2023 POLICY ROADMAP

Romanian GDP growth looks set to have fallen to just over 1% in 2023, although capital inflows from the European Union funds are likely to boost growth in the near future. Inflation fell to 8%, with price pressures still challenging entrepreneurs. However, an increasing budget deficit led to new fiscal measures in the second half of 2023.

2023 Framework Conditions Review1

Romania’s overall entrepreneurial environment has been improving in recent years. In 2023, eight of
its 13 Entrepreneurial Framework Condition (EFC) scores increased, while four fell. Three have risen for two consecutive years: Government Entrepreneurial Programs, Research and Development Transfers, and Commercial and Professional Infrastructure. Like

in many economies, the Romanian entrepreneurial environment scored highest for its Physical Infrastructure (6.2) and lowest for Entrepreneurial Education at School (2.7).

In 2021, Romania had a National Entrepreneurial Context Index (NECI) score of 4.0 and was ranked 40th. By 2022, it had risen to 4.2 (36th) and reached 4.3 in 2023, placing Romania 31st among the 49 economies.

National experts assessed the quality of social support to women entrepreneurs and how their access to resources compared to men (new questions for 2023). These scores for Romania came in at 3.4 for social support (30th) and 4.5 for resources (37th), so there is much work to be done here.

2023 Entrepreneurial Activity Review

In 2023, two out of 10 adults in Romania reported that their household income had fallen, down from three in 10 a year earlier.

The percentage of adults who were starting or running a new business had been falling since 2021, and was just 5.9% recently, ranking Romania 38th of the 46 economies. Men were more likely than women to be new entrepreneurs (male rate 6.8%, female rate 4.9%). Established Business Ownership was also relatively low, at 5.1%, meaning just over one person started a new business for each running an established one.

The entrepreneurial profile in 2023 was fairly muted, with just under one in two adults knowing someone who had started a business recently. Just over one in two considered themselves to have the skills and experience to start their own business, with a similar proportion seeing good opportunities to start a business locally. However, three in five of those seeing good opportunities would not start a business for fear it might fail, the second highest proportion in Level B and fifth highest in GEM. One consequence was that entrepreneurial intentions were low, with just one in 20 adults not already doing so expecting to start a business in the next three years, about half of the level two years earlier and third lowest in GEM 2023 behind Poland and China.

Nine out of 10 new entrepreneurs agreed with the motivation to earn a living because jobs are scarce. Eight out of 10 agreed with the motivation to build great wealth or very high income. Just one in eight new entrepreneurs had customers outside of their country, while two in five expected to use more digital technology in the next six months.

A high rate of one in four new entrepreneurs expected to add at least another six jobs in the next five years. This is a strong number considering that more than two out of five are solo entrepreneurs. However, because the proportion of adults starting or running a new business was low, this high rate translates into less than 2% of adults in Romania being both new entrepreneurs and expecting to employ another six people or more over the next five years.

1 A brief description of the GEM approach is given in the footnote on p. 107.