Global Startup Activity Hits Record High
The Global Entrepreneurship Monitor (GEM) 2025/2026 report finds that global startup activity has reached record highs, but warns of two growing challenges: a widening gap in access to AI capabilities where AI-enabled startups have significant advantages, and an increasing "survival gap" as more ventures struggle to achieve sustainability. The report highlights that startups unable to leverage AI face steep competitive disadvantages in the current market.
## Global Startup Surge Accompanied by Widening Survival and Tech Gaps While entrepreneurial activity reaches unprecedented levels, the journey from a fledgling startup to an established business is becoming increasingly precarious. The GEM 2025/2026 report reveals a growing "survival gap," with a notable stall in the rate of new ventures making it past the 3.5-year mark. This trend highlights a critical challenge in the global entrepreneurial landscape, where starting a business is more common than sustaining one. A significant factor contributing to this survival disparity is the "AI readiness gap." Startups that effectively leverage artificial intelligence are demonstrating a considerable competitive advantage, with some data suggesting they achieve 2.5 times higher success rates and 40% greater productivity than their non-AI-adopting counterparts. This technological divide is creating a two-tiered entrepreneurial economy, where access to and implementation of AI are becoming critical determinants of long-term success. The United Arab Emirates has been ranked as the most supportive environment for new businesses for the fifth consecutive year, according to the National Entrepreneurship Context Index (NECI). Following the UAE, other countries that rank high in providing a favorable context for entrepreneurship include India, Lithuania, and Saudi Arabia. In Europe, Lithuania stands out as the leader in fostering a positive entrepreneurial ecosystem. Despite the challenges, there is a growing trend of purpose-driven entrepreneurship. An average of 84% of early-stage entrepreneurs now consider social and environmental impacts in their business decisions. This indicates a significant shift towards a more conscious and responsible approach to business, even as founders navigate an increasingly competitive and technologically demanding environment. However, significant structural barriers persist for many aspiring entrepreneurs. In 36 out of the 53 economies surveyed, both the availability and accessibility of entrepreneurial finance are rated as insufficient. Furthermore, entrepreneurship education at the school level remains a weak point, being the lowest-rated framework condition in 33 of the participating nations. The fear of failure remains a significant psychological hurdle, deterring two in five adults from starting a business. Interestingly, entrepreneurs who have previously exited a business are more likely to try again, suggesting that experience, even in failure, can foster resilience. A positive trend highlighted in the report is the advancement of gender parity in the startup world. Nine out of 23 emerging and middle-income markets are now at or near full gender parity in new startup activity. This marks a significant step towards a more inclusive and diverse global entrepreneurial landscape. The AI readiness gap is not uniform across the globe. High expectations for the role of AI in business are most prevalent in countries such as Angola, Brazil, Thailand, Costa Rica, Chile, and the United Arab Emirates. Conversely, entrepreneurs in Poland, Sweden, Finland, and Croatia have displayed lower expectations regarding the impact of AI on their ventures.
