Entrepreneurial Potential of Russian population:

GEM Russia (2006-2007) Head – Prof. Dr. Alexander CHEPURENKO

Team: PhD, Associate Prof. Olga Obraztsova, PhD, Associate Prof. Tatiana Alimova, Assistant Prof. Maria Gabelko, Student staff: Alla Alieva, Maria Denisova, Julia Filatova, Vladimir Lobachev, Linara Mulukova, Ekaterina Murzacheva, Alexandra Shipilova

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About GEM:• Global Entrepreneurship Monitor (GEM) – international

longitudinal comparative project on the state of entrepreneurial activity of population and its impact on economic growth

• Started in 1999 г. in 10 countries, in 2007 г. - 42 participating countries.

• Annually published general and special reports (see at: www.gemconsortium.org)

• More than 200 researchers • Russia since 2006 presented by a joint team from St.

Petersburg State University (Dept. of Management) and HSE (Laboratory of Sociological Research)

• Participating universities are obliged to use the full datasets for research and education.

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Most important tools of the GEM

• Adult population survey (representative for the respective country),

• Experts surveys on Entrepreneurship Framework Conditions in respective countries

• Face-to-face in-depth interviews with local experts (venture capitalists, financiers, state representatives, recognised entrepreneurs, analysts etc.)

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Project purpose• To collect and analyse data on entrepreneurial activity

of population, its structure and role as a factor of economic growth

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Social, Cultural,Political Context

General National Framework Conditions

Entrepreneurial Framework Conditions

Micro, Small and Medium Firms(Secondary Economy)

Entrepreneurial Opportunities

EntrepreneurialCapacity•Skills•Motivation

NewEstablishments

New Firms

MajorEstablished Firms(Primary Economy)

National Economic Growth(Jobs andTechnicalInnovation)

The GEM Conceptual Model

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Stages of entrepreneurial activity

Entrepreneurial potential of a society

Established business owners – over 42 months (regular business based incomes enabling to maintain it)

Potential entrepreneurs (willing to start-up)

Early stage entrepreneurship (0 – 42 months)

Nascent entrepreneurs New business owners (regular business based income, but the possibility to develop it not yet evident) 3-42 months

Latent entrepreneurs (no incomes or salaries from the business after start-up) 0-3 months

Start-ups (first incomes from business) 0-3 months

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Most important indicatorsTotal Entrepreneurial Activity index (ТЕА) – share of adult population (18 to 64 aged), taking

part at a start-up or being owners/managers of firma younger than 42 months; Nascent entrepreneurship rate • Percentage of 18-64 population who are currently a nascent entrepreneur, i.e., actively

involved in setting up a business they will own or co-own; this business has not paid salaries, wages, or any other payments to the owners for more than 3 months.

New business ownership rate • Percentage of 18-64 population who are currently an owner-manager of a new business,

i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than three months, but not more than 42 months.

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.

High-growth expectation early-stage entrepreneurial activity • Percentage of 18-64 population who are either nascent entrepreneurs or owner-managers

of a new business (as defined above) and expect to employ at least 20 employees five years from now.

Business discontinuation rate • Percentage of 18-64 population who have, in the past 12 months, discontinued a

business, either by selling, shutting down, or otherwise discontinuing an owner/management relationship with the business.

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Special issues• High Growth Report (2005) looked at the how much high

growth potential entrepreneurship there is the world and the characteristics of high growth potential entrepreneurs. There is a nearly twice the level of high growth entrepreneurship in the US compared to the UK, Canada or Germany. 10% of all entrepreneurial start ups expect to create more than 75% of the jobs worldwide.

• Women and Entrepreneurship: Systematic differences exist in the entrepreneurial activity rates of men and women across all countries participating in GEM. Despite fewer women then men are involved in starting or owning a business, the number of women is increasing and women who are well-educated, confident about their skills, have higher levels of household income and jobs are more likely to be entrepreneurs than their less affluent counterparts.

• Annual Financing Report: covers the financing of start up firms within the countries participating in GEM.

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Sources of data for Russia, 2006 - 2007

• Data sets of 2 APS (vendor: Levada-Center, May 2006, N = 1894, May 2007, N = 1939)

• Sanple representative for adult population of Russia older than 16 years (confidence interval – 5 %), but not fot the entrepreneurial stratum itself

• Data of 2 years observation not sufficient to speak on tendencies

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Some figures on entrepreneurial potential of Russia in 2006-2007

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Age and Motivation Structure, 2006-2007 (%)

Age Motivation Total

Opportunity driven

Necessity driven

Mixed

2006 2007 2006 2007 2006 2007 2006 2007

18-24 66,7 75 16,7 5 16,7 20 100 100

25-34 59,5 58,6 27 27,6 13,5 13,8 100 100

35-44 37,5 57 40,6 23,8 21,9 19 100 100

45 and older

33,3 47,6 57,1 38,1 9,5 14,3 100 100

Total 49,1 59,3 35,2 24,2 15,7 16,5 100 100

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Indicators of entrepreneurial activity as for stages and gender (% of adult population)

