gem 2006 global results summary v2
TRANSCRIPT
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GEM TEAMS AND SPONSORS: 2006
GLOBAL ENTREPRENEURSHIP MONITOR
GEM 2006 Summary Results
Niels Bosma and Rebecca Harding
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2GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
Global EntrEprEnEurshipGEM 2006 SUMMARy RESULTS
Niels BosmaRebecca Harding
FOUNDING AND SPONSORING INSTITUTIONS
Babson College, Babson Park. MA. USALondon Business School. London. UK
Although GEM data were used in the preparation of this report, theirinterpretation and use are the sole responsibilit of the authors.
2007 b Niels Bosma, Rebecca Harding, Babson College and London Business School
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.0 Introduction 5
2.0 Entrepreneurship and Economic Development 0
3.0 Characteristics of Entrepreneurial Activit 5
4.0 Teams, Institutions, Sponsors 24
ContEnts
3CONTENTS
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INTRODUCTION
The Global Entrepreneurship Monitor (GEM)cross-national assessment of entrepreneurialactivit is now in its eighth ccle. Started in999, with ten participating countries, theproject has expanded to include 42 countriesin 2006.
GEM is a major research project aimed atdescribing and analsing entrepreneurialprocesses within a wide range of countries.In particular, GEM focuses on three mainobjectives:
To measure differences in the level ofentrepreneurial activit between countries.
To uncover factors determining the levelsof entrepreneurial activit.
To identif policies that ma enhance thelevel of entrepreneurial activit.
To this end, the project has from the start,been designed as a multinational researchprogramme providing annual assessmentsof the entrepreneurial sector for a range of
countries.
GEMs contribution to the knowledge andunderstanding of the entrepreneurial process
is unique since, to date, no other data setexists that can provide consistent cross-countr information and measurements ofentrepreneurial activit in a global context.
Information about GEM and all GEMdocuments can be found at www.gemconsortium.org.
1 GEMs research methodology andprocedures are described in Reynolds,P.D., N. Bosma, E. Au tio, S. Hunt,N. DeBono, I. Servais, P. Lopez-Garcia and N. Chin (2005), GlobalEntrepreneurship Monitor: DataCollection Design and Implementation19982003, Small Business Economi24: 205231
5INTRODUCTION
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6GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
EARLy-STAGE ENTREPRENEURIALACTIVITy AND ESTABLISHEDBUSINESS OWNERSHIPGEM estimates the level of involvementin earl-stage entrepreneurial activit bcombining the prevalence rate of nascententrepreneurs (people in the process ofstarting a new business) and new businessowners.
Nascent entrepreneurs are thoseindividuals, between the ages of 8 and64 ears, who have taken some action
towards creating a new business inthe past ear. In order to qualif in thiscategor, these individuals must alsoexpect to own a share of the business theare starting and the business must nothave paid an wages or salaries for morethan three months.
New business owners are individuals whoare active as owner-managers of a newbusiness that has paid wages or salariesfor more than three months, but less than
42 months.In addition to those individuals who arecurrentl involved in the earl-stages of abusiness, there are also man individualswho have owned and managed a businessfor a longer time. These individuals areincluded in GEMs estimates of the number ofestablished business owners. Specificall, thepercent of individuals in a population whoowns and manages a business that has paidwages or salaries for more than 42 months.
These two measurements are both verimportant, as the conve differentinformation about the entrepreneuriallandscape of a countr. Earl-stageentrepreneurship indicates the dnamicentrepreneurial propensit of a countr. Inother words, it shows the percentage of thepopulation willing and able to undertake anentrepreneurial venture. Established business
ownership, instead, indicates the percentagof the population activel involved in runnin
businesses that proved to be sustainable.The estimates of the measurements discussehere, are presented in Table for all 42countries involved in GEM 2006.
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NAS
CENT
ENTREPRENEURIAL
ACT
IVITy
NEW
BUSINESS
OW
NERS
EARLy-STAGE
ENTREPRENEURIAL
ACT
IVITy(TEA)*
ESTA
BLISHED
BUSINESS
OW
NERS
NUM
BEROF
RESP
ONDENTS
8-6
4yEARS
Argentina 6.4% 4.% 0.2% 7.0% ,755
Australia 7.3% 5.7% 2.0% 9.% ,97
Belgium .8% .% 2.7% 2.% 2,00
Brazil 3.5% 8.6% .7% 2.% 2,000
Canada 4.% 3.2% 7.% 5.% ,697
Chile 5.7% 3.9% 9.2% 6.8% 2,007
China 6.7% 0.5% 6.2% 9.0% 2,399
Colombia 0.9% 2.6% 22.5% 0.4% 2,000
Croatia 6.4% 2.5% 8.6% 4.% ,549
Czech Republic 6.4% 2.0% 7.9% 5.4% ,628
Denmark 2.9% 2.8% 5.3% 5.3% 0,000
Finland 2.9% 2.4% 5.0% 8.2% 2,005
France 3.8% 0.7% 4.4% .3% ,59
German 2.9% .7% 4.2% 3.0% 4,049
Greece 5.7% 2.3% 7.9% 8.2% 2,000
Hungar 3.2% 3.0% 6.0% 6.7% 2,500
Iceland 8.% 3.8% .3% 7.4% 2,00
India 5.4% 5.3% 0.4% 5.6% ,96
Indonesia 9.6% .5% 9.3% 7.6% ,998
Ireland 4.5% 2.9% 7.4% 7.8% ,96
Ital 2.2% .4% 3.5% 3.0% ,626
Jamaica .6% 9.2% 20.3% 0.3% 3,554
Japan .6% .4% 2.9% 4.8% ,923
Latvia 4.0% 2.7% 6.6% 5.7% ,958
Malasia 4.9% 6.2% .% 7.3% 2,005
Mexico 4.% .2% 5.3% 2.3% ,839
Netherlands 3.6% .9% 5.4% 6.6% 2,685
Norwa 5.3% 4.3% 9.% 6.0% ,503
Peru 30.0% 5.% 40.2% 2.4% ,845
Philippines 5.0% 5.6% 20.4% 9.7% 2,000
Russia 3.5% .7% 4.9% .2% ,894
Singapore 2.7% 2.5% 4.9% 3.4% 3,883
Slovenia 2.9% .8% 4.6% 4.4% 3,008
South Africa 3.6% .7% 5.3% .7% 2,684
Spain 3.0% 4.4% 7.3% 5.5% 28,306
Sweden 2.2% .4% 3.5% 5.0% ,747
Thailand 4.% .5% 5.2% 7.4% 2,000
Turke 2.2% 4.0% 6.% .5% 2,47
United Arab Emirates .7% 2.2% 3.7% .4% ,903
United Kingdom 3.2% 2.8% 5.8% 5.4% 34,896
United States 7.5% 3.3% 0.0% 5.4% 2,325
Urugua 8.4% 4.6% 2.6% 6.9% ,68
Table 1 - Prevalence rates ofentrepreneurial activit across
countries in 2006 (in percentagof adult population 8-64)
* Earl stage entrepreneurial activitincludes nascent entrepreneurialactivit and new business owners.Some respondents are involved in bothnascent entrepreneurial activit and nebusiness ownership, hence the result thearl-stage entrepreneurial activit ratare generall lower than the sum of bocomponents.
