Puerto Rico

Region: LatAm and Caribbean
 

Classification of economies by geographic region is based on that of the United Nations Statistics Division.

High Income
 

Based on the income levels set out by the World Economic Forum (WEF) in its Global Competitiveness Report. However, the groupings are slightly different due to the numbers of economies covered. For GEM, the low income group contains both those classified as low income and lower middle by WEF, and the middle income group has those that WEF groups as upper middle. High income is the same for both GEM and WEF.

Population: 3 million (2018)
 

Population data is from the World Bank, except Palestinian Territories World Population Review and Taiwan Worldometers

GDP Growth: -2.4% (2017)
 

GDP growth data is from the World Economic Outlook Database, except Palestinian Territories Worldometers

GDP Per Capita: $31,581 (2017)
 

GDP per capita data is from the World Economic Outlook Database, except Palestinian Territories Worldometers

Entrepreneurial Behaviour and Attitudes

Most recent data: 2019
  • Puerto Rico 2019
  • Puerto Rico 2018
  • Global Average
  • Regional Average
  • Income Level Average

Self-Perceptions

  • 1
     
    Perceived Opportunities Rate:Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who see good opportunities to start a firm in the area where they live
  • 2
     
    Perceived Capabilities Rate:Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who believe they have the required skills and knowledge to start a business
  • 3
     
    Fear of Failure Rate*:Percentage of the 18–64 population who agree that they see good opportunities but would not start a business for fear it might fail. NOTE: this is a percentage of those seeing good opportunities, and not the total adult population
  • 4
     
    Entrepreneurial Intentions Rate:Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who are latent entrepreneurs and who intend to start a business within three years
  • 1. Perceived Opportunities Rate
  • 2. Perceived Capabilities Rate
  • 3. Fear of Failure Rate*
  • 4. Entrepreneurial Intentations Rate:

Activity

  • 1
     
    Total early-stage Entrepreneurial Activity (TEA):Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business
  • 2
     
    Established Business Ownership Rate:Percentage of 18-64 population who are currently an owner-manager of an established business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than 42 months
  • 3
     
    Entrepreneurial Employee Activity Rate:Rate of involvement of employees in entrepreneurial activities, such as developing or launching new goods or services, or setting up a new business unit, a new establishment or subsidiary
  • 1. Total early-stage Entrepreneurial Activity (TEA)
  • 2. Established Business Ownership Rate
  • 3. Entrepreneurial Employee Activity Rate

Motivations

  • 1
     
    Motivational Index:Percentage of those involved in TEA that are improvement-driven opportunity motivated, divided by the percentage of TEA that is necessity-motivated
  • 1. Motivational Index

Gender Equity

  • 1
     
    Female/Male TEA Ratio:Percentage of female 18-64 population who are either a nascent entrepreneur or owner-manager of a 'new business', divided by the equivalent percentage for their male counterparts
  • 2
     
    Female/Male Opportunity-Driven TEA Ratio:Percentage of those females involved in TEA who (i) claim to be driven by opportunity as opposed to finding no other option for work; and (ii) who indicate the main driver for being involved in this opportunity is being independent or increasing their income, rather than just maintaining their income, divided by the equivalent percentage for their male counterparts
  • 1. Female/Male TEA Ratio
  • 2. Female/Male Opportunity-Driven TEA Ratio

Impact

  • 1
     
    High Job Creation Expectation Rate:Percentage of those involved in TEA who expect to create 6 or more jobs in 5 years
  • 2
     
    Innovation Rate:Percentage of those involved in TEA who indicate that their product or service is new to at least some customers AND that few/no businesses offer the same product
  • 3
     
    Business Services Sector Rate:Percentage of those involved in TEA in the 'Business Services' sector - Information and Communication, Financial Intermediation and Real Estate, Professional Services or Administrative Services, as defined by the ISIC 4.0 Business Type Codebook
  • 1. High Job Creation Expectation Rate
  • 2. Innovation Rate
  • 3. Business Services Sector Rate

Societal Values

  • 1
     
    High Status to Successful Entrepreneurs Rate:Percentage of 18-64 population who agree with the statement that in their country, successful entrepreneurs receive high status
  • 2
     
    Entrepreneurship as a Good Career Choice Rate:Percentage of 18-64 population who agree with the statement that in their country, most people consider starting a business as a desirable career choice
  • 1. High Status to Successful Entrepreneurs Rate
  • 2. Entrepreneurship as a Good Career Choice Rate

