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Emprendimiento

Entreprenørskap

Entrepreneurship

Entrepreneuriat

Empreendedorismo

Global Entrepreneurship Monitor2010 Global Report

Entreprenörskap

Poduzetnistvo´´

Podjetnistvo´´

Donna Kelley Niels Bosma José Ernesto Amorós

Okuyiiyawo

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Global Entrepreneurship Monitor

2010 Global Report

Donna J. Kelley,Niels Bosma,

José Ernesto Amorós



GEM Global Report 20102

FOUNDING AND SPONSORING INS I U IONS:

Babson College, Babson Park, MA, United StatesLead Sponsoring Institution and Founding Institution

Universidad del Desarrollo, Santiago, ChileSponsoring Institution

London Business School, London, United KingdomFounding Institution

Although GEM data were used in the preparation of this report, their interpretation and use are the soleresponsibility of the authors.

Te authors thank Marcia Cole, Yana Litovsky and Carlos Poblete or their various contributions to thisreport. Tey also wish to acknowledge the contributions o Michael Hay and Jonathan Levie or their insight ulcomments on this report.

Te authors would also like to express their gratitude to all participating GEM 2010 national teams.

Design and Cover: Trinidad Concha Güell

© 2011 by Donna J. Kelley, Niels Bosma, José Ernesto Amorós and Global Entrepreneurship ResearchAssociation (GERA)

GLOBAL ENTREPRENEURSHIP MONITOR2010 Global Report

Donna J. Kelley, Niels Bosma, José Ernesto Amorós




GEM National Teams 2010 67

About the Authors 78

GEM Sponsors 79

Contacts 80

Notes and References 81

List o FiguresFigure 1: The Entrepreneurship Process and GEM Operational Defnitions 13Figure 2: Characteristics o Economic Groups and Key Development Focus 14Figure 3: The GEM Model 15

Figure 4: Total Early-Stage Entrepreneurial Activity (TEA) or 59 Economies in 2010,by Phase o Economic Development, Showing 95 Percent Confdence Intervals 24Figure 5: Total Early-Stage Entrepreneurial Activity Rates and Per Capita GDP 2010 27Figure 6: Necessity-Based Early-Stage Entrepreneurial Activity and Per Capita GDP 2010 28Figure 7: Correlation Between Rule o Law and the Degree o Improvement-DrivenOpportunity motivation or Early-Stage Entrepreneurial Activity 30Figure 8: Sector Distribution o Total Early-Stage Entrepreneurship Activity by Phase o Economic Development 31Figure 9: Sector Distribution o Total Early-Stage Entrepreneurship Activity by Geographic Region 32Figure 10: Age Distribution o Entrepreneurs by Phase o Economic Development 33Figure 11: Age Distribution o Entrepreneurs by Geographic Region 34Figure 12: GEM Economies Ranked by Level o Female Participation in Total Early-StageEntrepreneurship Activity (TEA) by Economic Group, 2010 35Figure 13: Established Entrepreneurial Activity or 59 Economies in 2010, by Phase o Economic Development, Showing 95 Percent Confdence Intervals 36Figure 14: Discontinuations o Entrepreneurial Activity and Per Capita GDP 2010 38Figure 15: Reasons or Business Discontinuance by Economic Phase, 2008–2010 39Figure 16: Job Growth Expectations or Early-Stage Entrepreneurship Activity, 2008–2010 41Figure 17: Di erences in Job Growth Expectations Between Nascent Entrepreneurs andOwner-Managers in New Firms, by Economic Stage o Development and Country, 2008–2010 41Figure 18: Innovation or Early-Stage Entrepreneurship Activity, 2008–2010 43Figure 19: Percentage o Early-Stage Entrepreneurs with International Orientation, 2008–2010 44Figure 20: The GEM Entrepreneurship Framework Conditions 46Figure 21: Scores on Entrepreneurship Framework Conditions Rated by National Experts,by Stage o Development (Unweighted Country Averages) 47

Figure 22: Entrepreneurial Attitudes in Ireland 2002–2010 51Figure 23: Entrepreneurial Activity in Ireland 2002–2010 51Figure 24: Percentage in the Working Age Population Perceiving Good Opportunitiesto Start a Business in the Area where they Live, by Country, or 2002–2004,2005–2007 and 2008–2010, Respectively 53Figure 25: Owner-Managers o New Firms: Percentage in the Working Age Population,by Country, or 2002–2004, 2005–2007 and 2008–2010. Respectively 53Figure 26: Percentage o Early-Stage Entrepreneurs Indicating that they Are Involved inEntrepreneurship Out o Necessity, by Country, or 2002–2004, 2005–2007 and2008–2010. Respectively 54

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Figure 27: Growth Expectations: Percentage o Early-Stage Entrepreneurs Expecting toHave at Least 5 Employees Five Years From Now (or A ter The Start-Up) or 2002–2004,2005–2007 and 2008–2010, Respectively 54Figure 28: Percentages o Total Early-Stage Entrepreneurs Who Find Starting a Business

Now More Di fcult Compared to One Year Ago, 2009 And 2010 56Figure 29: Percentages o Established Entrepreneurs Whose Expectations or GrowthAre Lower Compared to One Year Ago, 2009 And 2010 56Figure 30: Impact o the Global Economic Slowdown on Entrepreneurs’ Perception o Opportunities or Their Businesses, According to the Entrepreneurs (Unweighted Country Averages) 57

List o TablesTable 1: GEM Countries Classifed by Economy and Geography 8Table 2: Entreneurial Attitudes and Perceptions in the GEM Countries in 2010 by Phaseo Economic Development 17Table 3: Entrepreneurial Activity in the 59 GEM Countries in 2010, by Phase o EconomicDevelopment 22Table 4: Entrepreneurship Framework Conditions: Three Valued Most Positive (+) andThree Most Negative (-), Per Country 48

5 Table of Contents



7

With this report, the Global EntrepreneurshipMonitor (GEM) has completed 12 annual surveys o the entrepreneurial attitudes, activities and aspira-tions o individuals around the world. Starting withjust 10 developed countries in 1999, GEM has grownto include over 80 economies during the course o these 12 years. In 2010, over 175,000 people weresurveyed in 59 economies. Tese 59 economies rep-resent not only the largest sample yet, but also themost geographically and economically diverse groupsurveyed. ogether, this group covers over 52% o theworld’s population and 84% o the world’s GDP i.

Te 2010 survey shows that, in the economies ana-lyzed, some 110 million people between 18 and 64 yearsold were actively engaged in starting a business. Anoth-er 140 million were running new businesses they start-ed less than 3½ years earlier. aken together, some 250million were involved in what GEM de nes as early-stage entrepreneurial activity. Out o these individuals,an estimated 63 million people expected to hire at least

ve employees over the next ve years, and 27 million

o these individuals anticipated hiring twenty or moreemployees in ve years. Tis illustrates the contributiono entrepreneurship to job growth across the globe.

GEM takes a comprehensive snapshot o entre-preneurs around the world, measuring the attitudeso a population and the activities and characteris-tics o individuals participating in various phases o entrepreneurship. Also revealed are the aspirationsthese entrepreneurs hold or their businesses, along

Executive Summary

with other key eatures o their ventures. Tis e ortis accomplished through the collaborative work o a consortium o national teams consisting o aca-demic researchers rom across the globe. Each GEMnational team oversees an annual survey o at least2,000 adults. In addition, they consult with nationalexperts on actors that can explain the nature andlevel o entrepreneurship in their economies.

GEM groups the participating economies intothree levels: actor-driven, e ciency-driven, and inno-vation-driven. Tese are based on the World EconomicForum’s (WEF) Global Competitiveness Report ii , whichidenti es three phases o economic developmentbased on GDP per capita and the share o exportscomprising primary goods.

According to the WEF classi cation, the ac-tor-driven phase is dominated by subsistence ag-riculture and extraction businesses, with a heavy reliance on labor and natural resources. In thee ciency-driven phase, urther development is ac-

companied by industrialization and an increasedreliance on economies o scale, with capital-inten-sive large organizations more dominant. As devel-opment advances into the innovation-driven phase,businesses are more knowledge intensive, and theservice sector expands.

GEM additionally considers geographic actors,grouping countries into six geographic regions: Sub-Saharan A rica, the Middle East and North A rica




Africa. While some economies have emerged out of this crisis, others remain stuck in a morass of highunemployment, weak consumer spending and out-of-control debt loads.

For the 41 economies that participated in boththe 2009 and 2010 GEM survey, a comparison of Total Early-Stage Activity (TEA) rates from 2009 to2010 shows a mix of increases and decreases (or nochange) across all three economic groups. While thenumber of positive and negative shi s was roughly equal in the factor-driven and efficiency-driveneconomies, the balance tipped slightly toward moredeclines in the innovation-driven group. Geographi-cally, there are both positive and negative changes inmost regions of the world.

(MENA) / South Asia, Latin America and the Carib-bean, Eastern Europe, Asia/Pacic and the UnitedStates and Western Europe. With all groupings, wecan compare economies across similar developmentlevels and geographic locations. e economic andgeographic groupings are shown in Table 1 .

is year’s survey was conducted during June andJuly of 2010, at a time when the world was still strug-gling to emerge from the 2008–2009 recession, andwith the future economic stability of many nationsstill in question. e recession’s prolonged impactwas demonstrated most considerably in the contin-ued negative or sluggish GDP growth in the devel-oped world, while new growth engines were takingroot in developing countries, particularly in Asia and

Table 1: GEM Countries Classied by Economy and Geography Factor-Driven Efficiency-Driven Innovation-Driven

Angola *, Ghana,Uganda, Zambia

Egypt *, Iran *, Pakistan,Saudi Arabia *, West Bank and Gaza

Jamaica *, Guatemala *,Bolivia

Vanuatu

South Africa

Tunisia

Argentina, Brazil,Chile *, Colombia, CostaRica, Ecuador, Mexico,Peru, Trinidad and Tobago *, Uruguay *

Bosnia and Herzegovina,Croatia *, Hungary *,Latvia *, Macedonia,Montenegro, Romania,Russia, Turkey

Malaysia, China,Taiwan *

Israel

Slovenia

Australia, Japan, Re-public of Korea

Belgium, Denmark,Finland, France,Germany, Greece,Iceland, Ireland, Italy,Netherlands, Norway,Portugal, Spain,Sweden, Switzerland,United Kingdom,United States

Sub-Saharan Africa

Middle East/NorthAfrica (MENA) -South Asia

Latin America and Caribbean

Eastern Europe

Asia Pacic

United States and Western Europe

* In transition to next stage



els. In the e ciency-driven group, the highest EArates were ound in the Latin American and Carib-bean economies, while lower levels were reported inEastern Europe. Iceland, Australia and the United

States showed the highest EA rates among the in-novation economies.

While the actor-driven economies have the high-est EA rates, they also have the highest proportiono necessity-driven motives, where entrepreneurs arepushed into entrepreneurship because they need asource o income. Te innovation-driven group hadthe lowest necessity rate, but the highest proportiono opportunity-driven motives, where entrepreneursare pulled into entrepreneurship because they rec-ognize an opportunity that can improve or maintaintheir incomes or increase their independence.

Nordic countries (Netherlands, Sweden, Den-mark and Iceland) showed especially high pro-portions o opportunity motives. A plot o im-provement-driven opportunity (desire to improveincomes or increase independence) against “rule o law” (extent people have con dence in, and abideby the rules o society) shows that this motive in-creases with greater rule o law.

An examination o the proportion o entrepre-neurial activity in the our main industry sectorsshows that extraction businesses ( arming, orestry,

shing and mining) are more dominant in actor-driven economies. Business services are more com-mon in the innovation-driven economies. Tis isconsistent with the description o developmentphases. rans orming businesses (manu acturingand construction), however, are equally prevalentacross all three economic levels, rather than domi-nant in the e ciency group. Participation in theconsumer-oriented sector generally decreases withhigher development levels.

In each economic group, there are more entre-

preneurs in the 25–34 age group than any other agerange. Women’s participation in entrepreneurshiprelative to men ranges markedly: In the Republic o Korea there are ve times more men than womenentrepreneurs, while in Ghana there are ewer menthan women starting businesses.

Te rate o established business ownership (thoserunning businesses more than 3 ½ years old) de-

Key Overall Findings

AttitudesIndividuals in actor-driven economies tended to

generally rate more positively on the attitude mea-sures, with declining patterns exhibited with high-er development levels. Some o the measures alsoshowed geographic patterns within the three eco-nomic groupings.

In the actor-driven group, individuals in theSub-Saharan A rican countries exhibited high per-ceptions about the presence o opportunities in theirarea, their capabilities or entrepreneurship and theirintent to start businesses. In contrast, the MENA/

South Asian countries had mostly lower perceptionson these measures. A similar geographic distinctionwas illustrated in the e ciency-driven group: LatinAmerica reported high perceptions about opportu-nities and capabilities, while Eastern Europe was lowon these measures. In the innovation group, therewas a distinction between high opportunity and ca-pability perception in the Nordic regions and lowerperceptions in southern Europe.

Fear o ailure showed less distinction among de-velopment levels and geographic location. Perceptionsabout the status and media attention o entrepreneurs,and the attractiveness o this type o career choiceshowed a mix on these three measures. For example,people in some economies generally believed entre-preneurs had high status; nonetheless they had littledesire to pursue this career. Other economies saw en-trepreneurship as an attractive career option, despitelittle status or attention associated with this pursuit.

Activityotal Early-Stage Entrepreneurial Activity ( EA)

includes individuals in the process o starting a busi-

ness and those running new businesses less than 3 ½years old. Tese rates are highest or the actor-driv-en economies, and decline with greater developmentlevels. At the very highest GDP levels, however, wenotice a slight upward trend in EA levels.

In the actor-driven economies, the Sub-SaharanA rican countries have among the highest EA rates,with the MENA group exhibiting relatively lower lev-

9 Executive Summary




and growing rms were among the most negatively evaluated actors.

Te nal section o the report examines the

impact o the most recent recession on entrepre-neurship. Perceptions improved in more developedeconomies in 2010, where the recession took rootstarting around 2008. Fewer entrepreneurs in many o the innovation-driven economies thought it wasmore di cult to start a business compared to a yearago, although there were still some pessimists in themix. In addition, ewer o these entrepreneurs eltnegative e ects rom the global slowdown this year,and as many as one-quarter saw more opportunitiescompared to a year earlier.

ImplicationsAt a time when governments are aced with the

challenges o reviving their economies, they can looktoward entrepreneurship as a major stimulus o newemployment. With GEM as a guide, they can makecomparisons across countries on a variety o aspectsaround entrepreneurship, deriving insights about theattractiveness o their environments or entrepre-neurship. Others, like educators, can build greaterawareness o entrepreneurship around the world,just as business increasingly requires cross-global un-derstanding. Tis report is intended to in orm such

stakeholders in promoting entrepreneurship and, assuch, improving employment growth and economicdevelopment worldwide.

With 59 countries participating in this year’s sur-vey, we have more economies with which to makecomparisons across the three development groups,as well as enough geographic coverage to identi y insights about regions. Following are some implica-tions o the report.

• Entrepreneurship does not impact an economy simply through higher numbers o entrepreneurs.

It is important to consider quality measures, likegrowth, innovation and internationalization.

• Economies need to enable people to start busi-nesses when it is necessary, but they also need toencourage those attracted by opportunity to ventureinto entrepreneurship, even when they have otherwork options.

clines with greater economic wealth. In comparison,EA levels are higher than established business rates

in the actor-driven group, but decline more steeply with greater development levels. As such, EA levels

drop below the level o established businesses or mosteconomies in the innovation-driven phase. Stated di -erently, there are more nascent and new businesses

than established businesses in less-developed regions,but this shi s in the advanced economies, with estab-lished rms tending to outpace nascent and new ones.

Te rate o business discontinuance is highest inthe actor-driven countries, with personal reasonsindicated more o en as a reason or discontinuingrelative to the other economies. Across all the econo-mies, however, nancial issues (unpro table busi-nesses or problems obtaining nancing) weigh mostheavily in business exits.

AspirationsTe e ciency and innovation economies have

similar proportions o entrepreneurs with high-growth aspirations. Tese levels are higher than inthe actor-driven economies. Notably, the MENA andEastern European economies, although exhibiting low

EA rates, show relatively high-growth expectations.

Te innovation measures show especially high

variation among the e ciency-driven economies,ranging rom lower levels in Brazil and rinidad/obago to high levels in Peru and Chile. Among the

innovation-driven economies, there was relatively little variation on this measure.

Te actor-driven economies revealed the low-est level o international customers on average. TeEastern European region generally showed a highlevel o internationalization. On the other hand,economies with big territories ( or example: Iran,Brazil, China and Argentina) exhibited lower inter-national orientation.

Interviews with national experts revealed insightson actors impacting the environment or entrepre-neurship in the economies. Physical in rastructureand the commercial and legal in rastructure receivedamong the most positive evaluations across theeconomies. Education and training in primary andsecondary school and regulations impacting new

10



• Initiatives aimed toward improving entrepre-neurship should consider the development level o the economy. With a strong set o basic requirementsin place, e orts can turn toward rein orcing e cien-

cy enhancers, and then building entrepreneurshipramework conditions.

• An entrepreneurial mindset is not just orentrepreneurs. It must include a variety o stake-holders that are willing to support and cooperatewith these dynamic e orts. In addition, non-en-trepreneurs with entrepreneurial mindsets may indirectly stimulate others to start businesses. Tisindicates the value o broader societal acceptanceo entrepreneurship.

• Entrepreneurship needs both dynamism andstability. Dynamism occurs through the creation o new businesses and the exit o non-viable ones. Sta-bility comes rom providing new businesses with the

best chance to test and reach their potential.• Comparisons across both development-level

and geographic groups may enhance understandingabout entrepreneurship and the conditions that im-pact it, both within and across economies.

• Entrepreneurship in a society should contain avariety o business phases and types, led by di erenttypes o entrepreneurs, including women and under-represented age groups.

11 Executive Summary



GEM Global Report 201012 Capítulo 1 Introducción

can leverage their wealth and innovation capacity,yet they also o er more employment options to at-tract those that might otherwise become entrepre-neurs. In order to maintain their entrepreneurialdynamism, they need to instill more opportunity-based motives.

Second, an economy’s entrepreneurial capacity requires individuals with the ability and motivationto start businesses, and requires positive societalperceptions about entrepreneurship. Entrepreneur-ship should include participation rom all groupsin society, including women, a range o age groupsand education levels and disadvantaged popula-tions. Finally, high-growth entrepreneurship is akey contributor to new employment in an economy,and national competitiveness depends on innova-tive and cross-border entrepreneurial ventures.

GEM Measures

At the time o GEM’s ounding, traditionalanalyses o economic growth and competitivenesshad, or the most part, neglected the role played by new and small rms in national economies, due,in some measure, to the lack o good data on thissector. Tis in ormation, when available, tended tobe present in only those countries at the most ad-vanced stages o economic development. Existing

Introduction and Background

1.1 Entrepreneurship’s Role in theGlobal Economy

Most policymakers and academics agree thatentrepreneurship is critical to the developmentand well-being o society. Entrepreneurs createjobs. Tey drive and shape innovation, speedingup structural changes in the economy. By introduc-ing new competition, they contribute indirectly to

productivity. Entrepreneurship is thus a catalyst oreconomic growth and national competitiveness.

GEM ocuses on three main objectives:• o measure di erences in entrepreneurial at-

titudes, activity and aspirations among economies.• o uncover actors determining the nature and

level o national entrepreneurial activity.• o identi y policy implications or enhancing

entrepreneurship in an economy.

GEM is based on the ollowing premises. First,an economy’s prosperity is highly dependent ona dynamic entrepreneurship sector. Tis is trueacross all stages o development. Yet the nature o this activity can vary in character and impact. Ne-cessity-driven entrepreneurship, particularly in lessdeveloped regions or those experiencing job losses,can help an economy bene t rom sel -employmentinitiatives when there are ewer work options avail-able. More developed economies, on the other hand,

1.2



13

GEM’s research is to promote entrepreneurshipas a process comprising di erent phases, rom in-tending to start, to just starting, to running newor established enterprises and even discontinu-

ing these. Figure 1 summarizes the entrepreneur-ship process and GEM’s operational de nitions.For more in ormation on the history o GEM, see“Background on GEM” in Appendix 1 . For morein ormation on the GEM methodology, visit thewebsite at www.gemconsortium.org. Te mostcommon operational variables and their de ni-tions are outlined in Appendix 2.

services or the pursuit o customers beyond nationalborders. Tey may also include high-growth ambi-tions, thereby contributing more markedly to newemployment in their economies.