7INTRODUCTION
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8GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
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9GEM TEAMS AND SPONSORS: 2006
2.0ENTREPRENEURSHIP AND
ECONOMIC DEVELOPMENT
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0GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
ENTREPRENEURSHIP AND PERCAPITA GDP LEVELS
A sstematic relationship exists between acountrs level of economic development andits level and tpe of entrepreneurial activit.Countries with similar per capita GDP tendto exhibit similar levels of entrepreneurialactivit, while significant differences exist acrosscountries with different per capita GDP levels.
At low levels of per capita GDP, industrialstructure is characterised b the prevalenceof man ver small enterprises. As per
capita income increases, industrialisationand economies of scale allow larger andestablished firms to satisf the increasingdemand of growing markets and to increasetheir relative role in the econom. Thisincrease in the role of large firms is usuallaccompanied b a reduction in the numberof new enterprises, since a growing numberof people find stable emploment in largeindustrial plants. As further increases inincome are experienced, however, therole plaed b the entrepreneurial sectorincreases again, as more individualshave the resources to go into business forthemselves in an economic environment thatallows the exploitation of opportunities. Inhigh income economies, through a growingservices sector, enhanced differentiationof consumer wants and acceleratedtechnolog development, entrepreneurialbusinesses enjo a newl found competitiveadvantage. Of course, the rate of aggregateentrepreneurial activit also depends on
the demographic, cultural and institutionalcharacteristics of each countr.
Regardless of the level of development, andfirm size, entrepreneurial behaviour remainsa crucial engine of innovation and growth forthe econom and for individual companiessince, b definition, it implies attention andwillingness to take advantage of unexploitedopportunities.
Consistentl with the previous analsis, Figu shows that:
Earl-stage entrepreneurial activit isgenerall higher in those countries withlower levels of GDP.
Earl-stage entrepreneurial activit isrelativel low in high income countries,especiall for the core countries of theEuropean Union and Japan.
Countries with highest levels of GDP shoincreasing earl-stage entrepreneurialactivit suggesting a new increase in
opportunit related entrepreneurship.Figure illustrates the association betweenentrepreneurship and the level of economicdevelopment outlined earlier. However, thiscross-sectional approach does not implan specific causal relationships betweenentrepreneurial activit and economicdevelopment.
Figure 2 shows earl-stage entrepreneurialactivit across GEM countries in 2006.
There are wide variations in prevalencerates, although over the ears, GEM datahave shown these variations across countrieto be relativel stable.
Earl-stage entrepreneurial activit ishighest in Peru at 40.2%, and lowest inBelgium at 2.7%.
The vertical bars indicate the confidenceintervals (95%) of GEM estimates.Countries whose confidence intervalsoverlap do not differ from one another ina statisticall significant manner.
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0%
5%
10%
15%
20%
25%
0 10,000 20,000 30,000 40,000 50,000
Percentageofpopulationbetween18-64years
involvedinearly-stageentrepreneurialactivity
GDP per Capita 2006, in Power Purchasing Parities (PPP)
Early-stage Entrepreurial Activity (TEA rate) 2006TEA rate United Arab EmiratesFitted 3rd order polynomial - Arab Emirates and Peru excluded
Note: Peru not shown in this graph Estimated parameters fitted trendline:y = -4E-15x3 + 5E-10x2 - 2E-05x + 0.2466
R2 = 0.58
JA PHCO
ID
CN
TH
UY
MY
AR
HR
BR
IN
CL
TRMX
RU
SA
LV CZ
HU
GR
SI
AU
CA
IS
US
NO
IE
DK
BEJP
SEDE
FINL
UK
ES
SGFR
IT AE
Fig. 1 - Earl-StageEntrepreneurial Activit Rates
and GDP per Capita, 2006Note: GDP levels were taken from theIMFs World Economic Outlook Databa(October 2006)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Percen
tageo
fpopula
tion
be
tween
18-64
years
invo
lve
dinearly-s
tageen
trepreneur
ialac
tivity
Be
lgium
Japan
Swe
denItaly
U.
