In the Baltic States, as well as in Lithuania, these figures are essentially the same. Therefore, it is not surprising that this uncertainty due to the pandemic could only increase,” said the professor.
However, A. Kiškienė also sees a positive side: at the beginning of the pandemic, the positive perception of those business models that require less investment or is less risky, for example, businesses based on the principles of sharing economy, opinion-forming influencers on social networks.
“The biggest positive attitude in society has been gained by creating a business, which practically does not require additional resources, except for the ones you have. For example, people have realized that they can use an existing car to deliver a parcel or just the free time that has arisen to provide a virtual consultation. People’s desire to do business has not decreased; perhaps the nature of the business itself has changed,” A. Kiškienė assured.
Great focus on e-commerce
While the traditional sales model remains a viable option among AGER survey respondents, opportunities such as e-commerce, direct selling and sales on social networks have generated the most interest.
“Comparing the results of the study before and after the pandemic, e-commerce in the Baltic States grew by 2%: from 63% who positively assessed it in 2019 up to 65 per cent 2020 in the summer. However, comparing the indicator of freelancing for the same period, it decreased by 2%, and in Lithuania – by as much as 10% (from 68% to 58%), as many may have started looking for stable sources of income,” – said the professor.
According to the AGER 2020 Entrepreneurship Survey report, 68 per cent of respondents worldwide cite the opportunity to work something they are passionate about as the most crucial advantage of being an entrepreneur. A similar result is mentioned in the Baltic countries. The opportunity to be one’s own boss (64%) and the opportunity to earn additional income (62%) are also highly valued. Respectively, in the Baltic States, these statements are estimated at 66% and 64%.
“However, if we compare the results of the study before and after the pandemic, the desire to do what inspires has fallen slightly. This is also related to the economic situation. In prosperous and developed countries, where living standards are high, self-realization is more often thought of. When the economic situation becomes more difficult, we start to evaluate our opportunities more critically and realistically, business becomes an important source of livelihood,” commented the KSU professor.
Despite the desire for business, we lack essential skills
Quarantine forced many people to acquire new skills if they wanted to remain competitive in the job market. Among the respondents in the Baltic States, more than half (51%) of the respondents believe that they have the necessary skills to start a business, but only 36% claim to have the resources required to do so. In Lithuania, the gap is even more comprehensive, from 48% up to 26% positively assessing their potential.
“This year’s report confirmed that the desire to start a business is declining as the population ages. Among the people of the Baltic States, 83 per cent of respondents under the age of 35 consider their business to be a desirable business opportunity, compared to 61 per cent people over the age of 35,” said the professor.
Although 67 per cent of the Baltic States respondents are optimistic about using social networks for business development, about a third believe that they have underdeveloped social networks to advertise and grow their business in them effectively. This is mainly observed in the results of older people.
“Interestingly, younger respondents also lack self-confidence in e-commerce. Although young people are familiar with social networks and influencer marketing, this knowledge is not enough to transfer the whole business to online channels. In some cases, it is necessary to re-create the final product completely. Therefore, challenges arise for both younger and older people,” said the entrepreneurial specialist.
Some 53 per cent of the Baltic States residents under the age of 35 agree with the statement that the best way to promote their business is through social networks, compared to those over the age of 35 (38 per cent).
About AGER Global Entrepreneurship Survey
2020 The AGER study has been conducted in 2019, from September to October. Part of the questionnaire was repeated after the first pandemic in the summer of 2020.
AGER 2020 is an online, quantitative survey using the Ipsos Global Omnibus. The data is based on surveys of almost 24,000 users from 23 countries. A total of 14 countries and about 12,000 respondents from European countries were interviewed: Lithuania, Latvia, Estonia, Romania, Ukraine, Czech Republic, France, Germany, UK, Hungary, Italy, Poland, Spain, Turkey. 1000 were interviewed in the Baltic States, 333 of them in Lithuania.