Entrepreneurial Framework Conditions

Most recent data: 2019

Expert Ratings: 1 = highly insufficient, 5 = highly sufficient

  • Puerto Rico 2019
  • Puerto Rico 2018
  • Regional Average
  • Income Level Average
  • Global Average
  • Puerto Rico 2019
  • Puerto Rico 2018
  • Regional Average
  • Income Level Average
  • Global Average

2020 Framework Conditions Review 

Across most of Puerto Rico’s Framework Conditions, scores increased in 2020 compared to 2019. This is an encouraging sign; in absolute terms, however, in many cases Puerto Rico had been ranked quite low among GEM economies. So, the economy needs to continue this trend in order to stabilize conditions for entrepreneurs. For “Access to entrepreneurial finance” Puerto Rico’s score increased from 3.4 in 2019 to 3.6 in 2020, 34th among GEM economies: significantly below the United States (5.6), although close to Mexico’s score on this condition (3.8). Across the three government-related conditions, Puerto Rico’s scores improved overall, although these improvements still resulted in low rankings compared to other GEM economies. This is particularly true for the conditions “Government policy: support and relevance” and “Government policy: taxes and bureaucracy”, both of which received the lowest scores among GEM economies. Given these low scores, it is unfortunately unsurprising that experts evaluating the Puerto Rican government’s response to the pandemic awarded a score of 2.9, placing it 42nd among GEM economies: just above Mexico and the United States. 
For Puerto Rico, other areas of improvement compared to 2019 include educational conditions and professional infrastructure. For the condition “Entrepreneurial education at school” the score increased from 1.4 in 2019 to 1.7 in 2020, 43rd among GEM economies; while the condition “Entrepreneurial education post-school” went from 3.7 in 2019 to 4.2 in 2020. This disparity in scores suggests that formal education in Puerto Rico remains a challenge — likely dating back to the island’s recent hurricane disasters, which the pandemic has only exacerbated. However, relative to formal schooling, Puerto Rico’s post-school educational sector — as measured by the availability of continuing studies programs or vocational training — managed to improve despite the year’s challenges. Similarly, the condition “Commercial and professional infrastructure” improved from 3.8 in 2019 to 4.6 in 2020, placing it 39th among GEM economies, and suggesting that Puerto Rico’s recent spell of natural disasters and resulting economic difficulties has diminished this sector’s performance. However, it has since recovered somewhat, despite the pandemic. 
The most optimistic trends for Puerto Rico, however, can be seen in the social perceptions of entrepreneurs and their improved ability to operate in the market. Improvement in scores for these conditions appears to have a direct relationship with experts’ assessment of entrepreneurs’ response to the pandemic. For the condition “Social and cultural norms” experts’ scores increased significantly, from 3.6 in 2019 to 5.1 in 2020: 21st among all GEM economies. The condition “Ease of entry: market burdens and regulations” also increased, from 2.8 in 2019 to 3.6 in 2020 (36th overall). Yet this optimistic turn may have informed how experts perceived the entrepreneurial response to the pandemic: its 7.3 score placed it eighth among GEM participating economies.

Puerto Rico Reports

Name
Report information
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GEM Puerto Rico 2019
Report information
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  • Year of publication: 2019
  • Category: National Reports
  • Language: Spanish
  • Upload date: 2019-10-10

  • This report details the results of surveys conducted by the Global Entrepreneurship Monitor (GEM) in Puerto Rico in summer 2018. These surveys have been carried out continuously since 2013 in Puerto Rico, which allows us to better understand the transformations.

    Entrepreneurial activity in Puerto Rico has undergone substantial changes following Hurricanes Irma and Maria in September 2017. Although this event had serious consequences on economic activity in late 2017 and early 2018, it also brought new opportunities for entrepreneurs.

    The highlight in GEM Puerto Rico 2018 is the growth in the number of new enterprises: 2.6 percent of the population surveyed indicated that they have a new enterprise (firms for which salaries or wages have been paid at least for 3 months and began three years and a half ago or less, prior to the survey). Although the figure is still low when compared to other countries, it is higher than in 2017 (1.4%).

  • URL: https://www.gemconsortium.org/report/50316
 GEM Puerto Rico 2018
Report information
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GEM Puerto Rico 2017
Report information
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GEM Puerto Rico 2016
Report information
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Social Entrepreneurship in Puerto Rico GEM 2015
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