Ara
bEm
ira
tes
Germany
France
Slovenia
Singapore
Russia
Finland
Mexico
Sout
hAfrica
Denmark
Ne
therlandsUK
Hungary
Turkey
Latvia
Cana
da
Spain
Ire
land
Czech
Repub
lic
Greece
Croatia
Norway
ChileU
SA
Argent
inaIndia
Ma
lays
ia
Ice
land
Brazil
Aus
tralia
Uraguay
Tha
iland
China
Indonesia
Jama
ica
Philipp
ines
Co
lom
biaPeru
Fig. 2 - Earl-StageEntrepreneurial Activit b
Countr, 2006
ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT
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2GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
Fig. 3 - Established BusinessOwnership b Countr, 2006
Percentageofpopulationbetween18-64year
s
involvedinestablishedbusinessownership
0%
5%
10%
15%
20%
25%
Russia
France
UnitedArabEmirates
SouthAfrica
Belgium
MexicoItaly
Germany
Singapore
Croatia
Slovenia
Japan
Sweden
Canada
DenmarkUK
CzechRepublic
USA
Spain
India
Latvia
Norway
Netherlands
Hungary
Chile
Uraguay
Argentina
Malaysia
Iceland
Ireland
Finland
Greece
China
Australia
Jamaica
Colombia
Turkey
Brazil
Peru
Thailand
Indonesia
Figure 3 shows the prevalence rates ofestablished business owners across GEMcountries in 2006.
Countries with higher earl-stageentrepreneurial activit also tend to havehigher prevalence rates of establishedbusiness ownership. For example, thePhilippines have the highest establishedbusiness ownership at 9.7% and thirdhighest earl-stage entrepreneurialactivit at 20.4%. Belgium, on the otherhand, has the lowest rate of earl-stageentrepreneurial activit and the fifth lowestrate of established business ownership.
There are some exceptions to this generalpattern. For instance, the United Stateshave an established business rate, whichis comparable to those of man Europeancountries and Japan, whereas figure 2showed that earl-stage entrepreneurialactivit is higher in the United States.
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2 These countries have per capita (PPPGDP lower than USD $20,000. In 200their average per capita (PPP) GDP isUSD $10,367 and their average realGDP growth (2005) equals 5.4%.
3 These countries have per capita (PPPGDP higher than USD $20,000. In2006, their average per capita (PPP)GDP is USD $34,139 and their averagreal GDP growth (2005) equals 3.5%.
HIGH INCOME VERSUS MIDDLEINCOME COUNTRIES
Given the established association betweenentrepreneurial activit and per capita GDPlevels, countries that participated in theGEM stud in 2006 can be divided into twogroups, based on their per capita GDP.
Middle Income Countries2
Argentina, Brazil, Chile, China, Colombia,Croatia, Czech Republic, Hungar, India,Indonesia, Jamaica, Latvia, Malasia,Mexico, Peru, Philippines, Thailand, Turke,
Russia, South Africa, Urugua.
High Income Countries3
Australia, Belgium, Canada, Denmark,Finland, France, German, Greece, Iceland,Ireland, Ital, Japan, Netherlands, Norwa,Singapore, Slovenia, Spain, Sweden, UnitedArab Emirates, United Kingdom, UnitedStates.
As suggested b figures 2 and 3, middleincome countries lead in both earl-stage
entrepreneurial activit and the rate ofestablished business ownership. Thedifferences in prevalence rates betweenthe two countr groups are statisticallsignificant at above 99% confidence level.
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3.0CHARACTERISTICS OF ENTREPRENEURIAL ACTIVITy
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MOTIVATION
The GEM surve allows for differentiationaccording to the reasons that motivateentrepreneurial behaviour. In the GEMframework, individuals start a businessfor two main reasons:
The want to exploit a perceivedbusiness opportunit (opportunitentrepreneurs).
The are pushed into entrepreneurshipbecause all other options for workare either absent or unsatisfactor
(necessit entrepreneurs).
The vast majorit of earl-stageentrepreneurs across the world claim thatthe are attempting to take advantageof a business opportunit. yet, figure 4shows that there is also variation acrosscountries in the balance of start-upmotives. Overall, the results show thatnecessit entrepreneurship is relativelmore common in middle income countriesthan in high income countries.
In the group of middle income countries,the lowest percentages of opportunit-
driven earl-stage entrepreneurialactivit are found in Croatia, Brazil andthe Philippines at around 50%. At theother end, about 90% of Malasias andIndonesias earl-stage entrepreneursreport to be driven b opportunit.
There is also wide variation in the groupof high income countries. The highestpercentages of opportunit-driven earl-stage entrepreneurial activit are found inDenmark, Norwa and the Netherlands
(all higher than 90%). German, Franceand Greece have much lower sharesof opportunit-driven earl-stageentrepreneurs at about 60%.
Figure. 4 - Opportunitto Necessit Earl-StageEntrepreneurship
Croatia
Brazil
Philippines
China
Turkey
Colombia
Uruguay
Jamaica
India
Mexico
SouthAfrica
Thailand
CzechRepublic
Russia
Chile
Argentina
Peru
Hungary
Latvia
Indonesia
Malaysia
Germany
France
Greece
Finland
Italy
ArabEmirates
UK
USA
Spain
Canada
Ireland
Japan
Singapore
Belgium
Iceland
Sweden
Slovenia
Australia
Netherlands
Norway
Denmark
%respondentsinvolvedin
e
arly-stageentrepreneurialactivity
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
High income countriesMiddle income countries
Opportunity motive Necessity motives Other
5CHARACTERISTICS OF ENTREPRENEURIAL ACTIVITy
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INNOVATIVENESS
B increasing the competitive offering ofnew products and services, entrepreneurscontribute towards greater market efficienc.In addition, man entrepreneurs areimportant agents of innovation. To measureinnovativeness, GEM asked entrepreneursand business owners how the evaluatethe newness of their product or service, thecompetition the face, and the novelt oftheir product or service technolog. Becausethe represent individual entrepreneursperceptions of their own situation, suchassessments are inevitabl context-specific,and the are likel to var betweencountries.