Recognizing that entrepreneurs are driven not only by their own perceptions about starting a business, butthe attitudes o those around them, GEM considers theattitudes representing the climate or entrepreneurship

in a society. Entrepreneurs need to be willing to takerisks and have positive belie s about the availability o opportunities around them, their ability to start busi-nesses and the value o doing so. At the same time, they need customers who are willing to buy rom them,vendors willing to supply them and amilies and inves-tors ready to support their e orts. Even positive soci-etal perceptions about entrepreneurship may indirectly stimulate this activity.

measures, such as sel -employment rates, did notrefect the dynamic scope o entrepreneurship. Andwhile most governments have long maintained re-cords o ormal business registrations, it wasn’t un-

til GEM emerged that an accurate picture could bedrawn o the people, and how many o them startedbusinesses in di erent corners o the world.

Te main guiding purpose o GEM is to mea-sure individual involvement in venture creation.Tis di erentiates GEM rom other data sets, mosto which record rm-level data. A second aim o

Trough the wealth o measures GEM tracks, wecan understand which types o people are (and arenot) participating in entrepreneurship. We captureboth those ormally registering their businesses andthose running in ormal ones. Tese unregisteredbusinesses, in act, can compose as much as 80% o economic activity in developing countries iii .

People launch businesses or a variety o reasons.

Tey may be led into entrepreneurship out o neces-sity: the pursuit o sel -employment when there are nobetter options or work. In contrast, their e orts may be powered by the desire to maintain or improve theirincome, or to increase their independence. GEM there-

ore assesses the motives o entrepreneurs

GEM additionally measures aspirations. Teseaspirations may be evident in innovative products or

Figure 1: The Entrepreneurship Process and GEM Operational Defnitions

Discontinuation of Business

Owner-Manager of anEstablished Business

(more than 3.5 years old)

Total Early-Stage Entrepreneurial Activity (TEA)

CONCEPTION PERSISTENCEFIRM BIRTH

Potential Entrepreneur:Opportunities,

Knowledge and Skills

Nascent Entrepreneur:Involved in Setting Up

a Business

Owner-Managerof a New Business

(up to 3.5 years old)

Chapter 1 Introduction and Background




Figure 2: Characteristics o Economic Groups and Key Development Focus

their early stages o development, economies typi-cally have a higher proportion o necessity-drivenactivities. Here, the demand or jobs in high-pro-ductivity sectors outpaces supply. As a result, many

people must create their own source o income.

With urther development comes the growth o productive sectors. Tis increases employment ca-pacity but leads to gradual declines in the level o necessity-driven entrepreneurship. At the same time,improvements in wealth and in rastructure stimu-late opportunity-based businesses, shi ing the na-ture o entrepreneurship activity. Tese ventures aremore likely associated with greater aspirations orgrowth, innovation and internationalization. Tey rely, however, on the economic and nancial institu-tions created during the developing phases. o theextent these institutions are able to accommodateand support opportunity-seeking entrepreneur-ship activity, innovative entrepreneurial rms may emerge as signi cant drivers o economic growthand wealth creation vi .

As Figure 3 shows, the key imperative in actor-driven economies lies in building basic requirementssuch as primary education, healthcare, in rastruc-ture and so orth. Later-stage actors like entrepre-neurial nance and government entrepreneurshipprograms are unlikely to have substantial impact i ,

or instance, entrepreneurs don’t have good roadsto transport goods or a su ciently educated labor

orce rom which they can recruit employees. Inother words, investments in entrepreneurship-spe-ci c ramework conditions may be less e ective inenabling business creation i they are made at theexpense o basic requirements.

1.3

1.4

GEM’s harmonized dataset enables comparisonso entrepreneurship activity around the globe, andwithin and across geographic regions. Tis report ad-ditionally examines groups o economies at similardevelopment levels. Following a typology used by theWorld Economic Forum, GEM classi es the 59 GEMparticipants as “ actor-driven,” “e ciency-driven” or“innovation-driven” economies iv . Figure 2 illustratesthe characteristics o these economic groups and thekey development ocus at each level.

As an economy develops, productivity increasesand, consequently, so does per capita income. Tis iso en accompanied by the migration o labor acrossdi erent economic sectors. For example, labor may move rom agricultural and extractive sectors tomanu acturing, and then eventually to services v . In

Figure 3 illustrates the GEM model, which shows,

rst, the relationship between the social, cultural andpolitical context and three sets o ramework condi-tions. Tese ramework conditions are modeled asimpacting the attitudes o a population toward en-trepreneurship, and the activity and aspirations o entrepreneurs. In turn, entrepreneurship activity, aswell as the growth o established rms in the primary economy, infuence economic growth.

Economic Development Leveland Entrepreneurship

The GEM Model

Basic Requirements E fciency Enhancers Entrepreneurship Conditions

Factor-Driven Ef ciency-Driven Innovation-Driven

From subsistence agriculture toextraction of natural resources,creating regional scale-intensive

agglomerations.

Increased industrializationand economies of scale. Large

rms dominate, but supplychain niches open up for small

and medium enterprises.

R&D, knowledge intensity,and expanding service sector.

Greater potential for innovativeentrepreneurial activity.



15

unction properly. Te nurturing o economies o scale can, in act, be complemented by the emergenceo growth- and technology-oriented entrepreneurs,expanding the scope o employment in a society.

Advanced economies have a relatively sophis-ticated oundation o basic requirements and e -ciency enhancers. While these actors are essentialin sustaining necessity-based entrepreneurship, they may be insu cient drivers o opportunity-basedbehavior. Here, knowledge is prevalent but labor isexpensive. Entrepreneurship-speci c rameworkconditions become the levers that drive dynamic, in-novation-oriented behavior, while the oundation o basic requirements and e ciency enhancers needsto be maintained.

Entrepreneurs with high aspirations are better incountries with a stable economic and political climateand well-developed institutions. Tis, in act, may ac-count or the activities o certain groups o immigrants

into wealthier economies. At the same time, economicprogress begets scale economies. Large rms are moree cient rom a national perspective and, or many in-dividuals, a more attractive employment alternative tonecessity-based entrepreneurship.

o replace the migration o necessity entre-preneurs toward employment in large companies,e ciency-driven economies must attract more op-portunity-based entrepreneurship. Te second set o

ramework conditions represents e ciency enhanc-ers. Tese are directed toward ensuring that markets

Social,Cultural,Political Context

Established rms(Primary economy)

Attitudes:- Perceived opportunities- Perceived capacity

Activity:- Early-stage- Persistence- ExitsAspirations:- Growth- Innovation- Social value creation

New plants, rm growth

National EconomicGrowth(Jobs and Technical Innovation)

ENTREPRENEURSHIP

Basic requirements- Institutions- Infrastructure- Macroeconomic stability- Health and primary education

Ef ciency enhancers- Higher education & training- Goods market ef ciency- Labor market ef ciency- Financial market sophistication- Technological readiness- Market size

Innovation and entrepreneurship- Entrepreneurial nance- Government policy- Government entrepreneurshipprograms- Entrepreneurship education- R&D transfer- Internal market openness- Physical infrastructure for entre-preneurship- Commercial, legal infrastructurefor entrepreneurship- Cultural and social norms

From GEM National Expert Surveys (NES)

From GEM Adult PopulationSurveys (APS)

From otheravailable sources

Figure 3: The GEM Model

Chapter 1 Introduction and Background




With regard to entrepreneurship activity, weanalyze otal Early-Stage Entrepreneurship Activ-ity ( EA), which combines nascent and new businessmeasures. EA is then discussed in terms o its rela-

tionship to development level, expressed as GDP percapita, adjusted or purchasing power parity (PPP). Wethen describe the necessity and opportunity-drivencomponents o EA. Additional characteristics includethe proportion o entrepreneurs operating in variousbusiness sectors, as well as age and gender actors.

Te discussion then turns to established busi-ness and business discontinuance. Finally, we de-scribe the aspirations o entrepreneurs: growthprojections or their businesses, the level o inno-vativeness rom a product, market, and competitivestandpoint and the extent their customers come

rom outside their economy.

Te nal sections include an overview o resultsrom the National Expert Survey (NES) and an analy-

sis o entrepreneurship and the global economy in2010. We close with a summary o key conclusionsand implications.

1.5

Tis report reveals results o the measures o entrepreneurial attitudes, activity and aspirationsrom the GEM 2010 Adult Population Survey (APS).

Tese results include comparisons o economies inthe three development phases, and also comparisonso di erent geographic regions within each develop-ment phase. We highlight particular economies insome cases to illustrate unique ndings.

Tis report proceeds as ollows. We rst exam-ine entrepreneurial attitudes, activities and aspira-tions in the 59 participating economies. entrepre-neurial attitudes encompass several dimensions:views about the presence o good entrepreneurialopportunities in one’s area, belie s about one’s ca-pabilities or starting a business, ear o ailure,perceptions about the status o entrepreneurs andtheir media image, the attractiveness o entrepre-neurship as a career choice and nally, intent tostart a business.

Structure o the Report

16



17

GEM measures several indicators o attitudes:the extent to which people think there are good op-portunities or starting a business and their capa-bilities or doing so. Also measured is ear o ailureor its inverse: the level o risk individuals mightbe willing to assume to start a business. Percep-tions about entrepreneurship are refected in ques-tions about the status o entrepreneurs, their mediaimage and whether it makes an attractive career

choice. Finally, GEM assesses intent to start a busi-ness in the individuals it surveys. Te results areshown in Table 2 .

A Global Perspective on

Entrepreneurship in 20102.1 Attitudes

Entrepreneurial attitudes convey the generaleelings o a population toward entrepreneurs and

entrepreneurship. A society can bene t rom peoplewho are able to recognize valuable business opportu-nities, and who perceive they have the required skillsto exploit them. Moreover, i the economy in generalhas positive attitudes toward entrepreneurship, thiswill generate cultural support, nancial resources,networking bene ts and various other orms o as-sistance to current and potential entrepreneurs.

Table 2: Entrepreneurial Attitudes and Perceptions in the GEM Countries in 2010 byPhase o Economic Development

Factor-Driven Economies

67.353.238.875.7 62.941.6 56.151.975.880.573.6 44.081.461.8

32.228.425.310.423.230.133.034.339.020.7 46.940.012.828.9

73.175.863.474.6 71.065.7 80.256.269.386.7 79.6 57.077.571.5

70.162.977.7 91.173.863.6 85.176.386.881.155.6 85.369.975.3

83.366.6 89.590.7 59.7 84.6 84.880.7 92.387.377.6 83.571.880.9

74.7 51.170.578.6 44.162.377.461.078.081.934.362.572.565.3

54.549.324.368.830.7 31.438.132.41.0

77.150.528.267.142.6

Perceived Opportunities

Perceived Capabilities

Fear of Failure*

Entrepreneur-ship as a Good Career Choice

High Statusto Successful Entrepreneurs

Media Atten-tion for Entre-preneurship

Entrepre-neurial Intentions **

AngolaBoliviaEgypt GhanaGuatemalaIranJamaicaPakistanSaudi ArabiaUgandaVanuatuWest Bank and Gaza StripZambiaAverage (unweighted)

Continued




Perceived Opportunities

Perceived Capabilities

Fear of Failure*

Entrepreneur-ship as a Good Career Choice

High Statusto Successful Entrepreneurs

Media Atten-tion for Entre-preneurship

Entrepre-neurial Intentions **

Ef ciency-Driven Economies

Innovation-Driven Economies

50.338.348.165.036.268.246.423.350.333.329.134.340.155.6 36.171.417.521.7 40.929.6 69.137.6 36.152.142.9

45.7 39.6 46.451.133.928.515.948.7 22.535.224.7 5.9

13.044.849.820.326.818.866.133.329.234.833.4

21.327.433.222.132.027.7 36.031.231.242.439.930.945.333.430.434.041.141.7 29.043.811.6 23.225.027.7 31.7

35.835.131.528.6 40.533.7 50.933.7 33.446.036.832.6 32.523.826.6 29.7 27.536.428.927.030.326.7 33.1

63.562.557.965.6 42.365.168.853.276.6 43.450.7 59.7 24.364.6 70.976.538.222.7 44.326.482.853.154.273.355.9

53.244.940.7 39.537.341.6 52.249.049.241.6 42.413.7 29.045.540.452.156.350.242.443.951.859.544.4

74.376.078.087.470.088.6 64.367.183.155.058.871.355.7 69.481.082.066.565.477.568.483.289.171.264.872.8

57.060.0***

46.165.253.165.6 51.251.861.369.128.467.6 85.457.867.553.265.456.964.951.065.459.2

67.163.079.071.276.975.963.449.974.073.7 64.866.268.6 62.868.476.865.563.7 77.6 57.577.6 92.7 76.461.869.8

68.451.2***

86.567.977.170.260.981.573.069.352.071.368.6 70.7 70.573.7 62.571.6 76.476.7 75.970.3

61.7 47.6 81.145.7 77.066.7 60.841.862.6 47.457.256.088.054.069.581.246.946.6 78.6 78.267.278.461.7 43.362.5

70.545.7 ***

71.444.7 49.034.566.6 61.156.337.7 58.561.460.967.252.6 56.240.7 60.850.6 52.267.855.5

21.016.826.538.326.941.313.27.4

46.313.821.426.7 5.1

22.331.939.6 8.6 2.6 16.7

25.130.424.119.431.823.2

8.7 8.25.95.9

14.26.4

12.815.7 6.114.14.02.9

10.15.57.6 8.88.7 5.88.56.7 5.17.7 8.2

ArgentinaBosnia and HerzegovinaBrazil ChileChinaColombiaCosta RicaCroatiaEcuadorHungaryLatviaMacedoniaMalaysiaMexicoMontenegroPeruRomaniaRussiaSouth AfricaTaiwanTrinidad and TobagoTunisiaTurkeyUruguayAverage (unweighted)

AustraliaBelgiumDenmark Finland FranceGermanyGreeceIceland Ireland Israel ItalyJapanRepublic of KoreaNetherlandsNorwayPortugal SloveniaSpainSwedenSwitzerland United KingdomUnited StatesAverage (unweighted)

Denominator: 18 –64 age group perceiving good opportunities to start a business.Denominator: 18 –64 age group that is not involved in entrepreneurship activity.Data is not available

The de nition of entrepreneurship tends to be a moving target - even theteaching of entrepreneurship causes confusion in the de nition. To starta business does not necessarily make you an entrepreneur. Entrepreneurs“create needs”; business people “satisfy needs”.Tony Falkenstein, New Zealand

Source: GEM Adult Population Survey (APS)

******



19

having high levels o innovativeness or growth ex-pectations. In contrast, Israel (an innovation-drivencountry), had a higher proportion o opportunity-driven motives and a large percentage o individu-

als with high levels o innovativeness and growthexpectations. We could surmise that there are di er-ent perceptions about what an opportunity encom-passes, and what capabilities are required, or entre-preneurship in Uganda versus Israel.

While economic development level may explainsome di erences in belie s about opportunities andcapabilities, there are also some interesting geographicpatterns. In the actor-driven group, individuals in thesub-Saharan A rican countries had the highest-levelperception that there were good opportunities or en-trepreneurship in their area. Tese countries also hadabove average capability perceptions, with nearly 87%o the individuals surveyed in Uganda stating thatthey had the capabilities to start a business.

Te MENA/South Asian countries in the actor-driven group had the lowest perceptions, except orSaudi Arabia, where over 75% o individuals per-ceived there were good opportunities. Perceptionsabout capabilities or starting a business were belowaverage among the actor-driven MENA economies,although much higher than the overall average o the other two wealthier economic groups.

Notably, Latin American countries occupied allthe highest levels o opportunity perception in thee ciency-driven group; they were the only econo-mies in this group with above average ratings onthis attitude measure. Tey also had above averageperception o capabilities.

In contrast, the Eastern European countries hadlower than average opportunity perception in thee ciency-driven group. Capabilities perception wasalso below average, with the exception o Macedonia,Bosnia/Herzegovina and Montenegro. Te same can

be said or the three Asian countries in the e cien-cy-driven group, as well as Japan and the Republic o Korea in the innovation-driven group—both oppor-tunity and capability perceptions were below average.

While all o the Western European countries allinto the innovation-driven group, a distinction be-tween some northern and southern regions can beobserved. Nordic countries (Sweden, Finland, Ice-

Perceived Opportunities and Capabilities

People may decide to start businesses when andbecause they recognize—perhaps unexpectedly—speci c entrepreneurial opportunities. Te thoughto becoming an entrepreneur may not have evenoccurred to them be ore this idea came into view.Others may decide to start ventures and undergo asearch or ideas. Entrepreneurs may recognize op-portunities well in advance, or just be ore they setup their businesses. Consequently, the perception o opportunities relative to new business starts can takemany di erent paths.

An economy’s entrepreneurial energy derives,

at least in part, rom individuals who perceive op-portunities or launching a business in the area inwhich they live. Tese people are urther encouragedby their belie s in their capabilities or starting thetypes o ventures they may envisage. Te quantity and quality o the opportunities they perceive, andtheir belie s about their capabilities, may be a ectedby various conditions in their environment: or ex-ample, economic growth, culture and education. Di -

erent demographic groups may make distinct judg-ments about opportunities and capabilities; thesemay be embedded in historical, socio-economic orcultural actors.

At the same time, policy makers may seek tostimulate these attitudes. Policy programs may ex-plicitly target groups exhibiting low perceived oractual capabilities. Tus, particular sets o nationalconditions may a ect perceived capabilities, both di-rectly and indirectly.

On average, individuals in actor-driven econo-mies have higher perceptions that there are good op-portunities or entrepreneurship, and that they havethe capabilities to start businesses. Tese attitude

measures tend to decline with greater developmentlevels. Tis may seem counter-intuitive until we con-sider, or example, that individuals in di erent stageso economic development may have di erent kindso businesses in mind.

For instance, as the activity section shows, hal o the entrepreneurs in Uganda (a actor-driven econ-omy) started businesses out o necessity, with ew

Chapter 2 A Global Perspective on Entrepreneurship in 2010




the Asian economies, aiwan and Malaysia have thehighest ear o ailure in the e ciency-driven group,while the Republic o Korea and Japan show a belowaverage rate in the innovation-driven group.

Interestingly, ear o ailure among all economieswas highest in Greece. Tis continues an ongoingpattern over the past seven years and refects a strongaversion to risk, which is con rmed by the relatively high employment protection rate vii . Employmentprotection re ers to the number o procedures andcosts required by law to hire or dismiss workers.

Te Netherlands had the lowest ear o ailureamong the innovation-driven economies. However,there is a much smaller gap between this country andothers in the innovation-driven group (such as theU.S., Slovenia and Switzerland, which also have low

ear o ailure). More noticeable di erences can beseen in the remarkably low ear o ailure reported inGhana and Zambia, compared to others in the actor-driven group, and between rinidad and obago andthe other members o the e ciency-driven group.

Te GEM Global 2009 Executive Report showedthat, in actor-driven and e ciency-driven coun-tries, those with the highest ear o ailure rates havethe lowest intentions to start businesses. In addition,across the sample, ear o ailure was lower amongthose who saw good opportunities to start a businesscompared with the population in general. Tis sug-gests that it could be possible to improve perceptionsabout opportunities and increase intentions to startbusinesses by reducing ear o ailure. Policy changesmay have a positive infuence on risk propensity:

or example, removing the large rm employmentadvantage with respect to health care and pensionbene ts, improving the skills o creditors and inves-tors in assessing higher risk ventures and reducingnegative consequences associated with employmentprotection or bankruptcy laws.

Perceptions about EntrepreneurshipOver time, societies and organizations develop

particular cultural and social expectations, refectingtheir members’ values, norms, and a shared under-standing about how things are done. Tese can serveas in ormal governance mechanisms, guiding activi-ties alongside, or in place o , more ormal administra-tive methods. Con ormity and social sanctions may

land and Denmark) have the highest opportunity per-ception, while economies in Southern Europe (Greece,Spain, Portugal and Italy) tend toward the low end. Butthe reverse is generally true or capabilities. Te Nor-

dic countries, with the exception o Iceland, had belowaverage belie about capabilities, while the SouthernEuropean countries, with the exception o Italy, wereabove average on this attitude measure.

