Is Latin America and the Caribbean Truly Entrepreneurial? A Deep Dive into Regional Innovation and Business Ambitions
A new analysis by the World Bank, based on data from the Global Entrepreneurship Monitor (GEM), sheds light on one of the most important questions about the region’s economic future — Is Latin America and the Caribbean (LAC) truly entrepreneurial? The findings reveal that while the region demonstrates a strong desire and confidence to start businesses, challenges related to innovation, risk, and sustainability remain significant barriers.
High Entrepreneurial Intentions: A Region of Aspiring Founders
The data shows that 31% of adults in Latin America and the Caribbean express clear entrepreneurial intentions, compared to only 13% in OECD countries. This indicates a strong drive among people in the region to become business owners or innovators.
Such enthusiasm reflects a deeply rooted entrepreneurial culture — one often driven by necessity, creativity, and the desire for financial independence in economies where formal job opportunities may be limited.
Confidence and Capability: Strong Self-Belief in the Region
When it comes to perceived capabilities, the LAC region outperforms OECD nations significantly. Around 57.5% of adults in Latin America and the Caribbean believe they have the skills and knowledge needed to start a business, compared to 44.7% in OECD countries.
This high level of confidence is a critical ingredient for entrepreneurship. It suggests that many in the region not only dream of starting businesses but also feel capable of executing their ideas, despite challenges such as limited access to capital or infrastructure.
Opportunities vs. Challenges: The Perception Gap
The report also highlights that 48.7% of adults in the LAC region perceive good opportunities for entrepreneurship, compared to 40.1% in OECD countries. This positive outlook shows optimism and a belief in potential market openings.
However, this optimism coexists with a high fear of failure rate — 37.4% in LAC compared to 30.5% in OECD nations. Fear of business failure remains a major psychological and cultural barrier preventing many potential entrepreneurs from taking the next step. It reflects uncertainty in economic conditions, unstable policy environments, and limited safety nets for failed ventures.
Entrepreneurial Activity: Energy in the Early Stages
One of the most striking differences between LAC and OECD economies appears in total early-stage entrepreneurial activity. The LAC region records a rate of 18.4%, nearly double the OECD’s 10.8%. This means that a large portion of adults in Latin America are actively involved in starting or managing new ventures.
This vibrant startup culture, often concentrated in urban centers such as São Paulo, Mexico City, Bogotá, and Santiago, has become a major force for innovation, employment, and economic dynamism in the region.
Innovation and Employee Entrepreneurship: A Growing Gap
Despite the strong entrepreneurial spirit, the LAC region lags significantly behind in innovation-driven entrepreneurship and intrapreneurship (entrepreneurial employee activity). Only 1.3% of adults in LAC engage in entrepreneurial activity within existing organizations, compared to 5.4% in OECD economies.
Similarly, innovation levels are far lower — 14.2% in LAC compared to 29.6% in OECD nations. This indicates that while people in Latin America are starting businesses, fewer are creating groundbreaking products or technologies. Much of the entrepreneurship is replicative or necessity-driven, rather than innovation-driven.
This gap highlights a key challenge: fostering an ecosystem where creativity meets investment, technology, and policy support to turn ideas into sustainable enterprises.
Understanding the Entrepreneurial Landscape
The findings suggest that Latin America and the Caribbean possess a strong entrepreneurial foundation — characterized by ambition, confidence, and opportunity awareness — but need better systems to support innovation, reduce risk, and enhance business growth.
Common challenges include:
- Limited access to financing and venture capital
- High regulatory barriers and bureaucracy
- Weak infrastructure for innovation and technology
- Economic volatility and informal markets
Despite these issues, the region’s youth population, digital transformation, and growing startup ecosystem offer hope for the future. Initiatives like startup accelerators, fintech innovation hubs, and regional trade integration are already helping to reshape the entrepreneurial landscape.
Conclusion: Potential Waiting to Be Unlocked
Latin America and the Caribbean are undeniably entrepreneurial at heart. The region’s people are ambitious, capable, and ready to seize new opportunities. However, for this entrepreneurial spirit to translate into lasting economic growth, innovation and institutional support must catch up with enthusiasm.
As global markets shift toward technology and sustainability, the LAC region’s next big challenge will be turning entrepreneurial intentions into globally competitive, innovative enterprises.
If that transformation succeeds, Latin America and the Caribbean could emerge not just as a region of entrepreneurs — but as a global hub of innovation and economic resilience.