Index Potential enterepreneurs

Nascent New business owners

Established business owners

2006 2007 2006 2007 2006 2007 2006 2007

Men 19,7 13,7 3,6 2,2 3,0 1,5 1,9 1,2

Women 12,4 6,5 1,6 0,6 0,7 0,7 0,8 1,7

Total 15,2 9,2 2,4 1,2 1,6 1 1,2 1,5

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Cross-country comparisons: Russia in the context of GEM

nations

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TEA and GDP per capita compared, GEM 2006

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Indicators of some GEM nations in 2006

Country

early established early discontinued

total men women total men women necessity

opportunity

Russia 4,86 7,33 2,57 1,19 1,83 0,61 1,44 3,39 1,27

Hungary 6,04 8,09 4,05 6,72 9,03 4,48 1,33 4,64 1,13

Latvia 6,57 9,41 3,92 5,69 8,12 3,41 1,04 5,05 1,98

Serbia Н/д Н/д Н/д Н/д Н/д Н/д Н/д Н/д Н/д

Croatia 8,58 12,35 4,87 4,12 5,8 2,46 3,81 4,41 1,81

Slovenia 4,63 6,93 2,29 4,44 6,42 2,44 0,47 4,05 1,02

Romania Н/д Н/д Н/д Н/д Н/д Н/д Н/д Н/д Н/д

PR China 16,19 18,46 13,79 8,98 11,56 6,26 6,27 9,59 6,18

India 10,42 11,6 9,16 5,6 7,26 3,84 2,86 6,71 15,02

Brazil 11,65 13,74 9,61 12,09 14,77 9,45 5,55 5,99 4,55

Chili 9,19 11,38 7,02 6,79 9,2 4,4 2,59 6,57 3,03

Colombia 22,48 27,97 17,3 10,41 14,19 6,85 8,74 13,68 10,52

Venezuela Н/д Н/д Н/д Н/д Н/д Н/д Н/д Н/д Н/д

UAE 3,74 5,87 0,29 1,39 2,19 0,1 0,32 2,95 4,71

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Indicators of some GEM nations in 2007

Country

early established early discontinued

total men women total men women necessity opportunity

Russia 2,67 3,79 1,64 1,68 1,63 1,73 0,51 1,92 1,09

Hungary 6,86 9,29 4,52 4,83 5,88 3,81 1,6 5,01 1,56

Latvia 4,46 7,7 1,41 3,41 4,9 2,02 0,67 3,67 0,74

Serbia 8,56 12,11 5,06 5,27 7,74 2,83 3,94 4,02 2,75

Croatia 7,27 9,44 5,13 4,22 5,79 2,67 2,9 4,16 2,95

Slovenia 4,78 6,84 2,68 4,59 6,84 2,31 0,46 4,24 1,56

Romania 4,02 4,95 3,09 2,51 3,34 1,7 0,56 2,68 2,52

PR China 16,43 19,27 13,43 8,39 9,66 7,04 6,21 9,84 10,34

India 8,53 9,51 7,49 5,53 8,69 2,18 1,67 5,51 15,13

Brazil 12,72 12,73 12,71 9,94 12,7 7,24 5,29 7,23 6,44

Chili 13,43 16,45 10,43 8,73 11,89 5,59 3,2 9,79 4,92

Colombia 22,72 26,91 18,77 11,56 15,49 7,84 9,28 12,57 8,86

Venezuela 20,16 23,5 16,81 5,39 5,87 4,9 6,46 13,33 3,77

UAE 8,55 10,62 5,27 3,42 4,76 1,32 1,47 6,69 8,44

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TEA in 2006

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Established entrepreneurship in 2006

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TEA in 2007

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Established entrepreneurship in 2007

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Russia compared

• According to GEM 2006-2007, Russia belongs to the biggest cluster of countries with a modal early entrepreneurial activity rate;

• Entrepreneurial activity in Russia is significantly lower that in countries with comparable per capita GDP

• Among BRIC countries has Russia the lowest TEA (2,5 – 3 times lower than in other BRIC countries).

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Decline of most indicators dynamics in Russia, 2006-2007

• ТЕА decreased: 2,7 % in 2007 compared with 4,86% in 2006

• Nascent EA – decrease of 61,6 %, • New business owners EA – decrease of

21,7% EEI (Early entrepreneurship increase coefficient

= Nascent : Discontinued): • in 2006 = 3,5, • in 2007 = 1,35.

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Some positive signs in Russia, 2006-2007

Motivation of early entrepreneurship:

• In 2006 Opportunity : Necessity = 5:3,

• In 2007 – ca. 7:1

Gender structure of early entrepreneurship

• Stable high share of women EE (ca. 40 %)

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Reasons for Russia to participate at the GEM

• Possibilities for cross-national comparisons, • Amending of lack of official statistics on

entrepreneurial potential of Russian population• Tools for Quality Assessment on the field of SME

support policy (some GEM indexes can be used as indicators of targeted, real and achieved efficiency)

• GEM instruments are relatively simple, cheap and effective if used on a regular basis.

Thank you for your attention!

Mote details on GEM:

www.gemconsortium.org

http://vorona.hse.ru/sites/sip/second/gem_news.aspx