Te United States reports the highest level o per-ceived capabilities among the innovation-driven coun-tries, even though opportunity perception was only justabove average. Tese mismatches between opportuni-ty and capability perceptions in the innovation-driveneconomies could indicate a need to address conditionsin the environment that can bring into balance thisalertness to opportunities with the belie s, or perhapscon dence, in one´s entrepreneurial abilities.

Fear of FailureSometimes, the downside risk o ailure outweighs

even the most promising gains imagined in the evento success. In other words, even i the expected re-turns rom entrepreneurship are considerably higherthan the next best alternative, the perceived risks o starting a business may nonetheless deter some in-dividuals. Risk-taking propensity can there ore play a signi cant role in the transition rom potential (or

latent) entrepreneurship to actual business starts. Wecould also assume that entrepreneurship is a ectedby the wider population’s view on risk, since entre-preneurs rely on the participation o stakeholderslike employees, investors, suppliers and others.

Characteristics such as age, gender or ethnicity caninfuence ear o ailure. Young people may not have

amilies and mortgages to support—in a sense havingless to lose. Immigrants may be shut out o more stableor lucrative jobs and there ore have ewer options orgenerating income. Te institutional environment canalso impact this; or instance, bankruptcy legislationmay deter would-be entrepreneurs.

While perceptions about opportunities and capa-bilities show signi cant di erences among the eco-nomic groupings, ear o ailure shows less distinctionamong these groups, just slightly rising with economicdevelopment levels. Geographically, there are ew clearpatterns, with economies rom each region allingboth above and below average. For example, among



21

higher perception about the status o entrepreneursthan they are to perceive entrepreneurship as a goodcareer choice. Te innovation-driven group also hasa higher perception about entrepreneurs’ status com-

pared to their perceptions about entrepreneurship asa career. Tis is understandable, given how entrepre-neurs like Sir Richard Branson in the United King-dom, and Bill Gates, Steve Jobs and recently MarkZuckerberg o Facebook in the United States havegained prominence, not only in their home coun-tries, but worldwide.

In wealthier economies, with relatively good in-rastructure, education and other basic and e ciency actors, shaping attitudes may be more critical because

entrepreneurs are more likely to enter this role becauseo choice. At the same time, with status rated higherthan perceptions about entrepreneurship as a career,it appears that people in these economies may admireentrepreneurs more than they want to become one.

Entrepreneurs with recognition and status canserve as role models, in a sense communicating thatentrepreneurship is possible and desirable. Yet, entre-preneurs such as Bill Gates and Richard Branson may cause some to see such achievements as rare or un-realistic, or simply a path they do not, or cannot, seethemselves taking.

In the e ciency-driven group, on the other hand,the reverse is true. Individuals believe entrepreneur-ship is a good career choice despite less perceivedstatus. Entrepreneurship may take less o a glamorousimage in these regions, which could, in like manner,reduce its attractiveness.

Entrepreneurial IntentionsEven when individuals have avorable perceptions

o entrepreneurship, they may nonetheless have ewintentions to start businesses. Tis is the case or many European countries. Although attitudes and percep-

tions about entrepreneurship are airly high, this is notmatched by high intentions or starting businesses. Avariety o national characteristics could be underlyingthis phenomenon. For example, “red tape” could pres-ent un avorable administrative burdens or high coststo those thinking about starting a business. Addition-ally, governments characterized as wel are states—although meaning to protect citizens—may reduceincentives or entrepreneurship.

unction to maintain a particular equilibrium, some-times preserving special interests or creating resistanceto change. Consequently, cultural and social elementsare o en lasting or slowly evolving qualities.

An entrepreneurial culture may be rein orced by perceptions like the amount o status society con erson entrepreneurs and the extent people think being anentrepreneur is an attractive pursuit. Media can alsorein orce notions about entrepreneurs: or example,magazines or television shows can highlight entre-preneurs, or newspaper stories can eature about theachievements o such individuals. Entrepreneurs asheroes (or otherwise), and their stories o success (or

ailure), can shape a society’s impressions markedly.Policy makers may even take speci c actions to high-light entrepreneurs and shape cultural perceptions.

Te 2010 survey shows that perceptions aboutthe attractiveness o entrepreneurship as a career,the status o entrepreneurs and media attention to-ward entrepreneurship were all, on average, highestin the actor-driven countries. Tese indicators thendeclined generally rom actor-driven to e ciency,and then rom e ciency to innovation-driveneconomies. However, in both the e ciency-drivenand innovation-driven groups, perceptions aboutthe status o entrepreneurs were similar, on average.One explanation or this phenomenon is that thegeneral population in actor-driven economies per-ceives entrepreneurship as an escape rom a ormaljob, even though some o these activities could bedriven by necessity.

Ghana and Saudi Arabia has among the highestlevels o status, career and media perceptions in the

actor-driven group. In the e ciency-driven econo-mies, Malaysia shows the highest level o media atten-tion around entrepreneurship, yet one o the lowestlevels o perception about entrepreneurship as a career.In the innovation-driven group, over 85% o peoplein the Netherlands have a positive perception about

entrepreneurship as a career, ar above the rest o thegroup. At the same time, media attention is just aboveaverage and status perceptions are lower than average.Tis is similar to Chile, and may serve as an exampleo the prospects or stimulating the public’s attentionabout entrepreneurship.

It is notable that most economies in the actor-driven group are more likely to have the same or





Activity

Across the sample o 59 economies, we estimatethat some 110 million people between 18 –64 yearsold were actively engaged in starting a business. An-other 140 million were running new businesses they started less than 3½ years earlier. aken together,some 250 million were involved in early-stage entre-preneurial activity.

As Figure 1 shows, GEM measures the partici-pation o individuals in entrepreneurship activity,presenting this as a continuous process that in-cludes nascent entrepreneurs involved in settingup businesses, entrepreneurs owning and manag-ing new businesses 3½ years old or less and en-trepreneurs owning and managing businesses es-tablished more than 3½ years ago viii . In addition,GEM assesses the rate and nature o business dis-continuance. his section reviews these phases,as well as necessity versus opportunity motives.Table 3 shows these activity results. In addition,these sections provide additional insights on theindustry sector o the businesses, and age andgender demographics o the entrepreneurs.

Far more individuals in actor-driven economies(almost 43% on average) intend to start businesses overthe next three years compared to the other economies.An average o just 23% o people in e ciency-driven

economies expressed this intent, while even ewer(8%) o those in innovation-driven economies did.

In the actor-driven group, the Sub-Saharan A -rican countries had the highest intent, consistentwith their positive perceptions about opportunitiesand their belie in their capabilities. Similarly, lowintentions in the MENA countries are consistentwith their views on opportunities and capabilities.

Among the e ciency-driven group, Eastern Euro-pean economies had lower than average intent, with theexception o Macedonia and Montenegro. Latin Amer-ican countries had higher than average intent, with theexception o Costa Rica, Argentina and Mexico.

In the innovation-driven economies, Icelandshowed high intent. While both the Republic o Koreaand Japan had low perceptions about opportunities andcapabilities, this was matched with low intent only inJapan. Te Republic o Korea was well above averageon this measure.

2.2

Table 3: Entrepreneurial Activity in the 59 GEM Countries in 2010, by Phase o Economic Development

Factor-Driven Economies13.6 28.82.1

10.7 8.34.85.56.6 5.9

10.6 31.27.9

17.311.8

32.438.6 7.0

33.916.312.410.59.19.4

31.352.210.432.6 22.8

19.114.04.9

24.6 8.47.85.12.7 3.5

22.028.22.6

17.112.3

8.6 18.24.5

35.56.6

12.26.94.7 3.9

27.7 23.22.09.6

12.6

19.99.03.8

25.7 3.97.38.12.6 3.8

27.422.05.7

23.512.5

36 17 5337 15384241105038323234

3057 253528393939753424334138

Nascent Entrepreneur-ship Rate

New BusinessOwnershipRate

Total Early-StageEntrepreneur-ship Activity(TEA)

Established BusinessOwnership Rate

Discontinuationof Businesses

Necessity-Driven (% of TEA)

Improvement-DrivenOpportunity(% of TEA)

AngolaBoliviaEgypt GhanaGuatemalaIranJamaicaPakistanSaudi ArabiaUgandaVanuatuWest Bank and Gaza StripZambiaAverage (unweighted)

Continued



23


Nascent Entrepreneur-ship Rate

New BusinessOwnershipRate

Total Early-StageEntrepreneur-ship Activity(TEA)

Established BusinessOwnership Rate

Discontinuationof Businesses

Necessity-Driven (% of TEA)

Improvement-DrivenOpportunity(% of TEA)



7.04.15.8

11.14.6 8.6

10.43.8

10.44.6 5.6 4.41.4* 8

12.022.13.32.15.14.7 8.91.7 3.7 7.86.7

3.92.31.82.43.7 2.52.07.44.43.21.31.51.84.04.41.82.22.22.32.03.24.83.0

14.27.7

17.516.814.420.6 13.55.5

21.37.19.7 8.05.0

1 *

14.927.24.33.98.98.4

15.16.18.6

11.7 11.7

7.83.7 3.85.7 5.84.25.5

10.6 6.85.7 2.33.36.6 7.27.7 4.54.7 4.34.95.06.47.6 5.6

7.44.1

11.86.1

10.012.7 3.6 1.9

11.52.6 4.23.6 3.6 2 *

3.16.01.11.93.93.86.44.45.14.15.2

4.01.42.23.42.31.83.53.32.6 2.6 1.01.84.83.43.42.82.42.12.6 3.13.32.82.8

12.46.6

15.36.0

13.812.24.82.9

14.7 5.47.6 7.6 7.9

*

7.87.22.12.82.17.28.59.0

10.7 7.27.6

8.52.7 5.6 9.42.45.7 14.87.48.6 3.13.7 7.4

11.29.06.7 5.44.97.7 6.48.7 6.47.7 7.0

3.84.7 5.35.6 5.6 5.12.04.57.22.94.23.7 1.95.97.39.22.6 0.84.83.7 2.94.14.6 3.54.4

2.7 2.01.7 1.82.51.53.43.42.33.81.6 1.51.6 1.42.6 2.6 1.6 1.92.92.41.83.82.3

36 47 312942403232282027 59121 *

37 21313236 30142437 26 31

19108

182526 287

31291336 398

152216 251314112820

433046 533441384945435123414 *

3847 47 30314847 4847 5442

5954545456 48396833545547 4964745254427260435154

ArgentinaBosnia and HerzegovinaBrazil ChileChinaColombiaCosta RicaCroatiaEcuadorHungaryLatviaMacedoniaMalaysiaMexicoMontenegroPeruRomaniaRussiaSouth AfricaTaiwanTrinidad and TobagoTunisiaTurkeyUruguayAverage (unweighted)

AustraliaBelgiumDenmark Finland FranceGermanyGreeceIceland Ireland Israel ItalyJapanRepublic of KoreaNetherlandsNorwayPortugal SloveniaSpainSwedenSwitzerland United KingdomUnited StatesAverage (unweighted)



“My decision to start a boutique ad agency, Pepper, came from my incapacityto tow the line and follow corporate instructions that did not sit well withmy value system, my training and experience. So I could either nd anothercompany to work with or start my own. I chose to start my own and now inour sixth year, it looks like we might survive.”Dennis Ramdeen, Founder of Pepper Advertising and Experiential Marketing,Trinidad and Tobago

Data is not available*




indicator of TEA in a country. It represents dynamicnew rm activity—the extent new businesses are in-troduced into a national population.

Figure 4 shows TEA rates across the sample of 59economies, organized into the three economic lev-els and exhibited within each from lowest to highestTEA rate. is gure facilitates benchmarking amongeconomies in similar phases of development. Verticalbars on either side of the point estimates represent de-grees of freedom. In comparing any two economies, if the bars do not overlap, this means they have statisti-cally different TEA ratesx .

For the 41 economies that also participated inthe GEM 2009 survey, a comparison of TEA ratesfrom 2009 to 2010 shows a mix of increases anddecreases (or no change) across all three economicgroups. While the number of positive and negativeshi s was roughly equal in the factor-driven andefficiency-driven economies, the balance tippedtoward slightly more declines in the innovation-driven group.

Total Early-Stage EntrepreneurshipActivity (TEA)

GEM denes Total Early-Stage EntrepreneurshipActivity (TEA) as the prevalence rate of individuals inthe working-age population who are actively involvedin business start-ups, either in the phase preceding thebirth of the rm (nascent entrepreneurs), or the phasespanning 3½ years a er the birth of the rm (owner-managers of new rms). e cut-off point of 3½ yearshas been made on a combination of theoretical andoperational grounds ix .

For the purpose of international comparisons,GEM takes the payment of any wages for more thanthree months to anybody (including the founders) as

the “birth event.” Individuals who are actively commit-ting resources to start a business that they expect toown themselves, but who have not reached this birthevent are labeled nascent entrepreneurs. e preva-lence rate of nascent entrepreneurs and new businessowner-managers, taken together, may be viewed as an

Figure 4: Total Early-Stage Entrepreneurial Activity (TEA) for 59 Economies in 2010,by Phase of Economic Development, Showing 95 Percent Condence Intervals

60%

50%

40%

30%

20%

10%

0%

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Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies




25

having lower than average EA rates or e icien-cy-driven countries, both experienced increasesover last year.

Asian economies in this group reveal a rangeo entrepreneurship levels. While Malaysia’s EArate is relatively lower, it has increased rom lastyear. China, on the other hand, has a high rate o entrepreneurship (14.4%), yet experienced a mod-erate decline rom 2009. China was able to main-tain its targeted high GDP growth rate amid theglobal downturn in 2009 with a 4 trillion Yuaneconomic stimulus. his was mostly distributedto state-owned enterprises or large projects inreal estate and heavy industries (like constructionand in rastructure). he entrepreneurship sectorcould be seen as indirectly bene itting, however,to the extent these irms can become supply-chainplayers or service providers or the large irms, aswell as businesses selling to those receiving wages

rom the projects.


he innovation-driven economies containthe United States and three economies rom theAsia-Paci ic region, but are mostly populated by Western European economies. his latter region,as a whole, experienced mostly little or nega-

tive changes in EA rom 2009. Greece showed asubstantial decrease in EA, amid the debt crisisthat permeated the country in the spring o 2010.A positive change was seen in France, however,which experienced a jump in entrepreneurshipparticipation a ter many years o exhibiting lowerrelative EA rates.

Iceland, Australia and the United Statesshowed the highest EA rates in the innovation-driven category. For Iceland, this comes even a terexperiencing a decline rom last year. he UnitedStates declined slightly in 2010, ollowing a moremarked drop in 2009.

In Asia, Japan maintained its entrepreneur-ship rate, while the Republic o Korea aced aslight decline, although still maintaining a rela-tively high level o entrepreneurship among itseconomic peers.


he actor-driven economies show the highestEA rates on average, ollowed by the e iciency-

driven economies. he lowest average rates areound in the innovation-driven group. he nature

o these di erences will be explained more ully insubsequent sections regarding development levelsand necessity versus opportunity motives.

Within the actor-driven group, the MENA/South Asia region tends to show lower relativerates o entrepreneurship. Shi ts in activity wereobserved in Saudi Arabia, which increased itsentrepreneurship rate rom last year, and Egypt,which exhibited a decline.

Sub-Saharan A rican countries tended towardthe top o the actor-driven economies on entrepre-neurship rates. In act, none o the countries in thisgeographic region revealed a decline in rates overthe previous year, and Angola showed an increase.Interestingly, another country in this region, SouthA rica, part o the e ciency-driven group, also ex-hibited an increase in EA rom 2009.

Vanuatu, a small island o two hundred thou-sand people in the South Paci ic, showed the high-est rate o entrepreneurship in this group, withover hal its people engaged in starting or a lready running new businesses.


Latin American/Caribbean economies tend tooccupy the highest positions in terms o entrepre-neurship rates in the e iciency-driven group. Allthe e iciency-driven Latin American countries ex-hibit 10% or higher rates and none show declines

rom last year. Peru (27.2%) and Ecuador (21.3%)not only showed the highest rates o entrepreneur-ship among all countries in this category, but alsoexhibited increases in EA rom 2009.

Eastern European countries tend toward rela-tively low entrepreneurship rates, with the excep-tion o Montenegro, which has nearly 15% o itspopulation engaged in early-stage entrepreneur-ship. Bosnia/Herzegovina and urkey, although





comes replaced by transparent and respected legaland regulatory systems.

Industrialization and economies o scale avor

larger and more established rms that are able tosatis y the appetites o growing markets, thereby in-creasing their role in the economy. Accompanying allthis is an expansion o employment capacity, allow-ing more people to nd stable jobs in large industrialplants. Te proportion o necessity-driven entrepre-neurship declines as a result. At the same time, im-provements in wealth and the development o basicrequirements (in rastructure, economic stability,education) enable opportunity-based businesses tothrive, shi ing the nature o entrepreneurship activ-ity. But the dominance o large rms also leads to anoverall reduction in the number o new businesses.

At the wealthiest societal levels, individuals livewith sophisticated basic requirements and e ciency enhancers. More importantly, they have access toentrepreneurial nance, open markets, R&D knowl-edge and other entrepreneurship-speci c rameworkconditions. oward the right-hand side o the gure,the role played by the entrepreneurship sector may increase because more individuals can access theresources necessary to start their own business inknowledge-intensive environments with abundantopportunities. Tis tends to create an upward trendas GDP rises to its highest levels, thus completing theU-shape curve.

In countries with low levels o per capita income,a decrease in the prevalence o early-stage entrepre-neurship may be a positive one. It could signal great-er sustainability, especially i this is accompanied by economic growth and political stability. As such, itrepresents a natural evolution in development, as aneconomy relies increasingly on established organiza-tions with scale.

Tere ore, while low EA rates, or drops in rates,

may be a cause or concern in some economies, itcould instead mean that the general economic climatehas improved and that job opportunities are increas-ing. Additionally, it may be accompanied by a shitoward more promising aspirations or growth, inno-vation and international trade, even while the numbero entrepreneurs declines. In this respect, each o theseentrepreneurs contributes more markedly to employ-ment growth and national comparative advantage.

Entrepreneurship Relative toDevelopment Levels

As Figure 4 shows, average EA rates are highestin the actor-driven economies. Figure 5 plots theserates against GDP per capita, adjusted or purchas-ing power parity. As this gure shows, EA rates arehighest or the poorest countries, declining rapidly and then leveling out in the e ciency stage, with lowlevels continuing into the innovation stage until they turn upward at increasing levels o wealth.

One key reason or this trend can be ound indi erences between the level o necessity and op-portunity-based entrepreneurship at particular GDPlevels. Te section that ollows provides a more in-

depth examination o this phenomenon. We providea brie description here, however, in order to includethis in the discussion o the relationship between

EA and development levels.

Necessity entrepreneurs are those who have en-tered sel -employment because they have no betteroptions or work; in other words, they start business-es to generate income or themselves and their ami-lies. Opportunity entrepreneurs, on the other hand,have chosen to start businesses out o opportunity,even when they have other employment possibili-ties. GEM urther queries these individuals on theirmotives: whether they seek to maintain or increasetheir income, or whether they desire independencein their work.

Necessity-driven (mainly sel -employment)activity tends to be higher as a proportion o EAin less developed economies. Agricultural and ex-tractive sectors, as well as consumer-based localbusinesses, dominate these regions. Tere is moredemand or jobs here than employers can provide.Consequently, many people must create their ownjobs to generate income. Small businesses, and lots o

them, are prevalent at this development level.With urther development comes macroeco-

nomic and political stability and the growth o productive sectors. Accompanying this is theemergence o strong institutions that organize andgovern the unctions o society and its economy.A shi t begins to occurs, where a previous relianceon commonly accepted norms o behavior be-



27

stock of business owners, tend to appear above thetrend line.

While development tends to be associated witha particular level of sophistication and attention tovarious framework conditions, economies also havetheir own cultures and policies, among other sourcesof uniqueness. ese elements might be worth con-sidering when counterintuitive or contrasting resultsare revealed.

