Business creation suffered in pandemic, women disadvantaged


Early-stage entrepreneurial activity by women dropped by 40% in 2020. Photo: Shutterstock 

Fewer people started businesses in Luxembourg last year as a result of the pandemic, with the share of early-stage entrepreneurial activity by women falling 40%. 

The results of the latest Global Entrepreneurship Monitor (GEM) showed that the number of people who thought that there were good opportunities to start a business dropped from 58% in 2019 to 42% last year.

The results for Luxembourg compared to a drop from 52% to 40% across Europe. The data is based on representative surveys of the population.

“The share of individuals who tried to start a business dropped to 9%, from 15% in 2019,” said Serge Allegrezza, the director of national statistics office Statec, during a press conference on Friday.

It is one of the biggest drops in Europe, but small and medium-sized enterprises minister Lex Delles didn’t appear too worried about the result. During the first five months of 2020, business creation was up 20% compared to 2019.

“It’s very encouraging, a strong recovery with residents launching into entrepreneurship,” he said.

A reform of laws to set up a business in Luxembourg should help provide further relief as it foresees more leniency to entrepreneurs founding a business after failing in a previous venture. “There were still exchanges with the Chamber of Skilled Trades and Crafts. The text is being written and will be introduced [in parliament] this year,” Delles said.

Also before the end of the year, the minister wants to introduce new financial aid for business creation. “The prime minister already announced it during his speech on the state of the nation. We are working on an aid programme for business creation. The aim is to support the entrepreneur in their first steps, financially as well on matters of training,” Delles said.

Family obligations

But the crisis didn’t affect all entrepreneurs equally. Early-stage entrepreneurial activity by women decreased by 40%, compared to around just 9% for men.

“It’s a general problem of entrepreneurship to begin with. During the crisis, women with children put children first at the height of the crisis and without a doubt postponed business creation plans,” Allegrezza said.

The House of Entrepreneurship also observed this trend. “We spoke quite a bit with [female] project leaders who stopped their support progamme because of the pandemic,” said Guylaine Bouquet-Hanus, business manager at the organisation, which supports business founders.

“The reasons are manifold, but often, the support programme is scheduled at hours difficult to manage for women, who often work in parallel, in addition to family conditions. With teleworking and numerous changes related to the pandemic, it wasn’t necessarily easy to do everything in parallel.”

The problem of working in parallel to founding a business affects both male and female entrepreneurs, Bouquet-Hanus said. In a more difficult financial situation, “women may also have been less daring to take the plunge in a period that was more economically critical, and they preferred to prioritise security and the need to maintain an income.”

This story was first published in French on Paperjam. It has been translated and edited for Delano.