Figure 5 compares the newness of theproducts and services among earl-stage
entrepreneurs and established businessowners in the two countr groups. Thepattern is ver similar for both groups: themajorit of businesses are offering productsor services that are not new to customers,and onl a small fraction claim that whatthe offer is new to all customers.
In middle income countries, earl-stageentrepreneurs are somewhat more likel(9%) to sa that their product is new toall customers than those in high income
countries (5%).
52% of earl-stage entrepreneurs inmiddle income countries and 56% ofearl-stage entrepreneurs in high incomecountries did not consider their product tbe new to their customers.
Figure. 5 - Newness ofProducts b Countr Group,2006
%
respondentsinvolvedin
establishedbusinessownership
Product new to how many customers?
0
10
20
30
40
50
60
70
80
All Some None
Middle income countries High income countries
%r
espondentsinvolve
d
in
early-stage
entrepreneuria
lactivity
Product new to how many customers?
0
10
20
30
40
5060
70
80
All Some None
Middle income countries High income countries
Earl-stage entrepreneurialactivit
Established business ownership
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Similarl, established business owners inmiddle income countries were more likel
to sa that their product was new to allcustomers (6%) than established businessowners in high income countries (9%).
In high income countries, establishedbusiness owners are more likel than theircounterparts in middle income countries toview their product as new to none of theircustomers (7% compared to 62%).
The proportion of established businessowners who believe to have an innovative
product is significantl lower than therelated percentage of earl-stageentrepreneurs.
Figure 6 shows that most entrepreneurs alsosa that the expect to face man competitorsin their markets. Established business ownersin the two countr groups show no significantdifference in their evaluation of the degree ofcompetition the face.
Regardless of countr group, about halfof earl-stage entrepreneurs expect man
competitors (5% in high income countriesand 57% in middle income countries).
Onl % of earl-stage entrepreneurs inhigh income countries and 9% in middleincome countries expected to have nocompetitors.
In the middle income countr cluster,established business owners are morelikel to sa that the have mancompetitors compared to their high income
counterparts (70% compared to 63%).Onl 6% of established business ownersin both middle income countries and highincome countries claim that there areno other businesses offering the sameproduct.
A third important indicator of theinnovativeness of a business comprises thetechnologies and productive processes it
uses. Figure 7 shows significant differencesin the use of new technologies between high
and middle income countr groups.
In both countr groups, the percentage ofestablished business owners claiming thattheir technolog is not new is significantlhigher than the comparable percentage ofearl-stage entrepreneurs.
Earl-stage entrepreneurs in middleincome countries are substantiall morelikel to use new technologies than theircounterparts in high income countries.
Depending on levels of development, atechnolog considered new in a middleincome countr ma not be considered asnew in a high income countr.
In middle income countries, 6% ofearl-stage entrepreneurs claimed thatthe used the ver latest technolog (notavailable a ear ago) and 22% claimedthe used new technolog (available for-5 ears). In high income countries, thesefigures are 7% and 8% respectivel.
SECTORAL DISTRIBUTIONIn order to analse the sectors in whichpeople attempt to start businesses andcompare their distribution with those ofestablished business, GEM codes activitaccording to the International Standardof Industrial Classification of All EconomicActivities (ISIC). Figure 8 shows that thelargest share of earl-stage entrepreneursand established business owners are active
in consumer oriented activities (where theprimar customer is a phsical person e.g.retail, restaurants and bars, lodging, health,education, social services, recreation),followed b transformation (construction,manufacturing, transportation, and wholesaledistribution) business services (where theprimar customer is another business), andextractive activities (extraction of productsfrom the natural environment).
7CHARACTERISTICS OF ENTREPRENEURIAL ACTIVITy
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Figure. 6 - Expected Number ofCompetitors b Countr Group,
2006
%r
espondentsinvolved
in
early-stage
entrepreneurialactivity
How many businesses offer the same product
0
10
20
30
40
50
60
70
80
Many Few None
Middle income countries High income countries
%
respondentsinvolvedin
establishedbusinessownership
How many businesses offer the same product
0
10
20
30
40
50
60
70
80
Many Few None
Middle income countries High income countries
Figure. 7 - Newness of
Technolog b Countr IncomeGrouping, 2006
%r
espondentsinvolved
in
early-stage
entrepreneurialactivity
How new are the used technologies or procedures
0
10
20
30
40
50
60
7080
Very latest technology New technology (1 to 5 years) No new technology
Middle income countries High income countries
%
respondentsinvolvedin
establishedbusinessownership
How new are the used technologies or procedures
0
10
20
30
40
50
60
70
80
Very latest technology New technology (1 to 5 years) No new technology
Middle income countries High income countries
Earl-stage entrepreneurialactivit
Established business ownership
Earl-stage entrepreneurialactivit
Established business ownership
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Earl-stage entrepreneurs in high incomecountries are much more likel to be
found in the business services sector thanthose in middle income countries (25%zd to 9%). The pattern for establishedbusiness ownership is ver similar; earl-stage entrepreneurs in middle incomecountries are more likel to sell theirproducts directl to the consumer. In otherwords, figure 8 confirms that there is morebusiness-to-business trade in high incomecountries.
For both countr groups the share ofearl-stage entrepreneurs who are active
in extractive sectors is significantl lowerthan the share of established businessowners who are active in extractivesectors.
Figure. 8 - Sectoral Distributioof Entrepreneurial Activit b
Countr Clusters, 2006
Sector distribution
Percent of respondents involved inestablished business ownership
0 10 20 30 40 50 60
Extractive
Transforming
Business Services
Consumer oriented
Middle income countries High income countries
Sector distribution
Percent of respondents involved inearly-stage entrepreneurial activity
0 10 20 30 40 50 60
Extractive
Transforming
Business Services
Consumer oriented
Middle income countries High income countries
9CHARACTERISTICS OF ENTREPRENEURIAL ACTIVITy
Earl-stage entrepreneurialactivit
Established business ownership
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20GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
ENTREPRENEURIALDEMOGRAPHICS
Scholars of entrepreneurship in a varietof disciplines agree that age, gender, workstatus, education, income, and perceptionsare all significant socio-economic factors in apersons decision to start a business.