Further inspection reveals that the dispersion of TEA estimates around the line of best t in Figure 5is not just a function of differences in economic de-velopment (or welfare) but also other factors. Forexample, Eastern European countries have beenexperiencing falling populations and a low stock of business owner-managers as a legacy of commu-nism. eir TEA point estimates are clustered belowthe trend line. In contrast, Latin American countries,with healthy population growth rates and a larger

Source: GEM Adult Population Survey (APS) and IMF World Economic Outlook Database

35

30

25

20

15

10

5

0

ytivitcA lairuenerpertnE egatS-ylraE ni devlovnI noitalupoP 46–81 fo egatnecreP

GHZM

UGAO

PE

EC

CO

GTBR

CL

MEAR

UYMX

LV

HU

CNCR

IRJM

PK

EG

TW

BA

TN

ZA

MK TR

MY

RO RU

HR

PT SI

IL GR FR FIUK

IS

AU NLIE US

SWSE

ES

JP

IT

DE

BE DK

KR

SA

TTR = 0.51

2

GDP per Capita in Purchasing Power Parities ($), in Thousands

Figure 5 : Total Early-Stage Entrepreneurial Activity Rates and Per Capita GDP 2010 1

0 10 20 30 40 50 60

NO


1 Bolivia and Vanuatu a not showed in this gure, because their TEA rates are outsiders

AngolaArgentinaAustraliaBosnia and HerzegovinaBelgiumBrazil ChileChinaColombiaCosta RicaGermanyDenmark EcuadorEgypt

AOARAU BABE BRCLCN COCRDE DK EC EG

SpainFinland FranceGhanaGreeceGuatemalaCroatiaHungaryIreland Israel IranIceland ItalyJamaica

ES FI FRGH GRGT HRHU IE ILIRIS IT JM

JapanKoreaLatviaMontenegroMacedoniaMexicoMalaysiaNetherlandsNorwayPeruPakistanPortugal RomaniaRussia

JPKRLV ME MK MX MY NLNOPE PK PT RORU

SASE SI SW TN TRTT TW UGUK US UY ZAZM

Saudi ArabiaSwedenSloveniaSwitzerland TunisiaTurkeyTrinidad and TobagoTaiwanUgandaUnited KingdomUnited StatesUruguaySouth AfricaZambia

GDP Per Capita in Purchasing Power Parities ($), in Thousands




Figure 6: Necessity-Based Early-Stage Entrepreneurial Activity and Per CapitaGDP 2010


20

18

16

14

12

10

8

6

4

2

0

81 fo egatnecreP

–

ytisseceN yb ytivitcA lairuenerpertnE egatS-ylraE ni devlovnI noitalupoP 46

0 10 20 30 40 50 60

IT

ESUK

FIFR

BE DK

JPGRIL

KRTT

AngolaArgentinaAustraliaBosnia and HerzegovinaBelgiumBoliviaBrazil ChileChinaColombiaCosta RicaGermanyDenmark EcuadorEgypt

AOARAU BABE BOBRCLCN COCRDE DK EC EG

SpainFinland FranceGhanaGreeceGuatemalaCroatiaHungaryIreland Israel IranIceland ItalyJamaicaJapan

ES FI FRGH GRGT HRHU IE ILIRIS IT JM JP

KoreaLatviaMontenegroMacedoniaMexicoMalaysiaNetherlandsNorwayPeruPakistanPortugal RomaniaRussiaSaudi ArabiaSweden

SloveniaSwitzerland TunisiaTurkeyTrinidad and TobagoTaiwanUgandaUnited KingdomUnited StatesUruguayVanuatuSouth AfricaZambia

KRLV ME MK MX MY NLNOPE PK PT RORU SASE

SI SW TN TRTT TW UGUK US UY VU ZAZM

VU

R = 0.622


UG

GH

ZMAO

CO

BOCN

BR MEAR

CLMK

CR

IRJM

BCPE

PK EGGT TW

TNMX

RO RUHU

SA PTSI

HR

LV

TRUY

ZABA

MYIS

SE NL

AU

IE US

SW

NODE

an increase in GDP, and then gradually continueon a more moderate decline. When compared withFigure 6 , it is apparent that both the more gradualslope on the le and the uptick on the right are cre-ated by the increase in opportunity-based entrepre-neurship as GDP rises.

Figure 6 shows a plot based on necessity-motivat-ed entrepreneurship. Tis plot reveals that the steep-ness of the le -hand side of the curve in Figure 5 isdue to very high levels of necessity-based entrepre-neurship at the lowest GDP per capita levels. Alongthe horizontal axis, the levels drop very rapidly with



29

styles, while many people in Iceland wish to im-prove their li estyles and see entrepreneurship as ameans to do this.

Also notable in the innovation-driven group arethe high levels o improvement-driven motivationin the Netherlands, Sweden, Denmark and Iceland.Tis indicates a eature that may be common to theNordic region o Europe—entrepreneurs motivatedto increase their incomes or independence. Tis phe-nomenon could be linked to the degree o generalwealth (paired with relatively low income inequali-ties) and social security in Nordic countries. Addi-tionally, these our countries score high on the Easeof Doing Business Report xi , all alling within the top15 countries out o 183. Ireland, on the other hand,had almost equal proportions o necessity and op-portunity motives.

An analysis o ramework conditions can helpexplain the higher level o opportunity-based en-trepreneurship in the innovation-based economies.Re erring back to Figure 3 , consider the entrepre-neurship ramework condition relating to commer-cial and legal in rastructure. Figure 7 shows a plot o Rule o Law against the proportion o entrepreneurswith improvement-driven opportunity motives.

Te “Rule o Law” index, published by the WorldBankxii , includes several indicators that measurethe extent to which people have con dence in andabide by the rules o society. Tese include percep-tions o the incidence o crime, the e ectiveness andpredictability o the judiciary and the en orceability o contracts. ogether, these indicators measure thesuccess o a society in developing an environment inwhich air and predictable rules orm the basis oreconomic and social interactions and the extent towhich property rights are protected.

Te positive slope rein orces the idea that en-trepreneurship can be encouraged by ensuring

individuals eel secure that, among other things,their contracts can be en orced and their intellec-tual property can be protected. With ewer indi-viduals being orced into entrepreneurship out o necessity, these economies need to promote a posi-tive environment that encourages people to startbusinesses when they otherwise have a choice o options or employment.

Necessity Versus OpportunityTis section examines the proportion o entrepre-

neurs in an economy that have identi ed their mo-

tives as either based on necessity or improvement-driven opportunity. Improvement-driven opportunity re ers to those entering entrepreneurship because they seek independence or to improve (not just maintain)their income. In other words, it excludes maintainingincome rom opportunity motivation.

Saudi Arabia, despite low EA levels, shows apattern similar to Bolivia, with nearly three- ourthso its activity as improvement-driven opportu-nity, and the lowest amount o necessity motiva-tions in this group. On the other hand, Egypt, withthe lowest EA rate in the group, has the highestproportion o necessity-driven entrepreneurship,and among the lowest proportion o improve-ment-driven opportunity. Tis indicates there arerelatively ew entrepreneurs in both countries, yetSaudi Arabian entrepreneurs choose to enter en-trepreneurship to improve their lives with more in-come or independence, while Egyptians entrepre-neurs need to start businesses in order to supportthemselves nancially.

Te highest proportion o necessity-based en-trepreneurship in the e ciency-driven group can

be ound in Macedonia, which also has the lowestimprovement-driven opportunity ratio. Tis coun-try saw a signi cant decrease in entrepreneurshipactivity rom last year. Both Malaysia and Peru showrelatively low proportions o necessity-based activity,yet they exhibit contrasting EA levels, with Malay-sia on the low side and Peru with the highest EAin this group. Tis illustrates simply a lack o need-based entrepreneurship in both countries. In Peru,the high level o entrepreneurship is associated withchoice regarding li estyle improvement.

In the innovation-driven group, several econo-

mies show a very large proportion o improvement-driven opportunity relative to necessity entrepre-neurship. Interestingly, both the highest (Iceland)and lowest (Italy) EA countries in this group ex-hibited some o the largest spreads between thesetwo motivation actors. It could be said that ewpeople in Italy choose to become entrepreneursand only because they want to improve their li e-





Figure 7: Correlation Between Rule o Law and the Degree o Improvement-DrivenOpportunity motivation or Early-Stage Entrepreneurial Activity

Source: Global Entrepreneurship Monitor 2010 and World Bank Governance Indicators 2002 –2006

80

70

60

50

40

30

20

Improvement-Driven Opportunity Entrepreneuship, % of TEA

-2 -1,5 -1 -0,5 0 0,5 1 1,5 2 2,5

R = 0.392

Rule of Law Indicator

nature. Tey can play a key role in entrepreneurshipactivity where poorly developed transportation andcommercial in rastructure exists.

Te MENA/South Asian and Sub-Saharan A ricancountries in the sample are primarily in the actor-driven stage o development. So it is no surprise thatthese economies both have high levels o early-stageentrepreneurs in extractive businesses, as Figure 9 il-

lustrates. Tese geographic regions have high levelso natural resources, which enable the extractingsector to thrive. Te two di er, however, in that theMENA group dominates the trans orming sector,while Sub-Saharan A rica is the most prevalent geo-graphic region in the consumer-oriented sector.

Te Eastern European, Latin American and Asianeconomies span two or three economic groups. Look-

SectorFigure 8 and Figure 9 show the distribution o

early-stage entrepreneurship activity in our main in-dustry sectors, with regard to both economic develop-ment phase and geographic region. Figure 8 con rmsthat extraction businesses ( arming, orestry, shingand mining) are more dominant in actor-driveneconomies. Business services are more common in

the innovation-driven economies. On the other hand,no group dominates the trans orming business sec-tor (manu acturing and construction), which exhibitsequal prevalence across all three economic levels.

Both actor-driven and e ciency-driven econo-mies are strongly weighted toward the consum-er-oriented sector. Tese businesses tend to haverelatively low resource needs and are o en local in



31

Te United States and Western Europe, all inno-vation-driven economies, not surprisingly dominatethe business services sector. Tis sector tends to rely on highly educated human capital, which is more

widely available in these regions, and supplied by awell-established higher education system.

ing across the sectors, none o these global regions has amajority presence in any one category. Looking withinsectors, both Latin America and Asia Paci c have mosto their entrepreneurs in the consumer-oriented sector.

But while many Eastern European entrepreneurs oper-ate in consumer-oriented businesses, there is a compar-atively even distribution among the other sectors.

Figure 8: Sector Distribution o Total Early-Stage Entrepreneurship Activity by Phaseo Economic Development




0% 20%

Extractive Transforming Business Services Consumer-Oriented






Figure 9: Sector Distribution o Total Early-Stage Entrepreneurship Activity byGeographic Region


Latin America and Carribean

Sub-Saharan Africa

Asia Paci c

Eastern Europe

U.S.A. and Western Europe

Middle East and North Africa/South Asia

0% 20%

Extractive Transforming Business Services Consumer-Oriented

Figure 10 and Figure 11 show the distribution o early-stage entrepreneurs by age or the three economicgroups and the six geographic regions. Figure 10 illus-trates that in each o the three economies, the 25–34age group contains a higher percentage o early-stageentrepreneurs than the others, ollowed by the 35–44age group, and then the 45–54 age group. Less preva-lent is the youngest (18–24) age group and, even lessso, the oldest age group (55–64).

All three o the economic groups thus show bell-shaped distributions that are steeper on the le . Yetthere are some unique patterns. Innovation-driveneconomies have greater concentrations o entrepre-neurs in the middle age groups, 25 through 54 yearsold, showing a steeper trail o on both sides. Tis islikely due to a higher proportion o people in tertiary

Age DistributionA society can bene t rom entrepreneurs o all

ages. At one extreme, young people have resh ideas,are “born-digitals” with perhaps a di erent outlookand more education than their parents. Tey are lesslikely to have responsibilities like mortgages and ami-lies, which can otherwise make them more cautious. Atthe other end, older people have experience, contactsand capital built over long careers. Moreover, the 50+age group in many economies is now amiliar with in-

ormation and communication technologies, makinghome-based start-ups an interesting option or thisgroup. While entrepreneurship is o en more preva-lent in the age groups in between, policy makers mightlook to harness the entrepreneurial potential on eitherside o these seemingly more likely prospects.

“The development of our country depends on the achievements of youngentrepreneurs. We should encourage our young people to chooseentrepreneurship as a career path. Therefore, we need to create awareness aboutentrepreneurship and increase the number of role models in Turkey.”Ali Sabanci, Chairman, TOBB Young Entrepreneurs Board, Turkey



33

Te Asia Paci c region and the United States/Western Europe had the highest percentages o thesecond most popular age group (35–44 year olds)compared to the others. In these regions, individuals

tend to spend a longer time period receiving theireducations. In addition, with their high levels o edu-cation, they are more likely to work or establishedcompanies or in government jobs be ore becomingentrepreneurs. Te United States/Western Europeanregion also had the highest percentage o the secondoldest group (45–54 year olds), again demonstratingthe popularity o entrepreneurship among a middle-age population.

Eastern Europe showed a unique pattern in itsemphasis on an overall greater proportion o youngentrepreneurs than the other geographic areas. Tis

region had the highest relative percentages o thetwo youngest age groups and the lowest proportiono the two oldest groups. Perhaps the entrepreneur-ial activities o the youngest generations in thesecountries can be explained by the di erent socio-economic system in which they have been raised.

education in younger age groups and better retirementprovisions or older people. Te actor-driven econo-mies have more entrepreneurs in the younger (18–24)and older (55–64) extremes compared to the other

economies, thereby exhibiting a fatter bell shape.

Looking at Figure 11 , the geographic regions re-veal similar patterns o relative prevalence across theage categories. Tis suggests that the age distributiono an economy is an important determinant o early-stage entrepreneurship activity across age groups.Several o the geographic regions reveal some uniquecharacteristics, however.

In the Asia Paci c region, the prevalence rate o theoldest group is nearly identical to the youngest group,in contrast to the other regions, which show a higherlevel o younger than older entrepreneurs. Some Asianeconomies are experiencing a decline in their youthdemographic. In Japan, or example, the middle agegroup (35–44 years old) is the most prevalent one,while there are slightly more entrepreneurs in the old-est age group compared to the youngest one.

Figure 10: Age Distribution o Entrepreneurs by Phase o Economic Development


30%

25%

20%

15%

10%

5%

0%

Percentage of Adult Population Between 18–64 Years

18–24 Years 25–34 Years 35–44 Years 45–54 Years 55–64 Years

Factor-Driven Economies Innovation-Driven EconomiesEf ciency-Driven Economies





Figure 11: Age Distribution o Entrepreneurs by Geographic Region


35%

30%

25%

20%

15%

10%

5%

0%


Latin Americaand Carribean

Sub–SaharanAfrica

Eastern EuropeMiddle East and North Africa /

South Asia

Asia Paci c U.S.A. and Western Europe

18–24 Years 25–34 Years 35–44 Years 45–54 Years 55–64 Years

eration and willingness o stakeholders like investors

and creditors, employees, suppliers and customers.When these actors act as impediments, society miss-es an opportunity to gain rom the entrepreneurialenergy o hal its population.

Figure 12 shows the level o emale and male par-ticipation in early-stage entrepreneurship, ranked by the percentage o women involved in EA within thethree economic groups. Te level o women partici-pation is somewhat similar to EA levels—that is, i

EA is very low in an economy, there are also ewerwomen entrepreneurs in an absolute sense. But someeconomies show relatively higher or lower percentageso women entrepreneurs relative to men. For these lat-ter economies, entrepreneurship activity could be en-hanced overall by stimulating women to become moreactive in entrepreneurship.

Women’s participation in entrepreneurship relativeto men ranges rom a ratio o 20:100 in the Republic o Korea to 120:100 in Ghana. Across the three developmentlevels, the actor-driven and e ciency-driven groups aresimilar on average, but the innovation-driven group hasa lower average proportion o women entrepreneurs.

Gender DifferencesWomen can enter entrepreneurship or many o

the same reasons as men: to support themselves andtheir amilies, to enrich their lives with careers and

nancial independence and so on. Yet there may bespecial considerations or emale involvement in start-ing businesses. Tis is important to examine in light o the act that women’s participation in entrepreneur-ship varies signi cantly across economies, but is near-ly always less than that o men.

Societies di er in their perceptions and customsabout women working, and working in business.Overall levels o education and development can in-fuence societal belie s, with a higher degree o eithergenerally associated with greater acceptance aboutwomen’s careers. In some cases, however, women en-ter entrepreneurship, regardless o perceptions, simply because their amilies need their incomes.

In addition, social acceptance around placing chil-dren in the care o others while pursuing a career, andthe cost and availability o childcare can weigh heavily.Women entrepreneurs also need to rely on the coop-



35

with lower than average emale participation with a60 to 100 ratio.

Looking at the Asia Paci c region, Australia shows

the greatest number o women entrepreneurs amongthe innovation-driven economies, with men and wom-en participating equally in this activity. Malaysia has alow EA but a very high relative level o emale partici-pation, with almost equal numbers o women and menentrepreneurs. aiwan, on the other hand, ranks belowaverage, with a 60 to 100 ratio. wo other Asian countriesin the innovation-driven group, the Republic o Koreaand Japan, are among the lowest ranked or emales.

Te highest ratios o emale participation in West-ern Europe are in Belgium and Switzerland, with ratiosaround 80 to 100. Te United States also has many women entrepreneurs, with a ratio o about 85 to 100.

In the actor-driven economies, the lowest levelsand ratios o women participation can be ound in theMENA countries, where or every woman entrepre-neur, there are about two to our men. Te highest ra-

tio can be seen in the Sub-Saharan A rican countries,where there is more or less equal participation, withZambia having slightly ewer women and Ghana hav-ing more women than men on average.

In the e ciency-driven economies, Eastern Eu-ropean countries occupy the lower levels and ratios

or women’s participation, with the lowest exhibitedin urkey at a ratio o about 28 women or every 100men. An exception can be ound in Russia, which hasan 80 to 100 ratio. Latin American countries tend to-ward higher levels o participation, with Costa Ricaand Mexico reporting almost equal participation by gender. Uruguay is the only Latin American country

Figure 12: GEM Economies Ranked by Level o Female Participation in TotalEarly-Stage Entrepreneurship Activity (TEA) by Economic Group, 2010


Percentage of Early-Stage Entrepreneurs

70%

60%

50%

40%

30%

20%

10%

0%

Pakistan

Iran

Egypt

Saudi Arabia

West Bank and Gaza Strip

Jamaica

Guatemala

Zambia

Uganda

Angola

Bolivia

Ghana

Vanuatu

Romania

Russia

Turkey

Croatia

Macedonia

Tunisia

Bosnia and Herzegovina

Hungary

Malaysia

Taiwan

Latvia

South Africa

Uruguay

Mexico

Montenegro

Argentina

China

Costa Rica

Trinidad and Tobago

Chile

Brazil

Colombia

Ecuador

Peru

Japan

Italy

Korea

Denmark

Slovenia

Germany

Portugal

Spain

Belgium

Sweden

Norway

Finland

Ireland

Greece

Netherlands

Israel

United Kingdom

Switzerland

France

United States

Iceland

Australia


Male Female


“Women are very resilient, we have the ability to carry on in adversity ... wehave proved it during the reconstruction after the earthquake.”Benedicta Aravena and Guacolda Saavedra, Centro Social Quidell, Chile




products that can create new value, or hindering re-sponses to shi s in the market. Ideally, an economy should have some turnover o rms, where start-ups introduce new ideas into their environments,

replacing, in part, rms whose businesses have losttheir relevance.

Te 2010 results show that the rate o estab-lished business ownership declines with greatereconomic wealth (see Figure 13 ). Te degree o de-cline is not as great as it is with EA, however. Temost distinct characteristic among the economicgroupings is that established business ownershiptends to outpace the EA level as GDP per capitaincreases. None o the actor-driven economies hada rate o established business ownership greaterthan the EA rate, while all but our o the inno-vation-driven countries had equal or greater estab-lished business rates. Tis could refect increasingstability and/or sustainability o business activitiesas GDP per capita increases.

Established Business RatesBusiness owners who have paid salaries and wages

or more than 42 months are classi ed as established

business owners. Teir businesses have survived theliability o newness—the period a er ounding wherenew businesses are at a disadvantage relative to estab-lished rms. Tis is generally due to their lack o bothinternal e ciency and external legitimacy, which con-strains their ability to orm relationships and accessresources in their environments.

High rates o established business ownershipmay indicate positive conditions or rm sur-vival, refecting a greater amount o stability andeconomically sustainable businesses. On the otherhand, it may signal a low level o dynamism, partic-ularly i a high rate o established entrepreneurshipis combined with a low rate o early-stage activity.Te industry environment may su er rom a lack o competitiveness—slowing the introduction o new

Figure 13: Established Entrepreneurial Activity or 59 Economies in 2010, by Phaseo Economic Development, Showing 95 Percent Confdence Intervals


40%

35%

30%

25%

20%

15%

10%

5%

0%Percentage of Adult Population Between

18–64 Years


Saudi Arabia

Egypt

Pakistan

Guatemala

Jamaica

Angola

Zambia

Iran

Bolivia

Vanuatu

Uganda

Ghana

South Africa

Romania

Russia

Croatia

Costa Rica

Hungary

Chile


Peru

Taiwan

Uruguay

Macedonia

Latvia

Montenegro

Malaysia

Trinidad and Tobago

Tunisia

Turkey

Colombia

Argentina

China

Ecuador

Brazil

France

Belgium

Israel

Italy

Slovenia

Portugal

Denmark

Germany

United Kingdom

Sweden

Norway

Japan

Iceland

United States

Spain

Australia

Ireland

Switzerland

Netherlands

Finland

Korea

Greece




37

trepreneurs. Te highest established business rate inthis group could be ound in Greece, which had anaverage EA level. France had the lowest establishedbusiness rate, which was outpaced by an above aver-

age EA rate that had jumped signi cantly rom lastyear. At least some o this can be explained by theextent to which agriculture dominates the economy in Greece, and the historic domination o the econo-my by state-directed big business in France. Iceland,with the highest EA rate in this group, had an es-tablished entrepreneurship rate below its EA.

Te data suggests there may be two di erentconcerns relative to new and established busi-nesses: (1) the overall rate o business ownership islow, whether new or established, or (2) conditions

avor one over the other. Advances in economicdevelopment require business activities exhibitingboth dynamism and stability. Dynamism ensures acontinual renewal o ideas and value in a society,while stability allows those with the most promiseto survive and grow.

Business DiscontinuanceAs new businesses emerge to introduce novel

ideas into their economies, those that no longer cre-ate value or their stakeholders would be expectedto close. Tose individuals selling or closing their

businesses may once again bene t their societies by re-entering the entrepreneurship process. Recog-nizing the importance o this measure, GEM tracksthe number o individuals who have discontinued abusiness in the last 12 months. Discontinuance may be considered along with EA and established busi-nesses as a component o entrepreneurial dynamismin an economy.

In the actor-driven group, discontinuance rough-ly ollows EA rates in a number o the economies.For example, many o the MENA countries have bothlow EA rates and ewer individuals discontinuing

their businesses. On the other end, the sub-SaharanA rican countries have both high EA and businessdiscontinuance. Exceptions can be seen in the twohighest EA economies, Bolivia and Vanuatu, wherethere is a wide di erence between starts and stops.Figure 14 demonstrates these patterns, revealing very high levels o discontinuation at the lowest levels o GDP per capita. Similar behavior can be observed innecessity-motivated entrepreneurship (see Figure 6 ).

While start-ups are comparatively requent inactor-driven economies, these businesses could be

based on less sustainable principles. Or perhaps en-trepreneurs simply all victim to the harsh business

conditions in their environments. Nevertheless, thisimplies the need or caution in orming impressionsabout the contribution o entrepreneurship in lessdeveloped economies. Although the rate o businessstarts-ups is very high, these businesses are prone toshort li e expectancies. What may actually be viewedare a lot o start-up attempts rather than the creationo longer term potential. It also suggests to policy makers in these regions that the problem lies less ingetting people to the starting gate, and more withequipping them to stay in the race.

Some variation can be observed in the actor-driven countries, however. Te MENA countries, Ja-maica and Guatemala (in Latin America), had both

EA and established business rates that were lowerthan average or the group. Te Sub-Saharan A ricancountries had high EA rates, with divided results

or established businesses. Uganda and Ghana hadthe highest established business rates in the actor-driven group. Angola and Zambia, however, were be-low average on the measure.

In the e ciency-driven group, the Eastern Europe-an countries with the lowest EA rates had even lowerestablished business rates (Russia, Romania, Croatia,Hungary, Bosnia-Herzegovina and Macedonia). How-ever, two countries rom other regions, Malaysia and

unisia, despite having low EA levels, had higher thanaverage established business levels. Tese di erencesmay be rooted in cultural and historical backgrounds,as well as the socio-economic systems. Eastern Europedoes not have many years o experience with privatebusiness ownership, or example. In contrast, Malaysiahas a culturally diverse economy with a long history o immigrant entrepreneurs.

Latin American countries in the e ciency-driv-

en group showed opposing characteristics: Brazilhad the highest level o established businesses in thiseconomic group. Mexico, on the other hand, revealedan almost non-existent established entrepreneurshipsector. Peru also had a low established business rate,despite its high EA rate.

In the innovation-driven group, most o theeconomies had more established than start-up en-





Figure 14: Discontinuations o Entrepreneurial Activity and Per Capita GDP 2010


est discontinuance rate among the innovation-driven economies.

Survey respondents who had discontinued abusiness in the previous 12 months were asked togive the main reason or doing so. Financial di -

culties—unpro table businesses and problemsgetting nance—were mentioned most o en as thereason or discontinuing a business. Factor-drivenand e ciency-driven economies reported thehighest proportion o nancial di culties. Also, asFigure 15 points out, nancial di culties leading

In the e iciency-driven countries, the largestgaps between starts and stops can be observed inthe high EA economies, primarily in the LatinAmerican countries. his re lects a reduction inthe churn rate o new business owners to discon-tinuances, which is also particularly noticeableamong the innovation-driven economies. Iceland,Australia and the Netherlands have both high EArates and high gaps between starts and stops, withthe Netherlands having the lowest discontinuancerate in the group. In contrast, the United States, al-though having a high EA rate, also had the high-

30

25

20

15

10

5

0

Percentage of 18–64 Population with Discontinuation of Entrepreneurial Activity

0 10 20 30 40 50

R = 0.582




39

Figure 15: Reasons or Business Discontinuance by Economic Phase, 2008–2010


Spain, Italy, Republic o Korea and Ireland. “Teopportunity to sell” was mentioned more o en ininnovation-driven economies than the others, eventhough this proportion decreased in comparison to

2009. Generally, these economies have well-developedmechanisms or allowing businesses to change handsor or ounders to exit through mergers, acquisitionsor public markets.

In actor-driven economies, almost all the non-nancial discontinuations are or personal reasons.

Tese are likely due to such actors as illness, bereave-ment, civil unrest and other reasons associated withrelatively un avorable basic requirements.

to business discontinuation have risen in all threeeconomic groups in 2010.

Financial di culties, both in absolute terms and

in proportion to all discontinuations, remain low-est in the innovation-driven group. Tere are ewerproblems raising nance in these countries, whereentrepreneurial nance (an entrepreneurship rame-work condition) is generally more developed. Largevariations exist, however, within this group. In France,the Netherlands and Finland, about one out o threeindividuals with discontinued businesses mentioned

nancial problems, whereas around two out o threeidenti ed this reason or discontinuing in Greece,

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Retirement Problems GettingFinance

Incident

Opportunity to Sell

Exit Planned inAdvanceOther Job or Busi-ness Opportunity

Personal Reasons

Business Not Pro table


2008 2008 20082009 2009 20092010 2010 2010


“The recession in 1997 forced us to close down our plastic company. But soonwe were blessed with the idea of running a business of providing services toother companies”.Mr. Harridz Mohan Abdullah, Founder, T-Max Group, Malaysia

“We are seen as self-made men with backbones. Even if we fail, we fail withpride before we dare to try”.Mr. Kevin Koo, Co-Founder, Koo Chin Nam & Co., Malaysia




innovation-driven economies report similar propor-tions o job creation expectations in the moderate cat-egory (29% and 28%, respectively), but there is largevariation among the economies within each group.

For higher job expectations the e ciency-driven andinnovation-driven economies are also comparable:an average o 7.1% in the e ciency-driven group and7.8% in the innovation-driven group expect to create20 or more jobs (see Figure 16 ).

Figure 17 compares growth expectations or na-scent entrepreneurs and owner-managers o new

rms. Although there are some di erences in growthexpectations between those just starting businessesand those already running them, most economiesexhibit similar rates. In some economies, the nascententrepreneurs have higher growth expectations. Itmay be that those starting businesses in these econ-omies are more optimistic, or perhaps the owner-managers o new rms tend to be more realistic.

Dramatic di erences can also be seen across thegeographic regions. A group o countries in EasternEurope—Croatia, Montenegro, Latvia and urkey—have a high proportion o individuals anticipatingmoderate ( ve plus) growth, although with more var-ied expectations at the higher (twenty plus) level.

Similarly, three MENA economies (Saudi Arabia,Egypt and Iran) have greater proportions o highexpectation entrepreneurship at both moderate andhigh levels. Tis is particularly important becausethese countries have low EA levels. With a greaterpercentage o this activity involving high growth, alarger contribution to job creation is possible.

On the other hand, two regions—Latin Ameri-ca/Caribbean and Sub-Saharan A rica—have ewergrowth expectations in the ve-plus and the 20-pluscategories. For some o the Latin American coun-tries, this comes despite high EA rates. For exam-ple, Ecuador has among the highest EA rates in the

e ciency-driven group, yet has the lowest propor-tion o moderate growth expectations.

In the innovation-driven group, the two lowest EAeconomies, Italy and Japan, have among the highestmoderate growth expectations, boosting overall job cre-ation possibilities. Israel, with a moderate EA rate, hashigh proportions o both moderate and high-growthexpectations. Especially notable is Iceland, which hasthe highest EA rate, but also the greatest proportion o moderate and high job creation expectations.

2.3 Aspirations

Entrepreneurs di er in the variety and level o

aspirations they have or their businesses. Tey holdparticular belie s or ambitions about the growth pros-pects or their ventures. In addition, they introduceproducts or services exhibiting a range o innovative-ness: a level o newness in the product itsel , newnessto the market and the extent there are no competingalternatives or their o erings. Entrepreneurs also vary to the extent they reach into international marketswith their products and services. With these ambi-tions, entrepreneurs have the potential to signi cantly impact the employment growth and comparative ad-vantage o their economies. For this section, data werecombined or the years 2008–2010 xiii .

Growth ExpectationsGEM asks all identi ed early-stage entrepreneurs

how many employees they have at the time o thesurvey and how many they expect to have (otherthan the owners) within ve years’ time. Te di er-ence represents their growth expectations. Almost55% o all those starting businesses expect to createone to ve jobs. However, only 9% o all start-up at-tempts expect to create 20 or more jobs, illustratingthe lower prevalence o high growth projections.Still, there are an estimated 63 million people in the59 economies expecting to hire at least ve employ-ees over the next ve years, and 27 million o theseindividuals anticipated hiring twenty or more em-ployees in ve years, illustrating the contribution o entrepreneurship to job growth across the globe.

High-growth entrepreneurs, also known as ‘ga-zelles’ (a term popularized by U.S. economist DavidBirchxiv ), receive high attention rom policy makersbecause their rms contribute a disproportionateshare o all new jobs created by new rmsxv . In act,some studies show that entrepreneurial aspirations

or growth are likely to lead to actual growthxvi

. Tisimplies that e orts aimed at increasing growth aspira-tions and abilities can translate into concrete bene ts.

Looking across the three economic groups, the ac-tor-driven economies have a generally lower propor-tion o high expectation entrepreneurs, with an aver-age o 21% expecting to create ve or more jobs in veyears (moderate growth expectations), and only 4.6%expecting to create 20 or more jobs (high-growth ex-pectations). Te e ciency-driven economies and the



41

Figure 16: Job Growth Expectations or Early-Stage Entrepreneurship Activity, 2008–2010

Figure 17: Di erences in Job Growth Expectations Between Nascent Entrepreneursand Owner-Managers in New Firms, by Economic Stage o Development and

Country, 2008–2010



80%

70%

60%

50%

40%

30%

20%

10%

0%

Vanuatu

India

Jamaica

Zambia

Bolivia

Uganda


Ghana


Algeria

Venezuela

Lebanon

Iran

Egypt

Angola

Saudi Arabia

Ecuador

Costa Rica

Brazil

Mexico

Trinidad and Tobago

Tunisia

Peru

China

Hungary

Argentina

South Africa

Dominican Republic

Montenegro

Uruguay

Latvia

Croatia

Colombia

Macedonia

Chile

Turkey

Greece

Finland

Spain

Italy

Germany

Netherlands

Norway

France

United Kingdom

Belgium

Slovenia

Denmark

United States

Korea

Ireland

Israel

Iceland

Job Expectations: 20 or More JobsJob Expectations: 5–19 Jobs


100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

2,5

2,0

1,5

1,0

0,5

0,0

Algeria

Angola

Egypt

Jamaica

Zambia

Saudi Arabia


Venezuela

Uganda

Bolivia


Vanuatu

India

Ghana

Lebanon

Iran

Chile

Trinidad and Tobago

Latvia

Tunisia

Costa Rica

Mexico

Macedonia

Uruguay

Hungary

Peru

South Africa

Croatia

Dominican Republic

Turkey

Brazil

Colombia

China

Montenegro

Argentina

Ecuador

Israel

Spain

Ireland

Greece

Slovenia

Netherlands

Belgium

Finland

United States

Italy

Germany

Iceland

Denmark

United Kingdom

France

Norway

Korea

Nascent entrepreneur (1) Owner-managers in new rms (2) Ratio (1) to (2); right axis



Percentage Expecting to Grow with at Least Five Employees in Five Years




is advised: these measures assume that the availability o new products and services, and the strength o com-petition, are evenly distributed throughout the world.By making comparisons within groups at similar devel-

opment levels, we control to some extent or di erencesin product availability and competitive intensity. But itis important to recognize that some economies scorehigh on these indices merely because they have rela-tively ew new products and low competition.

wo MENA countries, Saudi Arabia and Algeria,along with Vanuatu have the greatest amount o bothproduct/market and industry newness in the actor-driven group. In the e ciency-driven group, two LatinAmerican countries, Chile and Peru, show the highestlevels o innovation on both measures. Te innovation-driven group shows ewer distinct di erences on thismeasure, with Iceland among the economies ratedhigher on both strong and weak measures o product/market and industry newness.

An examination o innovativeness by businessstage shows that both new and nascent entrepreneursin many economies rate their products similarly.Prime examples o this can be seen in Saudi Arabia,Chile, Peru, Mexico, Uruguay, China, Denmark, Mon-tenegro and urkey. Neither geographic nor economiclevel can explain this pattern, since they come rom avariety o regions and development stages.

In other economies, nascent entrepreneurs rated in-novativeness at twice the level that new entrepreneursdid, again crossing multiple economic and geographicgroups ( rinidad and obago, Jamaica, Brazil, Venezu-ela, West Bank and Gaza, United States, United King-dom, Ghana, Uganda). Nascent entrepreneurs in thesecountries are really rating their expected level o inno-vativeness, since they are in the process o starting theirbusinesses. Tus, it could be surmised that nascent entre-preneurs in these economies are overly optimistic, andthat the actual level o innovativeness, once they start, isnot as high as they believed in the early stages. Interest-

ingly, these economies show low overall levels o innova-tiveness compared to their economic counterparts, sug-gesting a need to understand why this gap exists.

InnovationInnovation and entrepreneurship are closely con-

nected concepts. Joseph Schumpeter xvii argued that

entrepreneurs disrupt the market equilibrium by in-troducing new product-market combinations into amarket, teaching customers to want new things anddriving out less productive rms as their innovationsadvance the production rontier. Te result is higherproductivity and economic growth.

While Schumpeter portrays more radical change,William Baumol xviii argues that entrepreneurs may start businesses that are not very innovative, and thatinnovations may not necessarily result in new busi-nesses. But as Peter Drucker xix explains, the role o entrepreneurs is to search or, respond to and exploitchange. Te extent and nature o this change, and like-wise innovation, can vary considerably.

GEM assesses innovation in entrepreneurial busi-nesses by asking entrepreneurs to rate the newnesso their current products or services and the level o newness this represents or their customers. Tese twomeasures are combined into a single measure o prod-uct/market newness. Additionally, each entrepreneur isasked to rate industry newness, in terms o the degreeo competition the business aces: speci cally, whetherthey perceive there are “many”, “ ew” or “no other busi-nesses” o ering similar products or services.

Figure 18 shows ratings rom 54 economies onproduct/market novelty and industry newness. Te rst,and stronger, measure represents both product/marketnewness and industry newness. In essence, this indexmeasures the percentage o early-stage entrepreneurswith current products or services they consider noveland un amiliar to some or all customers, and that they also believe are o ered by ew or no other businesses.Te second, weaker measure indicates either product/market novelty or competitive uniqueness.

Figure 18 ranks economies within each economicgroup based on the relative prevalence o innovative-ness according to the weaker measure. A note o caution

“Innovation is more important than ever today. With fewer customers availableyou have to be the best to earn their business. Ideapaint has led the market withthe best in class dry-erase product. We made the wise decision of committingto innovation in order to defend our market position. Our commitment has paid off and allowed us to come out with better and better products and not onlyremain #1 but also take market share from our competitors.”John Goscha, Founder of IdeaPaint, USA.



43

the years 2008—2010. Te economies are grouped inthe three phases o development, ranked within thesegroups rom low to high based on having at least someinternational customers.

Te actor-driven economies have, on average, thelowest level o international customers in both the “atleast some” and “at least 25%” categories. As the reviewo industry sectors reveals, more entrepreneurs in the

actor-driven group participate in consumer-orientedsectors. Tese tend to be local businesses. In addition,broader market reaches could be impeded by rame-work conditions such as underdeveloped transportationand communication in rastructures or restrictive tradepolicies. Lebanon, however, is notable or its compara-tively high level o international participation with shortdistances to the country border or all entrepreneurs.

Te most distinct pattern in the e ciency-drivengroup is the range o international participation lev-els across these economies. For example, less than12% o entrepreneurs in Brazil cite at least some in-ternational customers, while this gure is as high as82% in Montenegro.

Perhaps nascent entrepreneurs are more likely to develop innovative o erings, but actors such ascompetitive imitation or a lack o ongoing innova-tion e orts could reduce the novelty o their productsas they start to establish themselves in their marketand industry environment. In addition, changing eco-nomic conditions may mean that entrepreneurs start-ing businesses in 2010 are pursuing a higher level o innovation that their predecessors.

Internationalization

Te third measure o entrepreneurial aspirationsdescribes the international orientation o early-stageentrepreneurs. Tis measure is based on the extent en-trepreneurs sell to customers outside their economies.Tis includes exports, but could also include interna-tional customers buying online, or traveling to an econ-omy or tourism or business.

Figure 19 shows the percentage o entrepreneursstating that at least some, and also more than 25%, o their customers are rom outside their economies in


100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Uganda

Ghana

Zambia

India

Egypt

Venezuela

Jamaica

Lebanon

Iran



Angola

Bolivia

Vanuatu

Algeria

Saudi Arabia

Brazil

Trinidad and Tobago

Hungary

Tunisia

Croatia

Ecuador

Macedonia

Montenegro

Colombia

Dominican Republic

Latvia

Costa Rica

Mexico

China

Uruguay

Argentina

South Africa

Turkey

Peru

Chile

Italy

Korea

Germany

United Kingdom

Netherlands

Spain

Finland

Belgium

United States

Israel

Slovenia

Norway

Denmark

Greece

Iceland

France

Ireland


Product is new to all/some customers orfew/no businesses offer same product

Product is new to all/some customers and few/no businesses offer same product

Figure 18: Innovation or Early-Stage Entrepreneurship Activity, 2008–2010






Te economies rom this region in the actor-drivenand innovation-driven groups also had high percent-ages o internationalization. Tese are relatively smallcountries with many country borders. Historically,

they were member states o larger countries, suchas the USSR and the Federal Republic o Yugoslavia,with considerable trade between states.