Age
The age distribution of earl-stageentrepreneurs is comparable betweenhigh income countries and middle incomecountries. In particular, earl-stageentrepreneurial activit is most prevalent in theage group of individuals 25-34 ears old, andleast prevalent in the 55-64 ear old group.
The age distribution of established businessowners is also comparable between the two-countr groups. On average, establishedbusiness owners are older than earl-stageentrepreneurs. Respondents aged 45-54ears old in both the middle and highincome groups reported the highest rate ofestablished business ownership.
Gender
In general, men are significantl more likelto start a business than women. In noneof the countries participating in GEM in2006 are women more active in startingand owning businesses than men. Onl inthe Philippines are women and men aboutequall likel to be entrepreneuriall active.Significant differences exist, however, in thegender gap between countries.
The gender gap exists for both earl-stageentrepreneurial activit and establishedbusiness ownership, and in both countrgroups. yet, the gender gap is morepronounced in high income countries thanin middle income countries. This could bebecause (i) the access of women to labourmarkets ma be more restricted in middleincome countries, prompting them to starttheir own businesses instead and (ii) in higher
income countries women ma have accessto social services and safet nets that ma
discourage them from setting up businesses
For both countr groups, the gender gap isgreater among established business ownersthan among earl-stage entrepreneurs.The available data does not allow us tosa whether this might be due to a highersuccess of males in getting the businessstarted and sustainable, or whether thismight signal greater future participation ofwomen in entrepreneurial activit.
Work StatusIn both countr groups, the participationrates of people currentl starting a businessare b far the highest among workingpeople, either full-time or part-time. In bothcountr groups, participation rates in earl-stage entrepreneurial activit are muchlower among people who are currentl notworking (e.g., due to unemploment), or whare not activel participating in the labourmarket because the are either students or
retired. Overall, the work status patternsare quite similar between the two countrgroups, except that the participation rates onot-working people are higher in the middleincome countries.
Education
Similar to 2005, in both clusters, people witpost-secondar or graduate educations aremore involved in earl-stage entrepreneuriaactivit.
Established business ownership in bothmiddle and high income countries doesnot show a similarl strong correlation witheducational attainment.
Overall, however, the relationship betweenentrepreneurial activit at all stages andeducation is unclear. This is probabl due tothe fact that entrepreneurial ventures are thresponse to a variet of circumstances andpresent a variet of characteristics.
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Household Income
Across all countries, regardless of per capitaGDP, individuals with a higher householdincome are more likel to be involved inearl-stage entrepreneurial activit. However,differences among income groups withineach countr are less pronounced in middleincome countries.
When grouping earl-stage entrepreneurialactivit rates with respect to householdincome categories, the aggregate differencewithin high income countries is greater than
the aggregate difference within middleincome countries. This difference is far lesspronounced for established entrepreneurship.Also, the prevalence of established businessownership shows a somewhat differentpattern for the two countr groups. Higherincome levels are much more common amongestablished business owners in high incomecountries than in middle income countries.
2CHARACTERISTICS OF ENTREPRENEURIAL ACTIVITy
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22GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
CONCLUDING REMARKS
The GEM project provides a comprehensivedescription of entrepreneurial activit aroundthe globe. This, in turn, is intended to providea platform for debate concerning policimplications. Governments have an importantrole to pla in encouraging entrepreneurialactivit, and this role is likel to varaccording to the income level of a givencountr.
The institutional environments thatentrepreneurs operate in political, legal,
and cultural directl influence theiractivit and hence the course of economicdevelopment of the countr. Entrepreneursare present in ever countr and evercultural setting. The institutional environmentwill direct the activities of entrepreneurs.Thus, when it comes to entrepreneurship,the creation of institutions conducive toentrepreneurial activit, such as propertrights, monetar stabilit, respect andenforcement of the rules of law, legal andfinancial transparenc, market openness,and a fair competitive environment are thefundamental responsibilities of governmentall over the world.
In addition to these general principles,the expanded view of entrepreneurshipprovided b the GEM stud confirms thatentrepreneurship comes in man forms.Therefore, when it comes to entrepreneurialpolic, one size does not fit all. Effectivepolicies with respect to entrepreneurshipneed to be tailored to the local context anddepend on what aspect of its entrepreneurialportfolio a countr wishes to enhance.
Since its inception in 999, GEM hasprovided an unprecedented amount of
information on entrepreneurial activit acrocountries. We invite academics, policmakers, entrepreneurs, and anone interesteand passionate about entrepreneurship touse this information and to work with us tofurther increase what we know about thisimportant phenomenon.