Across the economic development levels, countrieswith greater size (especially in terms o land area) ex-hibit lower international orientation. Tis is the case,

or example, in Iran, India, Brazil, China and Argentina.Te United States, although showing a high proportiono entrepreneurs with at least some international orien-tation, shows comparatively ew with more than 25% o customers rom outside the country.

While some economies may have large markets,and seemingly little need to go outside or customers,these markets may also attract international compe-tition. By competing on a global scale, however, en-trepreneurs can create globally competitive brands.At a macro level, internationalization (or lack o ) canimpact an economy’s comparative advantage to theextent local brands have ventured out to compete ona global scale.

Te innovation-driven economies had the highestaverage level o international customers in both cat-egories. Iceland and Belgium stand out as having highlevels o entrepreneurs with some international cus-

tomers. Belgium also had a remarkably high percentageo entrepreneurs at the 25% or more level—the highestacross the entire sample. Belgium has a very high per-centage o international trade to GDP and is located inthe center o economic activity in Europe. Iceland, onthe other hand, lies at the periphery. Tis suggests that,while international trade is easier in Belgium, it is a ne-cessity or Iceland i it is to be a wealthy country.

Wealthier economies o en ace intense competi-tive environments, especially since they have beenthrough the buildup o scale economies in their e -

ciency stage, resulting in power ul and establishedlarge organizations. Entrepreneurs can escape the ri-valry at home by taking their products to new marketsthat may value these o erings.

Tere are a ew noticeable geographic patternswithin the economic groupings. In the e ciency-driven group, ve Eastern European economies havethe highest percentage o international entrepreneurs(Croatia, Macedonia, Montenegro, Latvia and urkey).

Figure 19: Percentage o Early-Stage Entrepreneurs with International Orientation,2008–2010


90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Ghana

India

Iran

Uganda


Bolivia

Venezuela

Zambia

Egypt

Algeria

Vanuatu

Saudi Arabia

Angola

Jamaica


Lebanon

Tunisia

Brazil

China

Argentina

Costa Rica

Trinidad and Tobago

Peru

Ecuador

Hungary

Colombia

Mexico

Chile

Uruguay

Dominican Republic

South Africa

Latvia

Macedonia

Turkey

Croatia

Montenegro

Spain

Finland

Korea

Italy

United Kingdom

Denmark

Netherlands

Greece

France

Israel

Germany

Ireland

Slovenia

Norway

United States

Belgium

Iceland


Customers Outside Country: More Than 25% Customers Outside Country: 1–25%



45Capítulo 3 Contexto nacional y mujeres emprendedoras

must be emphasized that they unction best with anunderlying oundation o basic requirements ande ciency enhancers. For example, governmententrepreneurship programs will not be e ective

i inadequate health care and primary educationweigh heavily on the populace. Innovation-driveneconomies that have built relatively sophisticatedbasic requirements and e ciency enhancers, how-ever, can direct their attention toward enablingthese EFCs.

GEM has developed harmonized, single or mul-tiple-item measures o these EFCs in a survey instru-ment called the National Expert Survey (NES) xx . Eachyear, national teams personally interview and ad-minister the questionnaire to at least 36 nationalexperts xxi . Te analysis o their responses is dividedinto 12 sections xxii . Altogether, these results sum-marize the national perceptions o experts acrossthe EFCs.

Entrepreneurship Framework

Conditions—An Assessment of Institutional Quality by National Experts

Te GEM model (see Figure 3 ) illustrates rel-evant national conditions impacting economic de-velopment and activity more generally, and those

acilitating innovation and entrepreneurship more

speci cally in a society. Tree sets o rameworkconditions are expected to concern public andpolicy makers at di erent stages o development.Basic requirements are the underlying undamentalconditions required or a well- unctioning businessenvironment. Tese are usually the ocus o devel-opment e orts in actor-driven countries. As thesebecome relatively established, and an economy moves toward the e ciency stage, attention turnstoward e ciency enhancers.

Finally, there are actors aimed at stimulating andsupporting entrepreneurship activity. Tese nine En-trepreneurship Framework Conditions (EFCs) areillustrated and described in Figure 20 . While thesecan be addressed at any stage o development, it




Figure 20: The GEM Entrepreneurship Framework Conditions

EntrepreneurialFinance

Entry Regulation PhysicalInfrastructure

Cultural and SocialNorms

Government Policy GovernmentEntrepreneurshipPrograms

R&D Transfer Commercial and Legal Infrastructure

The availability ofnancial resources—

equity and debt—forsmall and mediumenterprises (SMEs)(including grants and subsidies).

Contains two compo-nents: (1) Market Dy-namics: the level ofchange in markets fromyear to year, and (2)Market Openness: theextent to which new

rms are free to enter

existing markets.

Ease of access to phy-sical resources—com-munication, utilities,transportation, land orspace—at a price thatdoes not discriminateagainst SMEs.

The extent to whichsocial and cultural normsencourage or allowactions leading to newbusiness methods oractivities that can poten -tially increase personalwealth and income.

The extent to whichtaxes or regulations areeither size-neutral orencourage SMEs.

The extent to whichtaxes or regulationsare either size-neutralor encourage SMEs.

The extent to whichnational research and development will lead tonew commercial oppor-tunities and is availableto SMEs.

The presence of propertyrights and commercial,accounting, and otherlegal services and ins-titutions that support orpromote SMEs.

EntrepreneurshipEducationThe extent to whichtraining in creatingor managing SMEs isincorporated within theeducation and trainingsystem at all levels(primary, secondaryand post-school).



47

ties among more economically developed countries.O course, experts in actor-driven economies may have di erent points o re erence in comparison totheir colleagues in the innovation-driven group.

Tis may explain why the observed di erences be-tween the three country groups are not very high.Factors that show the most pronounced di erencesacross phases o economic development includegovernment programs, R&D trans er and physicalin rastructure. Te low scores on the availability o

nance refect remnants o the 2008–2009 globalnancial crisis.

National cultures, in general or rom the perspec-tive o governments, may in some economies be armore positively disposed to entrepreneurship than inothers; there ore, a comparison o scores on each itemacross speci c countries may not yield strong conclu-sions. A key objective o the NES, however, is to pro-vide a better understanding about the conditions thatemerge inside the countries. Policy makers and otherrelevant stakeholders within a nation’s entrepreneur-ship ecosystem can bene t rom understanding theEFCs and how they are evaluated by national experts.In many countries, NES results serve as use ul barom-eters o the environment or entrepreneurial activities.

Table 4 provides a general overview o the resultson each actor or the 53 economies participating inthe NES in 2010, organized into the three economicdevelopment groups. Tis table identi es the top

three items with the lowest and highest scores withineach economy. Table 4 shows that many economiesshare both positive and negative elements. For ex-ample, 50 economies evaluate physical in rastruc-ture positively, including every e ciency-drivenand innovation-driven economy. Another EFC withmany positive evaluations is the commercial and le-gal in rastructure; exceptions are exhibited in threeAsian economies (China, aiwan and the Republic o Korea), which evaluate this actor negatively.

In 46 economies, education and training in pri-mary and secondary school is one o the three worst-per orming EFCs. A second EFC that has among thelowest scores is national policy with regard to regu-lation o new and growing rms; Finland is the only economy where experts evaluate this EFC positively.

In general, experts in more economically devel-oped countries gave higher ratings to EFCs, as isshown in Figure 21 . Tis is consistent with the GEMmodel and the notion that EFCs have higher priori-

Figure 21: Scores on Entrepreneurship Framework Conditions Rated by NationalExperts, by Stage o Development (Unweighted Country Averages)


Item Score (1=Mminimum, 5=Maximum) 5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

Finance

Governemnt

Programs

R&D

Transfer

Internal Market

- Openness

National Policy

- General

Education

- Primary and

Secondary School

Commercial

Infrastructure

Physical

Infrastructure

National Policy

- Regulation

Education

- Post School

Internal Market

- Dynamics

Cultural and

Social Norms

Ef ciency-Driven EconomiesFactor-Driven Economies Innovation-Driven Economies

Chapter 3 Entrepreneurship Framework Conditions—An Assessment of Institutional Quality by National Experts




Table 4: Entrepreneurship Framework Conditions: Three Valued Most Positive (+)and Three Most Negative (-), Per Country


-

-

-

------

--

--

++++

+

+++++

-

-

-

----

-

--

-

++

+++++++

-+

-

-

-

++

+

++

-

-+

-

--

-

-

++

++

++

+

-+

++

-

---

--

+

-

--

--------

----------

-

++-

+

+

+

+

++++

++-

---

-----

---

-

-

-

-

---

--

+++++++++++++++++++++++

---

--

+

+

+

++

++++

++

+

+

-

---

--

-

-

-

-

+

++

+-

+++

++

+++-

+

+

+

++

+

+

+

-

+

-

--

++-

---

--

+

-

--

---

--------------

+

+++

+++-

+

+

--

---

-

--

-

-

-

-

++++++++++++++++++

+

+

+

--

-

-

-

+

+

+

+

++

++

-++++++++

--

++

+

--

+

1 Finance2a Nat. Policy — General Policy2b Nat. Policy — Regulation3 Government Programs

4a Education — Prim. and Second.4b Education — Post-School 5 R&D Transfer6 Commercial Infrastructure

7a Internal Market — Dynamics7b Internal Market — Openness8 Physical Infrastructure9 Cultural and Social Norms

AngolaBoliviaEgypt GhanaGuatemalaIranJamaicaPakistanUgandaVanuatuWest Bank and Gaza StripZambia

Innovation-Driven EconomiesFinland FranceGermanyGreeceIceland Ireland

Israel ItalyJapanRepublic of KoreaNorwayPortugal SloveniaSpainSwedenSwitzerland United KingdomUnited States

Source: GEM National Expert Survey (NES)

1 2a 4a 7a2b 4b 7b3 5 86 9

ArgentinaBosnia and HerzegovinaBrazil ChileChinaColombiaCosta RicaCroatiaEcuadorHungaryLatviaMacedoniaMalaysiaMexico

MontenegroPeruRussiaSouth AfricaTaiwanTrinidad and TobagoTunisiaTurkeyUruguay




49

Entrepreneurship and the GlobalEconomy in 2010

who have worked in the nancial sector as employ-ees (possibly in activities o a somewhat entrepre-neurial nature) might look or ways to earn theirown income, perhaps in a di erent sector. Somemay see better prospects or starting companiesbecause the cost o human and capital resourceshas dropped. Others, having considered the entre-preneurship option in good times, might opt oremployment over the next ew years, saving theirentrepreneurial aspirations or later.

Consequently, some o the sel -employed may not be very entrepreneurial and some employeesmay, in act, be very entrepreneurial xxiv . A simplestudy o the number o sel -employed individualsor start-ups does not there ore lead to satis actory answers about the impact o a recession on entre-preneurship activity. Te GEM methodology andthe richness o its data, however, can help overcomethis limitation and provide more intuitive and rel-evant insights.

Tis analysis addresses two key questions. Terst examines the extent recessions a ect new en-

trepreneurship activity. On the one hand, we may expect ewer start-up activities because o lower per-ceived opportunities. On the other, start-up activi-ties may increase as a result o more people startingbusinesses out o necessity. Yet another explanationis that recessions can ree up old markets and re-sources, and some people may actually see new op-

Although the global economic downturn de-livered its most severe blows in 2008 and 2009, anumber o countries have su ered a vivid a ter-shock in 2010. When this report went to print,problems still persisted in Europe. he Europe-an Union and IMF structured bailouts to rescueGreece and Ireland rom bankruptcy, while po-tentially similar scenarios were looming or someother European countries.

In this chapter, we use nine years o GEM datato examine patterns in entrepreneurship aroundmajor shi s in the economy. In addition, we revealresults o speci c questions that were included inthe adult population survey in 2009 and 2010; thoseentrepreneurs who where polled gave their impres-sions about starting and operating their businessesin the current environment.

William Baumol, in a seminal article on entre-preneurship and development, argued or a con-stant ‘rate’ o entrepreneurship across societies xxiii .

Tis rate would be regulated by institutions, rulesand norms, which determine the extent entrepre-neurship is productive and contributing towardeconomic development.

I Baumol is correct, one could argue that reces-sions cause shi s in the balance o various types o entrepreneurship activities, rather than a reductionin entrepreneurship itsel . For example, individuals




Analysis of Entrepreneurship inIreland: 2002-2010Figure 22 and Figure 23 show the evolution o

entrepreneurial attitudes and activity in the Irishworking-age population rom 2002 to 2010 xxv .Consistent with the ndings or Argentina and theUnited States in the 2009 GEM report xxvi , the Irishpopulation appears to have acted, rom around2006, as i it anticipated trouble ahead.

As Figure 22 indicates, perceived opportunitiesto start a business (among the Irish working-agepopulation) declined about 50% rom 2007 to 2010.Te ear o ailure rate in 2010 showed no deviation

rom the long-term trend, however, while this indi-

cator rose in the U.S. be ore the recession. Fear o ailure is already comparatively higher in Ireland,though, with average scores or an innovation-driv-en economy, while the U.S. typically rates low onthis measure.

With regard to entrepreneurship activity, Figure23 shows that the number o people involved innew start-ups declined moderately between 2006and 2008. Between 2008 and 2010, the number o individuals actually owning and managing a new

rm also seems to be in decline. Perhaps the mostremarkable indicator is the staggering growth in the

percentage o necessity-motivated early-stage entre-preneurs rom 2007 to 2010.

Overall, people in Ireland were not seeing asmany opportunities or entrepreneurship startingin 2007, the year be ore the recession hit. Fewerpeople were setting up businesses a couple o yearsbe ore the recession started, and a smaller amounto entrepreneurs were running new businesses dur-ing the recession. In addition, the percentage o ne-cessity entrepreneurs rose markedly just be ore andduring the recession. Tis all suggests that peoplewere not optimistic about prospects or entrepre-neurship be ore the recession, and were possibly more likely to hold onto their jobs, rather thanstart businesses with opportunity motives. Yet with

ewer job prospects during these challenging times,some people needed entrepreneurship as a sourceo income.

portunities to start businesses, given the change intheir circumstances generated by the recession.

Tus, this rst question cannot be answered

solely by observing the annual number o start-ups. What matters are what types o businesses arebeing set up, the underlying motivations or start-ing them and the kind o aspirations the entrepre-neurs have or their businesses. GEM can provideinsights into this issue because the methodology explicitly considers di erent types and phases o entrepreneurship activity.

Te second question explores the extent entre-preneurship serves as a mechanism or reversing thedownward trend, even shi ing it into an upward one.Several theories propose that the best innovationshave been initiated in times o recession (or depres-sion, as in the 1930s), when societies were more opento change. Prior to these downturns, prevailing busi-ness models were considered success ul and therewas little call or change, impeding new introduc-tions rom taking place on a signi cant scale. In timeso recession, however, old assumptions are broughtinto question. New entrants can gain a oothold asincumbents reel rom the shock o change. Duringthe years preceding the 2008–2009 recession, R&Dinvestments have revealed some potentially ruit ulareas such as green technology.

In this section, we highlight the evolution o en-trepreneurial attitudes, activity and aspirations inseveral countries that have been involved in GEMthroughout the 2002–2010 period, a period refect-ing a ull business cycle. Te 2009 GEM Global Re-port highlighted the United States and Argentinaas special cases o countries hit by severe recession(Argentina in 2000 and the United States in 2008–2009). In this report we show the development o some o the main GEM indicators over time orIreland, a country that has witnessed particularly severe nancial problems in 2010.

4.1 The Impact o Recessionson Entrepreneurship:Evidence rom GEM Data



51

Figure 22: Entrepreneurial Attitudes in Ireland, 2002–2010

Figure 23: Entrepreneurial Activity in Ireland, 2002–2010



60%

50%

40%

30%

20%

10%

0%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Percentage of 18–64 Population

2002 2005 20082003 2006 20092004 2007 2010

Perceived Opportunities Fear of FailureStart-Up Intentions Good Career Choice (Right Axis)

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

35%

30%

25%

20%

15%

10%

5%

0%

Percentage of 18–64 Population

Percentage of Early-Stage Entrepreneurial Activity

2002 2005 20082003 2006 20092004 2007 2010

Nascent Entrepreneurial Activity RateDiscontinuation Rate Necessity Motivation (Right Axis)

Young Firm Prevalence Rate

Chapter 4 Entrepreneurship and the Global Economy in 2010




Te next analysis ocuses on all the economiesthat consistently participated in GEM over the2002–2010 period, based on the ollowing ourmain indicators o attitudes and activity:

• Perceived opportunities to start businesses by the working age population

• Te percentage o owner-managers in newrms in the working age population

• Te percentage o early-stage entrepreneursthat have started out o necessity

• Te percentage o early-stage entrepreneurs

expecting to have at least 5 employees

Te 2002–2010 period is divided into three timerames: (1) 2002–2004, a er the dot.com bubble

burst, (2) 2005–2007, a time generally characterizedby expansion; and (3) 2008–2010, during the globalslowdown. Te selection o economies is based onthe availability o an adequate sample o entrepre-neurs in each period. Tis is necessary in order tointerpret the di erences over time with su cientstatistical precision xxvii .

Figure 24 portrays the development o perceived

opportunities to start businesses by the working agepopulation. In our out o the six e ciency-driveneconomies included in this analysis, opportunity perception has grown in the most recent time pe-riod. China has remained stable on this indica-tor throughout the entire period, while Argentinashowed a drop; perceptions are still higher thanthe 2002–2004 period, however, when this country struggled to emerge rom its 2000 nancial crisis.

In the innovation-driven countries, a di erentpattern is evident. Nine out o twelve countries ex-hibited a decline in perceived opportunities in thepast three years, compared to 2005–2007. Te mostremarkable relative drop in this attitude in the morerecent period can be observed in Spain and Ireland.Germany stood out with its rise in perceived oppor-tunities, while the United States seemed to recover

rom the low perceptions recorded in 2005–2007.

4.2 Analysis o GEM Economies:2002–2010

A comparison o Figure 24 with Figure 26 andFigure 27 demonstrates that opportunity percep-tion and actual involvement in new business ac-tivities can exhibit some consistency. For instance,

while perceptions in Chile were rising, prevalencerates o owner-managers in new rms also showedan increase (see Figure 25 ). Additionally, the resultsin Figure 26 indicate that necessity entrepreneur-ship in Chile increased only slightly in the mostrecent period, while the degree o early-stage entre-preneurs with some growth expectations (Figure 27) remained high, despite a small drop. ogether, theresults or this newest OECD-member may refecta population with increasingly positive percep-tions and job opportunities. Figure 27 also showsremarkable increases in job growth expectations inSouth A rica, while those in China and Argentinahave been tempered somewhat.

As Figure 25 shows, entrepreneurial activity inthe innovation-driven economies has dropped inGermany, Norway and Spain in the most recent pe-riod. For the United States and Denmark, a declinewas already set in motion during 2005–2007. TeNetherlands has shown a remarkable rise in activ-ity by individual owner-managers o new rms. Tesame holds true or Greece. However, Figure 26shows that while necessity-driven activity remainedlow in the Netherlands, it increased in Greece, indi-cating that the latter country’s rise was mostly dueto necessity.

Te percentage o early-stage entrepreneursexpecting to employ at least ve people within

ve years remained low among innovation-driveneconomies. Concurrently, necessity-driven entre-preneurship increased in the United States and inIreland—as Section 4.1 pointed out. We shouldnote that, although most necessity-motivated newventures are associated with marginal businesses, asigni cant minority o these may very well turn outto be highly success ul. In Ireland or example, the

higher rate o necessity-driven entrepreneurship hasnot (yet) led to a signi cant decrease in the percent-age o early-stage entrepreneurs with job growthexpectations (Figure 27) , even though most o theother economies tended to show small declines inthis measure.



53

Figure 24: Percentage in the Working Age Population Perceiving Good Opportuni-ties to Start a Business in the Area Where They Live, by Country, or 2002–2004,2005–2007 and 2008–2010, Respectively 1

Figure 25: Owner-Managers o New Firms: Percentage in the Working Age Popula-

tion, by Country, or 2002–2004, 2005–2007 and 2008–2010, Respectively1

1 Economies are ordered according to their point estimate for the 2008–2010 period, within country groups.Source: GEM Adult Population Survey (APS)


70%

60%

50%

40%

30%

20%

10%

0%


Hungary

China

Brazil

Argentina

Chile

Spain

Greece

Belgium

Ireland

Germany

Italy

Netherlands

Iceland

Norway

Denmark

Innovation-Driven EconomiesEf ciency-Driven Economies

South

Africa

United

Kingdom

United

States

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

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2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

12%

10%

8%

6%

4%

2%

0%


Innovation-Driven EconomiesEf ciency-Driven Economies

Hungary

Chile

Argentina

Brazil

China

Belgium

Germany

Italy

Denmark

Spain

Ireland

Netherlands

Iceland

Norway

Greece

South

Africa

United

Kingdom

United

States

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10

2002-04

2005-07

2008-10




Figure 26: Percentage of Early-Stage Entrepreneurs indicating That They Are Invol-ved in Entrepreneuship out of Necessity, by Countriy, for 2002-2004, 2005-2007and 2008-2010, Respectively 1

Figure 27: Growth Expectations: Percentage of Early-Stage Entrepreneurs Expec-ting to Have at Least 5 Employees Five Years from Now (or after the Start-Up) for

2002–2004, 2005–2007 and 2008–2010, Respectively 1

1 Economies are ordered according to their point estimate for the 2008–2010 period, within country groups.Source: GEM Adult Population Survey (APS)

60%

50%

40%

30%

20%

10%

0%40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

sruenerpertnE egatS-ylraE fo egatnecreP

Innovation-Driven EconomiesEfciency-Driven Economies

yragnuH

anihC

lizarB

anitnegrA

elihC

niapS

eceerG

muigleB

dnalerI

ynamreG

ylatIsdnalrehteN

dnalecI

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sruenerpertnE egatS-ylraE fo egatnecreP

60%

50%

40%

30%

20%

10%

0%

Innovation-Driven EconomiesEfciency-Driven Economies

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

40-2002

70-5002

01-8002

yragnuH

anihC

lizarB

anitnegrA

elihC

niapS

eceerG

muigleB

dnalerI

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ylatIsdnalrehteN

dnalecI

yawroN

kramneD

htuoS

acirfA

detinU

modgniK

detinU

setatS

–



55

his section shows how entrepreneurs in thethree economic groups perceived the impact o the global recession or their businesses. hisanalysis is based on special questions that havebeen included in the GEM 2009 and 2010 surveys.

he results show how entrepreneurs in di erentphases o the entrepreneurship process perceivetheir own business activities in the shadow o theeconomic crisis.

Opportunities for Starting and Growing a Business Compared toOne Year AgoIn the GEM 2009 and 2010 surveys, two ques-

tions were added to assess how early-stage entre-preneurs evaluated the conditions or starting a busi-ness in comparison to the previous year. Figure 28 shows results or those countries in which in orma-tion was available or both years. In 2009, an averageo 60% o the entrepreneurs ound it more di cultto start a business. Tis percentage dropped to 50%

in 2010xxviii

.Tere appear to be substantial di erences among

the economies, however. In both years, more entre-preneurs in actor-driven economies, on average,claimed that it was more di cult to start a businessthan in other economies. Many o these entrepre-neurs have little contact with global nancial mar-kets, so they would be less a ected by changes inthe world economy. However, they are more likely necessity-driven and may perceive their circum-stances as increasingly challenging.

E ciency-driven entrepreneurs were among themost negative about the ease o starting businessesin 2009. Tis measure improved substantially in2010, refecting their greater connection to global

4.3 Entrepreneurs’ Impressions o the Impact o the Recessionon Entrepreneurship Activity

markets, compared to the actor-driven group. Im-provements were particularly noticeable in someLatin American countries (Argentina, Brazil, Chile,Colombia, Uruguay) and Eastern European coun-

tries (Hungary, Latvia, Russia).

Te greatest gains, however, were ound amongthe innovation-driven economies. In Finland andSlovenia, the proportion o early-stage entrepre-neurs citing it was more di cult to start businessesin 2010 declined to hal the level it was in 2009.Results rom Iceland were also encouraging; ar

ewer entrepreneurs evaluated this item negatively in 2010 (44%) compared to 2009 (80%), when they were in the midst o their nancial crisis.

Still, many countries in the innovation-drivengroup remain pessimistic, with more than hal o their early-stage entrepreneurs stating it was hard-er to start a business in 2010 compared to the yearbe ore. Tis includes European countries Greece(76%), Ireland (56%), Italy (60%), Portugal (62%)and Spain (72%), as well as the Republic o Koreaand Israel (both 60%). Tis con rms that turbulenteconomic conditions can diminish prospects ornew start-ups.

Perceptions about the di culties o starting abusiness by early-stage entrepreneurs correspondclosely with expectations or growth by establishedentrepreneurs. Countries with negative percep-tions in Figure 28 also dominate on the negativeside in Figure 29 . Exceptions include China, whereestablished entrepreneurs see more positive devel-opments in terms o growth potential, comparedwith the greater di culties perceived by early-stageentrepreneurs. Tis concurs with the drop in EArate in China or 2010.

Other notable positive developments in termso growth potential were observed in establishedentrepreneurs rom Uruguay and Chile. Russia and

Latvia also saw substantial improvements in thismeasure; nevertheless, almost hal o the estab-lished entrepreneurs still saw lower expectations

or growth in 2010 over the previous year.





Figure 28: Percentages o Total Early-Stage Entrepreneurs Who Find Starting aBusiness Now More Di fcult Compared to One Year Ago, 2009 and 2010

Figure 29: Percentages o Established Entrepreneurs Whose Expectations or

Growth Are Lower Compared to One Year Ago, 2009 and 2010



100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%


2009 2010

Saudi Arabia


Uganda

Iran

Guatemala

Jamaica

Uruguay

Peru

Chile

Brazil

Latvia

Colombia

Argentina

Russia

Hungary

Tunisia

Malaysia

South Africa

Croatia


China

Ecuador

Romania

Finland

Slovenia

Netherlands

Switzerland

Norway

Germany

Belgium

France

Iceland

Japan

United States

Italy

Korea

Israel

Spain

Greece


100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%


2009 2010

Uganda

Saudi Arabia

Iran


Jamaica

Guatemala

Uruguay

Chile

China

Brazil

Peru

Ecuador

Malaysia

Argentina

Colombia

South Africa

Latvia

Russia

Tunisia

Hungary

Croatia


Romania

Finland

France

Switzerland

Netherlands

United Kingdom

Israel

Iceland

Norway

Slovenia

Belgium

Germany

United States

Japan

Italy

Korea

Spain

Greece



57

Figure 30: Impact o the Global Economic Slowdown on Entrepreneurs’ Perceptiono Opportunities or Their Businesses, According to the Entrepreneurs (UnweightedCountry Averages)


The Recession and the Impact onPerceived Business Opportunities

Te 2010 adult population surveys asked entrepre-neurs or their views on the e ect o the “global economicslowdown” on business opportunities or their start-up orexisting businesses. Figure 30 summarizes the results by economic group and type o entrepreneur. It is clear thata majority o entrepreneurs in all phases o economic de-velopment see ewer opportunities or their business. Still,a quarter o nascent entrepreneurs in innovation-drivencountries see more opportunities or their business, at ahigher requency than the other two groups.

More notably, in our o these countries the percent-age o nascent entrepreneurs with positive perceptions

relative to the global slowdown outnumbered thosewith negative perceptions: Germany, the Netherlands,Sweden and Switzerland. Figure 30 shows that nascententrepreneurs and owner-managers o new rms tend-

ed to be more optimistic than established entrepreneurs,particularly in innovation-driven countries. It shouldbe pointed out that these questions are relative, and incountries that have been relatively una ected by theglobal slowdown, entrepreneurs may see little di erence

rom one year to the next.

By contrast, in innovation-driven countries, wheremuch has changed, a signi cant minority o entrepre-neurs see opportunity where others see danger. Teseindividuals tended to be younger and better educated,and generally had higher aspiration levels in terms o job expectation and innovation xxix .

70%

60%

50%

40%

30%

20%

10%

0%

Ef ciency-Driven EconomiesFactor-Driven Economies Innovation-Driven Economies

Fewer BusinessOpportunities



More BusinessOpportunities



About the Same

About the Same

About the Same

Nascent Entrepreneurs Owner-Managers of Established BusinessesOwner-Managers of New Businesses


“We are investing in new equipment for expansion of the business. We believethat this recession will not last and we want to be in a position to take ad-vantage of the upswing when it happens. This can happen quickly when airlinesbegin hiring, which we are already beginning to see signs of. Past experience hasshown that those who defer investment during a recession pay the price whenthe upswing comes, as they are unable to reposition themselves quickly enough.”Feargal Keogh, CEO and Co-founder of Simtech, Ireland




nesses particularly where and when basic require-ments are not, as yet, ully developed. o the extentthese and other actors do not act as deterrents totheir e orts, these entrepreneurs can thrive and theirsocieties will bene t. Entrepreneurship can thus pro-vide a source o income when an economy cannot yetsupply enough jobs or other alternatives or generat-ing wages or salaries, providing positive social value.

As economies develop, a drop in necessity entre-preneurship may signal positive gains in develop-ment, when large organizations join the economicecosystem to help provide jobs to a populace. Buteven in wealthier regions, necessity-based activity o ers a source o income during tough economictimes, as it has during the 2008–2009 recession.

Societies also need opportunity entrepreneurs toensure new ideas come into being through the energy o enterprising individuals. Many people appear tosee ewer reasons or becoming entrepreneurs whenthey have stable job options. Surely, some will leavethese jobs to become entrepreneurs. Tey may do sobecause they see opportunities, and have particularattitudes and belie s to inspire them. Nonetheless, themotivation to take these paths may diminish whenother seemingly more attractive options abound.

Where incentives or being an employee sub-stantially exceed those associated with becomingan entrepreneur, policy makers may consider either

Conclusions and Implications

GEM o ers a wealth o measures that can providegreater understanding about the nature and level o entrepreneurship worldwide. A number o implica-tions can be drawn rom this year’s results, and we willidenti y a ew key ones in this chapter. It is importantto recognize, however, that each economy representsa unique context. Tere ore, it is nearly impossible tomake speci c policy prescriptions at the global level.Te ollowing general recommendations are designed

to help in the raming o country-speci c policies.

It’s Not Just About More Entrepreneurs

Te analysis o the three economic stages shows thatlower development levels typically have a high numbero individuals involved in starting and developing newbusinesses. Yet these people are more likely to have beenpushed into entrepreneurship by necessity. Tey areless likely to grow innovative businesses, reach or highgrowth and seek international markets. Consequently,entrepreneurship does not impact an economy simply through more individuals starting businesses. It is im-portant to consider quality measures such as those relat-ing to the motivations and ambitions o entrepreneurs.

Facilitate Necessity, EncourageOpportunity

Economies need people to sel -employ whenrequired. Necessity-based entrepreneurs start busi-



59

nomic level enables one to understand what mightbe unique at a particular phase o development, orto learn rom others in the same economic situa-tion. Across the development groups, or example,

the innovation-driven populace saw entrepre-neurs as having high status, but they showed lessinterest in becoming one. he e iciency-driveneconomies, on the other hand, generally thoughtentrepreneurship was a good career choice, de-spite not seeing much media attention or statuswith regard to entrepreneurs.

In addition, the patterns exhibited in geographicregions reveal an opportunity or regional studieso entrepreneurship, to understand how similari-ties among neighbors infuence entrepreneurshipand perhaps to outline approaches or bringingabout improvements. For instance, the sub-Saharan( actor-driven) and the Latin American/Caribbean(e ciency-driven) economies exhibited high oppor-tunity/capability perceptions and high EA, but lowgrowth aspirations. Conversely, the MENA region( actor-driven) and the Eastern European (e cien-cy-driven) economies had the opposite: low oppor-tunity/capability perceptions and low EA, but highgrowth projections.

Promote Entrepreneurship inMany Forms

Entrepreneurship in a society can be portrayedas a port olio o di erent business phases and types.Individuals in the process o starting businessesbecome new entrepreneurs, and then establishedbusiness owners. A variety o entrepreneurs at allphases will ensure this activity is continually re-newed and sustained. Economies also need growthbusinesses to create new jobs. Tey need innova-tion to boost their societies’ comparative advantage.And because markets are increasingly global, they must have entrepreneurs capable o internationalcompetition. Tese entrepreneurial endeavors may emerge, not only in start-ups, but also social enter-prises, amily businesses, corporate environmentsand other contexts.

In addition, economies need many di er-ent types o entrepreneurs, including those thatmay be underrepresented: younger and older in-dividuals, women and poorer or disadvantagedgroups. Some economies, or instance, showed

reducing the advantages employees receive relativeto entrepreneurs, or providing greater bene ts orentrepreneurs, depending on the speci c circum-stances in their economies.

o sum up, while basic requirements allow ne-cessity-based entrepreneurs to get started, entre-preneurship ramework conditions (EFC) may beimportant in promoting opportunity entrepreneurs.Policy makers may there ore examine how they canboth enable necessity motivation and/or encourageopportunity motivation.

Ensure Both Entrepreneurial Dynamism and Stability

Dynamism happens through the birth o newrms, led by individuals with novel ideas that create

new value. Some o these births displace old busi-nesses that have outlived their use ul lives; perhapstheir ounders go on to start new rms or otherwiseapply their learning to help the entrepreneurialecosystem. Starts and stops can also signal experi-ments, many o which will ail, but some o whichwill produce tremendous wins. Tese experimentsalso provide valuable lessons to entrepreneurial in-dividuals who can try again. Failure is there ore acomponent o entrepreneurship. As such, both en-trances and exits are important to a dynamic entre-

preneurial society.

Stability is disrupted, however, when thoseindividuals that can otherwise bring promisingideas to li e are thwarted by conditions in theirenvironments—social expectations, lack o a legalin rastructure, government policies, economic in-stability and so orth. For example, the actor-driv-en economies in the 2010 GEM survey exhibiteda tendency toward ewer established businessesrelative to nascent and new ones, and a higher rateo discontinuance. A lot o unsustainable businessstarts may be a misuse o resources. Start-up e orts

need to be accompanied with the ability or thesebusinesses to have their best chance to test andreach their potential.

Learn from Your Economic Peers and Your Geographic Neighbors

Entrepreneurship is unique in every economy.Yet the study o entrepreneurship relative to eco-

Chapter 5 Conclusions and Implications




Promote an Entrepreneurial Mindset Across the Population

An economy’s entrepreneurial capacity requiresindividuals with the ability and motivations to startbusinesses. Tese entrepreneurs, however, will needto rely on a wide variety o personal and pro essionalsupport mechanisms: amilies, advisors, governmento cials, creditors and investors, suppliers and cus-tomers and so orth. Tese stakeholders need to bewilling to support entrepreneurs, perhaps takingsome risks along with them.

In addition, societal-level impressions can im-pact entrepreneurs. Non-entrepreneurs with entre-preneurial mindsets may indirectly stimulate othersto start businesses. E orts to promote entrepreneur-ship may there ore bene t rom improving the per-spective o the wider population. Tis highlights, orinstance, the role o media in promoting positive im-ages o entrepreneurs. It also underscores the valueo training and education in preparing individualswho can pursue entrepreneurship when needed orwhen opportunity strikes.

Toward the Future

GEM in 2010 has reached across the globe to as-sess entrepreneurship across multiple levels o eco-

nomic development, attaining greater geographiccoverage than at any time during its 12-year history.As GEM continues to grow, so will its impact—onpolicy makers, researchers, educators and most o all,people. People become entrepreneurs, and in so do-ing, create sources o income or their amilies. Tey bring to li e new products and services that providevalue and improvements to their communities andto those around the world. As such, they create jobsand contribute to the economic development andcomparative advantage o their societies.

We invite you to refect on, share and discuss thisreport. It is our hope that in so doing, we can workto improve the lives and well-being o those aroundthe world, employing entrepreneurship where, whenand how it is needed most.

ewer women, or a low number o younger orolder entrepreneurs. When an economy neglects alarge demographic in its entrepreneurship ranks,it misses an opportunity to ully bene it rom its

entrepreneurial potential.

Consider Development Level WhenDesigning Entrepreneurship Initiatives

For actor-driven economies, it is critical todevelop a su icient oundation o basic require-ments that can support sustainable businesses. En-trepreneurs can bring greater e iciency to the ag-riculture, extraction and other industries typically

ound in their development stage. But they canalso lay the groundwork or uture growth in theireconomies and the emergence o new industries.

hese e orts there ore create value or their soci-eties, but also contribute toward the well-being o their uture generations.

For e iciency-driven economies, the nurturingo economies o scale attracts more growth- andtechnology-oriented entrepreneurs, creating moreemployment opportunities. Although large irmsdominate, this opens up niches or small and me-dium enterprises that can per orm supply chain,service and other activities. his process dependson the oundation o basic requirements like in-

rastructure and macroeconomic stability, butincreasingly requires inancial markets, highereducation, technological readiness and other e -

iciency enhancers.

For innovation-driven economies, there is great-er potential or innovative entrepreneurial activity leading to the introduction o new combinations o products and markets. As this requires greater reli-ance on knowledge, there will need to be R&D trans-

er mechanisms and a commercial and legal in ra-structure, among other entrepreneurial rameworkconditions. But it also assumes an adequate base o

the more undamental actors.



61

o at least 2,000 individuals aged between 18 and 64in each participating economy. In addition, GEM na-tional teams conduct National Expert Surveys (NES)to obtain insights about particular actors impactingentrepreneurship in each country.

GEM aims to be the leading source o in orma-tion and analysis about entrepreneurship across theglobe. Te study employs an original methodology

that has been continually re ned over 12 years. Datacollection ollows strict quality control procedures.Tis strong methodology, and other distinct eatures,contributes to the project’s uniqueness and value orthose seeking to benchmark and make comparisonsabout entrepreneurship among nations. Tanks tothe e ort and dedication o hundreds o entrepre-neurship scholars as well as policy advisors acrossthe globe, the GEM consortium is a unique networkbuilding a distinct data set.

Each economy participating in the GEM proj-ect has an academic team, which selects a local sur-

vey vendor to conduct the APS and then monitorsthe process or quality control. he GEM centralcoordination team and its specialized sta ensureeach team ollows strict GEM research standards.

his strengthens data quality and allows or theharmonization o data across all participatingcountries. All teams and vendors there ore adoptthe same methodology.

Appendix 1: Background on GEM

Te Global Entrepreneurship Monitor was con-ceived in 1997 by Michael Hay o London BusinessSchool (LBS) and Bill Bygrave o Babson College.LBS and Babson unded a prototype study that year.

en national teams conducted the rst GEM Globalstudy in 1999 with Paul Reynolds as the principalinvestigator. Te Global Entrepreneurship ResearchAssociation (GERA) was ormed in 2004 to serveas the oversight body or GEM. GERA is a not- or-

pro t organization governed by representatives o the national teams, the two ounding institutions andsponsoring institutions.

GERA’s mission is to contribute to global eco-nomic development through entrepreneurship. oachieve this, GERA seeks to increase worldwideknowledge about entrepreneurship by conductingand disseminating world-class research that:

1. Uncovers and measures actors impacting thelevel o entrepreneurial activity among economies,

2. Identi es policies that may enhance entrepre-

neurial activity, and3. Increases the infuence o education in sup-

porting success ul entrepreneurship.