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23GEM TEAMS AND SPONSORS: 2006
4.0TEAMS, INSTITUTIONS, SPONSORS
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24GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
TEAM INSTITUTION NATIONAL TEAM MEMBERS FINANCIAL SPONSOR APS VENDOR
Argentina Center for EntrepreneurshipIAE Management andBusiness SchoolUniversidad Austral
Silvia Torres CarbonellHector RochaNatalia Weisz
IAE Management andBusiness SchoolBanco Rio
MORI Argentina
Australia Australian GraduateSchool of Entrepreneurship,Swinburne Universit ofTechnolog and Education,Centre for Innovation andCommercialisationThe Universit of Adelaide
Kevin HindleKim KlverGar HancockNoel Lindsa
Australian GraduateSchool of Entrepreneurship,Swinburne Universit ofTechnolog and Education,Centre for Innovation andCommercialisationThe Universit of Adelaide
Australian Centrefor EmergingTechnologies and Societ
Belgium Vlerick Leuven GentManagement SchoolGhent Universit
Hans CrijnsMirjam KnockaertSophie ManigartMiguel MeulemanTom van Acker
Sabine Vermeulen
Flemish Minister ofEconomic Affairs (SteunpuntOndernemerschap,Ondernemingen enInnovatie)
TNS Dimarso
Brazil IBQP - Instituto Brasileiro daQualidade e Produtividade
Simara Maria S. S. GrecoPaulo Alberto Bastos JuniorJoana Paula MachadoSolange KrupaCarlos Artur Krger PassosJlio Csar FelixMarcos Mueller Schlemm
IBQP - Instituto Brasileiro daQualidade e ProdutividadeSEBRAE- Servio Brasileirode Apoio s Micro ePequenas EmpresasSistema Federao dasIndstrias do Estado doParan (FIEP, SESI, SENAI eIEL)
Instituto Bonilha
Canada HEC-MontralSauder School of Business,The Universit of BritishColumbia
Nathal RiverinLouis-Jacques FilionVictor CuiQianqian DuAviad PeerDaniel Muzka
Ilan Vertinsk
Gouvernement du QubecChaire dentrepreneuriatRogers-J.A.Bombardier, HECMontralThe W. Maurice youngEntrepreneurship and
Venture Capital ResearchThe Social Sciences andHumanities of Canada
BIP
Chile Universidad Adolfo Ibez
Universidad del Desarrollo
Germn Echecopar
Jos Ernesto Amors
Centro de EntrepreneurshipGrupo SantanderUniversidad Adolfo IbezCentro para elEmprendimiento laInnovacinUniversidad del Desarrollo
Benchmark
China National EntrepreneurshipCentre, Tsinghua Universit
Jian Gaoyuan ChengXibiao Liyanfu JiangWei ZhangLan Qin
Shude Shi
Beijing Municipal Science &Technolog Commission
Snovate
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TEAM INSTITUTION NATIONAL TEAM MEMBERS FINANCIAL SPONSOR APS VENDOR
Colombia Coordination Team Liis GmezJorge JimnezRodrigo VarelaJuan Pablo Correales
Comfenalco Valle Centro Nacional deConsultoria
Universidad del Nor te Luis Javier SnchezAlberto Ibarra
Pontificia UniversidadJaveriana Cali
Alberto AriasFernando Pereira
Universidad ICESI Luis Miguel AlvarezAna Carolina Martnez
Univers idad de los Andes Camilo MartinezRafael Vesga
Czech Republ ic Univers it of Economics ,Prague
Martina JaklMartin Lukes
Ministr of Industr andTrade of the Czech RepublicDeloitte Czech Republic
Factum Invenio
Croatia J.J. Strossmaer Universit inOsijek
Slavica SingerNatasa SarlijaSanja PfeiferDjula BorozanSuncica Oberman Peterka
Ministr of Econom, Labourand EntrepreneurshipSME Polic Centre - CEPOR,ZagrebJ.J. Strossmaer Universitin Osijek - Facult ofEconomics, Osijek
Puls, d.o.o.,Zagreb
Denmark Centre for Small BusinessStudies, Universit ofSouthern Denmark
Thomas SchttTorben BagerHannes OttossonLone Toftild
IDEA - International DanishEntrepreneurship AcademKarl Petersen og HustrusFondUniversit of SourthernDenmarkNational Agenc forEnterprise and ConstructionVaekstfondenErnst & youngRingkbing AmtFns AmtViborg AmtSnderjllands AmtVestsjllands Amtrhus AmtVejle Amt
Institut for Konjunkturanalse
Finland Turku School of Economics
Imperial College
Anne KovalainenTommi Pukkinen Jarna HeinonenPekka StenholmErkko Autio
Tekes Finnish FundingAgenc for Technolog andInnovationTurku School of Economics
TNS Gallup O
France EM Lon Olivier TorrsDanielle RoussonSophie Vallet
Caisse des Dpts etConsignationsObservatoire des PME
CSA
German Institute of Economic andCultural Geograph,Universit of HannoverInstitute for EmplomentResearch, Nuremberg
Rolf SternbergUdo BrixChristian Hundt
Institute for EmplomentResearch, Nuremberg
Infas - Institute for AppliedSocial Sciences
Greece Foundation for Economic andIndustrial Research (IOBE)
Stavros IoannidesAggelos TsakanikasTakis Politis
Hel lenic Bank Association Datapower SA
25TEAMS, INSTITUTIONS, SPONSORS
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26GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
TEAM INSTITUTION NATIONAL TEAM MEMBERS FINANCIAL SPONSOR APS VENDOR
Hungar Universit of PcsGeorge Mason UniversitCorvinus Universit ofBudapestMax Planck Institute ofEconomics
Lszl SzerbZoltan J. AcsJzsef UlbertSiri TerjesenAttila VargaJudit KrolKrisztin CsapGbor Kerkgrt
Ministr of Econom andTransportUniversit of Pcs, Facult ofBusiness and EconomcsOhio Universit
Szocio-Graf Piac-esKzvlemn-kutat Intzet
Iceland Rekjavik Universit Rgnvaldur SmundssonSilja Bjrk Baldursdttir
Rekjavik UniversitThe Confederation ofIcleandic EmploersNew Business Venture FundPrime Ministers Office
Capacent (formerl knownas Gallup)
Ireland Universit College, Dublin Paula FitzsimonsColm OGormanPia Arenius
Enterprise IrelandForfsNDP Gender Equalit Unit,
Department of Justice,Equalit and Law Reform
Behaviour and Attitudes
Ital Bocconi Universit Guido CorbettaAlexandra Dawson
Ernst & young Target Research
India Pearl School of Business,Gurgaon
Janaki RamanI. M. PandeAshutosh Bhupatkar
Pearl School of Business,Gurgaon
Metric Consultanc
Indonesia Prasetia Mula BusinessSchoolINRR (Institute of Natural &Regional Resources)Bogor Universit ofAgriculture
Agus Wijaa SoehadiImam SoesenoAsep Saefuddin
Prasetia Mula BusinessSchoolINRR (Institute of Natural &Regional Resources)
MARS (Marketing ResearchSpecialist) Indonesia
Jamaica Universit of Technolog,Jamaica
Sandra GlasgowClaudette Williams-Mers
Vanetta SkeeteIsmail Olusegun Afis
Universit of Technolog,Jamaica
National Commercial BankJamaica LimitedExport-Import Bank ofJamaica LimitedPort Authorit of JamaicaLimitedDigicelG-Tech Jamaica Limited
Koci Market Research &Data Mining Services
Japan Kobe UniversitKeio UniversitMusashi Universit
Takehiko IsobeTsuneo yahagiNoriuki Takahashi
Venture Enterprise Center SSRI
Latvia TeliaSonera Institute atStockholm School ofEconomics in Riga
Vacheslav DombrovskOlga RastriginaAndrejs JakobsonsKarlis Kreslins
TeliaSonera NDB Latvijas Fakti
Malasia Technopreneur Development
Division, MultimediaDevelopment Corp. Sdn Bhd
Dato Dr. Abu Talib Bachik
Wilson Ta Chuan HuiFahiza BasirAmran yusoffSed Azizi WafaSed Khalid WafaTengku Farith Ritthauddean
Economic Planning Unit,
Prime Ministers DepartmentMultimedia DevelopmentCorporation Sdn BhdTechnopreneurs Associationof MalasiaUniversiti Malasia Sabah
Rehanstat Sdn Bhd
Mexico Tecnolgico de Monterre,Business DevelopmentCentreTecnolgico de Monterre,EGAP, Strategic StudiesCentre
Arturo TorresMarcia CamposElvira Naranjo
Tecnolgico de Monterre Profesionales en Estudios deMercado Cultura, S.C.
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TEAM INSTITUTION NATIONAL TEAM MEMBERS FINANCIAL SPONSOR APS VENDOR
Netherlands EIM Business and PolicResearch Jolanda HesselsSander WennekersKashifa SuddleAndr van StelNiels BosmaRo ThurikLorraine UhlanerIngrid VerheulPhilipp Koellinger
Dutch Ministr of EconomicAffairs Stratus (formerl known asSurve@)
Norwa Bod Graduate School ofBusiness
Lars KolvereidBjrn Will moErlend Bullvaag
Innovation NorwaMinistr of Trade andIndustrMinistr of Local Governmentand Regional DevelopmentKunnskapsparken Bod AS,Center for Innovation andEntrepreneurship
Kunnskapsfondet NordlandASBod Graduate School ofBusiness
TNS
Peru Centro de DesarrolloEmprendedor, UniversidadESAN
Jaime SeridaKeiko NakamatsuArmando BordaOswaldo Morales
Universidad ESAN SAMIMP Research
Philippines Philippine Center forEntrepreneurshipFoundation Inc.
Imelda J. MadarangSonia Tiong-AquinoVicentita CerveraGloria ChavezMa. Corazon LopezJaime Noel SantosKatrina Ka Bulaong
Philippine Center forEntrepreneurshipPresidents Social FundNational Livelihood SupportFund
Snerg BusinessConsultanc
Russia Saint Petersburg TeamSchool of Management,Saint Petersburg
Vassil DermanovValer KatkaloOlga VerhovskaaMaria Rumantsteva
School of Management,Saint Petersburg Levada-Center
Moscow TeamState Universit - HigherSchool of Economics,Moscow
Alexander ChepurenkoOlga ObraztsovaTatiana AlimovaVladimir LobachevAlla AlievaDmitr Naumov
State Universit - HigherSchool of Economics,Moscow
Levada-Center
Singapore National Universit ofSingapore (NUS)Entrepreneurship Centre
Poh Kam WongLena LeeHo yuen Ping
Standards, Productivit andInnovationBoard (SPRING) Singaporeand NationalUniversit of Singapore(NUS) Enterprise
Joshua Research Consultan
Slovenia Institute for Entrepreneurshipand Small BusinessManagement, Facult ofEconomics & Business,Universit of Maribor
Miroslav RebernikPolona TomincKsenja Pusnik
Slovenian Research AgencMinistr of the EconomSmart ComFinance Slovenian BusinessDail
RM PLUS
South Africa UCT Centre for Innovationand Entrepreneurship,Graduate School ofBusiness, Universit of CapeTown
Mike HerringtonGideon Maas
Libert Life, Standard Bank,South African Breweriesand the National ResearchFoundation
AC Nielsen ZA
27TEAMS, INSTITUTIONS, SPONSORS
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28GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
TEAM INSTITUTION NATIONAL TEAM MEMBERS FINANCIAL SPONSOR APS VENDOR
Spain
Regional TeamsAndalucaAsturiasCanar I.Castille LeonCastille la ManchaCataloniaC. ValencianaExtremaduraGaliciaMadridMurciaNavarraBasque Countr
Instituto de Empresa
Regional UniversitiesCdizOviedoLas Palmas & La LagunaLenCastille la ManchaAutnoma de BarcelonaMiguel HernndezFundacin Xavier de SalasSantiago de CompostelaAutnoma de MadridMurciaPblica de NavarraDeusto & Basque Countr
Ignacio de la VegaAlicia Coduras
Regional Team DirectorsJos Ruiz NavarroJuan Ventura VictoriaRosa M. Batista CaninoMariano Nieto AntolnMiguel ngel GalindoMartnCarlos GuallarteJos M Gmez GrasRicardo HernndezMogollnJ. Alberto Dez de CastroEduardo Bueno CamposAntonio Aragn Snchez
Iaki Mas EriceIaki Pea Legazkue
Direccin Gral. PolticaPyMEsInstituto de EmpresaCmaras de ComercioJunta de AndalucaGob. del Principado deAsturiasGob. De Canarias, CabildoFondo Social EuropeoCentros de InnovacinEuropeos (Navarra, Murcia,C Len)Generalitat de CatalunaJunta de ExtremaduraAir Nostrum, CEG, BICGaliciaIMADE, FGUAM
Fundacin Caja MurciaEusko IkaskuntzaInstituto Vasco deCompetitividad and others
Instituto Opinmetre S.L .
Sweden ESBRI Entrepreneurshipand Small Business ResearchInstitute
Magnus AronssonLena RamfeltMikael Samuelsson
Confederation of SwedishEnterprise (SvensktNringsliv)NUTEK Swedish Agencfor Economic and RegionalGrowthVINNOVA SwedishGovernmental Agenc forInnovation Sstems
SKOP
Thailand College of Management,Mahidol Universit
Thanaphol VirasaBrian HuntRandall Shannon
Tang Zhi Min
Office of Small and MediumEnterprises PromotionCollege of Management,
Mahidol Universit
Talor Nelson Sofres(Thailand) Ltd.
Turke yeditepe Universit Nilufer EgricanEsra Karadeniz
SiemensTechnolog DevelopmentFoundation of Turke
Akademetre
United ArabEmirates
Zaed Universit David McGlennonKenneth J PreissDeclan McCrohanRaed Daoudi
Mohammed Bin RashidEstablishment for youngBusiness Leaders
IPSOS-STAT (Emirates)
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TEAM INSTITUTION NATIONAL TEAM MEMBERS FINANCIAL SPONSOR APS VENDOR
United Kingdom London Business School
Northern Ireland TeamSmall Business Research
Centre, Kingston UniversitScottish TeamHunter Centre forEntrepreneurship, Universitof StrathcldeWelsh TeamNational EntrepreneurshipObservatorUniversit of GlamorganCardiff Universit
Rebecca Harding
Mark Hart
Jonathan Levie
David BrooksbankDlan Jones-Evans
Small Business ServiceBarclas Bank plcEast Midlands DevelopmentAgenc, yorkshire ForwardSouth East EnglandDevelopment Agenc, NorthWest Development Agenc,Government Officesfor the North East, OneNorth East, East of EnglandDevelopment AgenciesBarking and DagenhamDistrict CouncilInstitute for Famil Business(UK)Invest Northern Ireland
Hunter Centre forEntrepreneurship, Universitof Strathclde
Welsh Assembl GovernmentWelsh European FundingOffice
Iff
Iff
Iff
Iff
United States Babson College
George Mason Universit
Erlend BullvaagI. Elaine AllenZoltan J. AcsWilliam D. BgraveStephen Spinelli, Jr.Marcia Cole
Babson College
George Mason Universit
Opinion ResearchCorp.
Urugua IEEM Business School,Universidad de Montevideo
Jorge Pablo Regent VitaleLeonardo VeigaAdrin EdelmanCecilia Gomeza
IEEM Business School,Universidad de Montevideo
Mori
GEM GlobalCoordinationTeam
London Business School
Babson College
Utrecht UniversitImperial College
Rebecca HardingMark QuillMick HancockDavina McAleelChris AlettMaria MinnitiMarcia ColeNiels BosmaErkko Autio
London Business SchoolBabson College
29TEAMS, INSTITUTIONS, SPONSORS
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30GLOBAL ENTREPRENEURSHIP MONITOR2006 Results
GERA and GEMThe Global Entrepreneurship ResearchAssociation GERA is, for formalconstitutional and regulator purposes, theumbrella organization that hosts the GEMproject. GERA is an association formed ofBabson College, London Business School,and representatives of the Association ofGEM national teams.
The GEM program is a major initiative aimedat describing and analzing entrepreneurial
processes within a wide range of countries.The program has three main objectives:
To measure differences in the level ofentrepreneurial activit between countrie
To uncover factors leading to appropriatlevels of entrepreneurship
To suggest policies that ma enhance thnational level of entrepreneurial activit.
New developments, and all global, nationaand special topic reports, can be found atwww.gemconsortium.org. The program is
sponsored b Babson College and LondonBusiness School.
Babson College
Babson College in Wellesle, Massachusetts,USA, is recognized internationall as aleader in entrepreneurial managementeducation. Babson grants BS degreesthrough its innovative undergraduateprogram, and grants MBA and custom MS
and MBA degrees through the F.W. OlinGraduate School of Business at BabsonCollege. Babson Executive Educationoffers executive development programsto experience managers worldwide. Forinformation, visit www.babson.edu
London Business School
London Business School vision is to bethe pre-eminent global business school,nuturing talent and advancing knowledgein a multinational, multicultural environment.Founded in 965, the School graduated morethan 800 MBAs, Executive MBAs, Masters inFinance, Sloan Fellows and PhDs from morethan 70 countires last ear. The Schools
executive education department serves6,000 executives and 60 corporate clients
on its programs ever ear. London BusinesSchool is based in the most accessible andinternational cit in the world and is one ofonl two business schools in the UK to beawarded a six-star (6*) rating b the HigheEducation Funding Council for England(HEFCE), confirming the School as a centerof world-class research in business and
management. For information, visit www.london.edu.
SPONSORS
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CONTACTS
For more information on this report, contactthe author at:
To download copies of the GEM GlobalReport(s), GEM National Team Reports andto access select data sets, please visit theGEM website:
www.gemconsortium.org
Nations not currentl represented in theGEM Consortium ma express interest in
jioning and ask for additional information bemailing Marcia Cole at [email protected]
3CONTACTS
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