Since the rst study in 1999, more than 80 nation-al teams have participated in the GEM consortium.Led by a central coordination team, the consortiumadministers an annual adult population survey (APS)



63

Appendix 2: Glossary of MainMeasures and Terminology

Entrepreneurial Attitudes and Perceptions

Entrepreneurial Activity

Measure Description

Perceived Opportunities Percentage of 18–64 age group who see good opportunities to start a business in thearea where they live

Perceived Capabilities Percentage of 18–64 age group who believe to have the required skills and knowledgeto start a business

Entrepreneurial Intention Percentage of 18–64 age group (individuals involved in any stage of entrepreneurial activity excluded) who intend to start a business within three years

Fear of Failure Rate Percentage of 18–64 age group with positive perceived opportunities who indicate that fear of failure would prevent them from setting up a business

Entrepreneurship asDesirable Career Choice High-Status Successful Entrepreneurship

Media Attention forEntrepreneurship

Percentage of 18–64 age group who agree with the statement that in their country, most people consider starting a business as a desirable career choicePercentage of 18–64 age group who agree with the statement that in their country,successful entrepreneurs receive high status

Percentage of 18–64 age group who agree with the statement that in their country, theywill often see stories in the public media about successful new businesses

Nascent EntrepreneurshipRate

New Business OwnershipRate

Percentage of 18–64 age group who are currently a nascent entrepreneur, i.e., activelyinvolved 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 three months

Percentage of 18–64 age group who are currently an owner-manager of a new busi-ness, i.e., owning and managing a running business that has paid salaries, wages orany other payments to the owners for more than three months, but not more than42 months

Continued




Entrepreneurial Aspirations

Entrepreneurial ActivityMeasure Description

Total Early-Stage Entre-

preneurial Activity (TEA)Established BusinessOwnership Rate

Business DiscontinuationRate

Necessity-DrivenEntrepreneurial Activity:Relative Prevalence

Improvement-DrivenOpportunity Entrepreneurial Activity: Relative Prevalence

Percentage of 18–64 age group who are either a nascent entrepreneur or owner-man-

ager of a new business (as de ned above).Percentage of 18–64 age group who are currently owner-manager of an established business, i.e., owning and managing a running business that has paid salaries, wagesor any other payments to the owners for more than 42 months.

Percentage of 18–64 age group who have, in the past 12 months, discontinued a busi-ness, either by selling, shutting down or otherwise discontinuing an owner/management relationship with the business. Note: This is not a measure of business failure rates. Percentage of those involved in total early-stage entrepreneurial activity (as de ned above) who are involved in entrepreneurship because they had no other optionfor work.

Percentage of those involved in total early-stage entrepreneurial activity (as de ned above) who (i) claim to be driven by opportunity, as opposed to nding no other optionfor work; and (ii) indicate the main driver for being involved in this opportunity is being

independent or increasing their income, rather than just maintaining their income.

High-Growth ExpectationEarly-Stage Entrepre-neurial Activity: RelativePrevalence

New Product-Market Oriented Early-StageEntrepreneurial Activity:Relative Prevalence

International OrientationEntrepreneurial Activity

Percentage of total early-stage entrepreneurs (as de ned above) who expect to employat least 20 employees ve years from now

Weak measure: expects at least ve employees ve years from now

Percentage of total early-stage entrepreneurs (as de ned above) who indicate that their product or service is new to at least some customers and indicate that not manybusinesses offer the same product or service

Weak measure: product is new or not many businesses offer the same product orservice

Percentage of total early-stage entrepreneurs (as de ned above) with more than 25%

of the customers coming from other countriesWeak measure: more than 1% of the customers coming from other countries




Country Interview Procedure Sampling Method Frequency

Hungary

Iceland IranIreland

Israel ItalyJamaicaJapanKoreaLatvia

Macedonia

MalaysiaMexicoMontenegro

NetherlandsNorway

PakistanPeru

Portugal 1

RomaniaRussia

Saudi ArabiaSloveniaSouth Africa

Spain

Sweden

Switzerland TaiwanTrinidad and TobagoTunisia

TurkeyUgandaUnited Kingdom

United States

UruguayVanuatuWest Bank & Gaza Strip

Zambia

2000

200133592000

2007 300022982006 20012001

2002

201026052000

35022002

2007 2108

3012

22351736

200030123279

26388

2492

200220012016 2001

24012267 3000

4000

203411821992

2039

Mobile Phone

Fixed-Line Phone and Mobile PhoneFace-to-FaceFixed-Line Phone and Mobile PhoneFixed-Line PhoneFixed-Line PhoneFace-to-FaceFixed-Line PhoneFixed-Line PhoneFixed-Line Phone and Mobile PhoneFixed-Line Phone and Mobile PhoneFace-to-FaceFace-to-FaceFace-to-Face

Fixed-Line PhoneFixed-Line Phone and Mobile PhoneFace-to-FaceFace-to-Face

Fixed-Line Phone and Mobile PhoneFace-to-FaceFace-to-Face

Mobile PhoneFixed-Line PhoneFace-to-Face

Fixed-Line Phone (re-spondent may request to

be called back on mobile)Fixed-Line Phone and Mobile PhoneFixed-Line PhoneFixed-Line PhoneFace-to-FaceFixed-Line Phone and Mobile PhoneFixed-Line PhoneFace-to-FaceFixed-Line Phone and Mobile PhoneFixed-Line Phone and Mobile PhoneFixed-Line PhoneFace-to-FaceFace-to-Face

Face-to-Face

Random Dial from List

Random Dial from List Random Sampling Using Census Data (Multi-Staged)Random Digit Dialing

Random Digit DialingRandom Dial from List Random Sampling Using Census Data (multi-staged)Random Digit DialingRandom Digit DialingRandom Digit Dialing and Random Dial from List

Random Digit Dialing (Mobiles); Random Dial from List (Fixed-Line)Random Sampling Using Census DataRandom Sampling Using Census DataRandom Sampling Using Census Data and Voter Records

Random Dial from List Random Dial from List

Random Sampling Using Census DataRandom Sampling from List Using Jump Interval (Every 3 Houses)Random Digit Dialing (mobiles); Random Dial from List (Fixed-Line)Random Sampling by Voting DistricsRandom Sampling by Electoral Districs and Ran-dom Walk Method Random Digit DialingRandom Dial from List Random Sampling from List Using Fixed-Interval ProcedureRandom Dial from List

Random Dial from List

Random Dial from List Random Digit DialingRandom Sampling Using Census DataRandom Digit Dialing; Random Dial from List

Random Digit DialingRandom Sampling Using Local Council RegistersRandom Digit Dialing ( xed-line); Random Dial from List (Mobile)Random Digit Dialing; Random Dial from List

Random Digit Dialing; Random Dial from List Random Sampling Using Census DataRandom Sampling Using List Strati ed Cluster Sampling

1 Azores is included



67

GEM National Teams 2010Team Institution National Team

MembersFinancial Sponsors APS Vendor Contact

Angola

Argentina

Australia

UniversidadeCatólica de Angola(UCAN)

SociedadePortuguesa deInovação (SPI)

Center forEntrepreneurship,IAE Business School Universidad Austral

AustralianCentre forEntrepreneurshipResearch,Queensland University of Technology

SINFIC –Sistemas deInformaçãoIndustriais,S.A.

MORI Argentina

Q&A Market Research

[email protected]

[email protected]

[email protected]

Augusto MedinaDouglas ThompsonSara MedinaJoão RodriguesNuno Gonçalves

Silvia Torres Carbonell Aranzazu EchezarretaJuan Martin Rodriguez

Per DavidssonMichael StuetzerPaul SteffensMarcello Tonelli

Banco de Fomento Angola (BFA)

Center for Entrepreneurship,IAE Business School,Universidad Austral

Banco Santander Rio

Subsecretaría de DesarrolloEconómico, Ministerio deDesarrollo Económico -Gobierno de la Ciudad deBuenos Aires Queensland University of Technology

Continued

Manuel Alves da RochaSalim Abdul Valimamade




Continued

Team Institution National TeamMembers

Financial Sponsors APS Vendor Contact

Belgium


Bolivia

Brazil

Chile

Regional Teams:Arica yParinacota

Tarapacá

Antofagasta

Atacama

Coquimbo

Valparaíso

Vlerick LeuvenGent Management School

EntrepreneurshipDevelopment Centre Tuzla(in partnershipwith University of Tuzla)

Universidad Católica Boliviana/ Maestrías para el Desarrollo

IBQP - InstitutoBrasileiro daQualidade eProdutividade

Universidad del Desarrollo

Univ. de Tarapacá

CorporaciónPrivada para el Desarrollo de laUniv. Arturo Prat Univ. Católica del Norte

Agencia Regional de DesarrolloProductivoAtacamaUniv. Católica del NorteUniv. TécnicaFederico SantaMaría

Dedicated Research

PULS d.o.o.Sarajevo

CIES Internacional

BonilhaComunicaçãoe MarketingS/C Ltda.

Opina S.A.

[email protected]

of [email protected]

[email protected]

[email protected]

[email protected]

Jan LepoutreHans CrijnsMiguel Meuleman

Bahrija UmihanicRasim TulumovicSladjana SimicMirela ArifovicBoris CurkovicEsmir SpahicAdmir Nukovic

José Ernesto AmorósCarlos Poblete

Vesna Karmelic

Mauricio Vega

Gianni Romaní

Omar GonzalezRodrigo Basco

Karla Soria

Cristóbal FernándezJorge Cea ValenciaJuan Tapia

Policy Research CentreEntrepreneurship and International Entrepreneurship,Flemish Government

Federal Ministry of Development,Entrepreneurship and Crafts

Municipality of Tuzla

Ministry of Education, Science,Culture and Sports of TuzlaCanton

FAUTAPOSOBOCE S.A.CAF Embajada de DinamarcaUSAID/Proyecto Productividad yCompetitividad BoliviaUniversidad Católica BolivianaFUNDAPROAVINA-RBE

Serviço Brasileiro de Apoio àsMicro e Pequenas Empresas –SEBRAE

Serviço Nacional deAprendizagem Industrial - SENAI / PR

Serviço Social da Indústria - SESI / PRUniversidade Federal do Paraná-UFPR

InnovaChile de CORFO

Área Emprendimiento, Liderazgoy TIC´s de la Universidad deTarapacáGobierno Regional de Tarapacá

Universidad Católica del Norte,DGIP.Gobierno Regional,Agencia Regional DesarrolloProductivo.CORFO, Agencia regional deDesarrollo Productivo.

Universidad Católica del Norte,

Departamento de Industriasy Centro de Ingeniería deMercados, CIMER, de la Univ.Técnica Federico Santa MaríaEl Mercurio de Valparaíso

Marco AntonioFernández C.Gover BarjaGonzalo Chavez

Simara Maria de S.S.GrecoRomeu Herbert Friedlaender Jr.Joana Paula MachadoEliane Cordeiro deVasconcellos GarciaDuarte



69GEM National Teams 2010

Continued



ChileRegional Teams:MetropolitanaLibertadorBernardoO’HigginsMaule

Bío-Bío

Araucanía

China

Colombia

Costa Rica

Croatia

Denmark

Univ. MayorCorporación deDesarrollo ProO’HigginsUniv. Católica del MauleUniv. Católicade la SantísimaConcepciónUniv. del DesarrolloUniv. de laFrontera-INCUBATEC

TsinghuaUniversity SEM

Universidad del Norte

Ponti ciaUniversidad Javeriana CaliUniversidad de losAndes

Universidad Icesi

AsociaciónIncubadora ParqueTec (PARQUE TEC)Universidad deCosta Rica (UCR)Cámara deIndustrias de CostaRica (CICR)

J.J. StrossmayerUniversity in Osijek

University of Southern Denmark

SINOTRUST International Information& Consulting(Beijing) Co.,Ltd.

CentroNacional deConsultoría

IPSOS Central America

Puls, d.o.o.,Zagreb

Catinet

[email protected]@sem.tsinghua.edu.cn

[email protected]

[email protected]@parquetec.org

[email protected]

[email protected]

[email protected]

[email protected]

Cristina BetancourBraulio Guzmán,Aracelly Tapia

Andrés Valenzuela,Alejandro SottolichioJorge Espinoza

José Ernesto AmorósCarlos PobleteGerardo Lagos

Gao JianQin LanJiang YanfuCheng YuanLi Xibao

Liyis Gómez NúñezPiedad Martinez CarazoCésar FigueroaFernando PereiraAlberto Arias

Raúl Fernando QuirogaRafael Augusto VesgaDiana Carolina VesgaRodrigo Varela VillegasLuis Miguel Álvarez

Marcelo LebendikerFainsteinPetra PetryRafael Herrera González

Guillermo VelásquezLópez

Slavica SingerNatasa SarlijaSanja Pfeifer

Thomas Schøtt Torben BagerKim KlyverHannes OttossenKent Wickstrom JensenMajbrit Rostgaard Evald Suna Løwe NielsenMick Hancock Mette Søgaard Nielsen

Universidad MayorCorporación de Desarrollo ProO’Higgins

Universidad Católica del Maule

UCSC-Facultad de CienciasEconómicas y Adminitrativas

UDD-Facultad de Economía yNegocios.Dirección de Innovación yTransferencia Tecnológica de laUniversidad de La Frontera

SEM Tsinghua University

Universidad del Norte

Ponti cia Universidad JaverianaCali

Universidad de los Andes

Universidad Icesi

-Banco Interamericano deDesarrollo / FOMIN -GTZ / Programa DesarrolloEconómico Sostenible enCentroamérica (DESCA)-Banco Centroamericano deIntegración Económica (BCIE)-Fundación CRUSA-Asociación Incubadora Parque Tec

Ministry of Economy, Labour and EntrepreneurshipSME Policy Centre – CEPOR,ZagrebJ.J. Strossmayer University in Osijek – Faculty of Economics, Osijek

Foundation for Entrepreneurship

Juan David SolerLibreros

Suncica ObermanPeterkaDjula Borozan






Ecuador

Egypt

Finland

France

Germany

Ghana

Greece

Guatemala

Escuela SuperiorPolitécnica del Litoral (ESPOL)-ESPAE GraduateSchool of Management

The BritishUniversity in Egypt (BUE)

EgyptianJunior BusinessAssociation (EJB)

Middle East Council for Small Businesses and Entrepreneurship,(MCSBE)

Turku School of Economics,University of Turku

EMLYON BusinessSchool

Leibniz Universityof Hannoverand Federal Employment Agency(BA) – Institutefor Employment Research (IAB)

Institute of Statistical, Social and EconomicResearch,University of Ghana

Foundation forEconomic and Industrial Research(IOBE)

FranciscoMarroquínUniversity

Survey Data

AC Nielsen

Taloustutkimus Oy

CSA

Zentrum fuerEvaluationund Methoden(ZEM), Bonn

Datapower SA

Pablo Pastor

[email protected]

[email protected]

anne.kovalainen@tse.

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Virginia LasioMa. Elizabeth ArteagaGuido Caicedo

Hala HattabDavid KirbyAmr GoharMohamed Ismail Sherin El-ShorbagiLois StevensonKhaled Farouq

Anne KovalainenPekka StenholmTommi PukkinenJarna Heinonen

Olivier TorresDanielle Rousson

Rolf SternbergUdo BrixyChristian Hundt Arne Vorderwülbecke

Ernest AryeeteyGeorge OwusuPaul W. K. YanksonRobert OseiKate GoughThilde Langevang

Stavros IoannidesAggelos TsakanikasStelina Chatzichristou

Hugo Maúl Mónica de ZelayaDavid CasasolaGeorgina TunarosaLisardo BolañosIrene FloresFritz ThomasJaime Diaz

Escuela Superior Politécnica del Litoral (ESPOL)

Survey Data

Industrial Modernization Center,Ministry of Trade & Industry

Ministry of Employment and theEconomyTurku School of Economics,University of Turku

Caisse des Depots

Federal Employment Agency(BA) – Institute for Employment Research (IAB)

Danish Research Council

Foundation for Economic and Industrial Research (IOBE)

Francisco Marroquín University

Continued






Hungary

Iceland

Iran

Ireland

Israel

Italy

Jamaica

Japan

University of Pécs,Faculty of Business and Economics

George MasonUniversity

Indiana University

Reykjavik University

University of Tehran

Dublin CityUniversity

The Ira Center forBusiness,Technology &Society, BenGurion Universityof the Negev

EntER - BocconiUniversity

University of Technology,Jamaica

Keio University

Szocio-Gráf Piac-ésKözvélemény-kutatóIntézet

Capacent Gallup

Dr.Mohammad Reza Zali

IFF

TheBrandmanInstitute

Target Research

KOCI Market Research and Data MiningServices

Social SurveyResearchInformationCo.,Ltd (SSRI)

[email protected]

[email protected]

[email protected]

paula@ tzsimons-consulting.com

[email protected] [email protected]

[email protected]

[email protected]

[email protected]

László SzerbZoltán J. ÁcsAttila VargaJózsef Ulbert Gábor MárkusAttila Petheő Dietrich PéterSiri Terjesen

Abbas BazarganCaro LucasNezameddin FaghiehA .A. Moosavi-MovahediLeyla SarfarazA. Kordrnaeij Jahangir Yadollahi FarsiM.Ahamadpour DaryaniS. Mostafa RazaviMohammad Reza Zali

Paula FitzsimonsColm O’Gorman

Ehud MenipazYoash AvrahamiMiri LernerYossi Hadad Miri YeminiDov Barak Harel Yedidsion

James HaytonGiovanni Valentini

Girjanauth Boodraj Vanetta SkeeteMauvalyn BowenJoan Lawla

Takehiko Isobe

OTKA Research Foundationtheme number K 81527

George Mason University

University of Pécs, Faculty of Business and Economics

Budapest Corvinus University,Doctorol School of BusinessSzéchenyi University, Doctoral School of Regional- and Economic Sciences

Reykjavik University

Iran’ s Ministry of Labour and Social Affairs

Iran’s Labour and Social Security Institute (LSSI)

Enterprise Ireland

The Ira Center for Business,Technology & Society,Ben Gurion University of the Negev

Sami Shamoon College of Engineering

Advanced TechnologyEncouragement Centre (ATEC) inthe Negev

College of Business and Management, University of Technology, Jamaica

Venture Enterprise CenterMinistry of Economy, Trade and Industry

Continued

Rögnvaldur J.SæmundssonHannes Ottóson

Mohammad RezaSepehri

Marcia McPherson-EdwardsHorace Williams






Korea

Latvia

Macedonia

Malaysia

Mexico

Montenegro

Netherlands

Jinju National University

The TeliaSoneraInstitute at theStockholm School of Economicsin Riga

University“Ss. Cyril and Methodius” –Business Start-UpCentre

MacedonianEnterpriseDevelopment Foundation(MEDF)

University TunAbdul Razak

Tecnológico deMonterrey

University of Montenegro

EIM Business and Policy Research

Hankook Research Co.

SKDS

Brima Gallup

Rehanstat

Alduncin yAsociados

Damar DOOPodgorica

Stratus

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Sung-sik BahnSanggu SeoKyung-Mo SongDong- hwan ChoJong-hae Park Min-Seok Cha

Olga RastriginaAnders PaalzowAlf VanagsVyacheslav Dombrovsky

Radmil Polenakovik Tetjana LazarevskaLazar NedanoskiGligor MihailovskiMarija SazdevskiBojan JovanovskiTrajce VelkovskiAleksandar KurcievBojan JovanoskiIgor NikoloskiLjupka Mitrinovska

Roland XavierLeilanie Mohd NorDewi Amat SepuanMohar Yusof

Marcia CamposArturo TorresElvira Naranjo

Dragan LajovicMilorad JovovicTamara BackovicStana KalezicOlja StankovicRadmila DamjanovicMilos RaznatovicIrena PericNada RadovanicIvana ZecevicAna Sebek Stevan KaradaglicMiljan Sestovic

Jolanda HesselsChantal HartogSander WennekersAndré van Stel Roy Thurik Philipp KoellingerPeter van der ZwanIngrid Verheul Niels Bosma

Small and Medium BusinessAdministration (SMBA)Korea Aerospace Industries, Ltd.(KAI)Kumwoo Industrial Machinery, Co.Hanaro Tech Co., Ltd.Taewan Co., Ltd.

TeliaSonera AB

Macedonian EnterpriseDevelopment Foundation(MEDF)

National Centre for Development of Innovation and Entrepreneurial Learning (NCDIEL)

University Tun Abdul Razak

Tecnologico de Monterrey

Economic Faculty of Montenegro

Investment Development Fund of Montenegro

Ministry of Economy Of Montenegro

Employment Agency of Montenegro

Directorate for Development of Small and Medium-Sized Enterprises

Chamber of EconomyMontenegro

Ministry of Economic Affairs,Agriculture and Innovation

Continued






Norway

Pakistan

Palestine

Peru

Portugal

Regional Team:Azores

Romania

Russia

Bodø GraduateSchool of Business

Institute of BusinessAdministration(IBA), Karachi

The PalestineEconomic PolicyResearch Institute-MAS

Universidad ESAN

SPI Ventures

Universidade dosAçores (UAC)SPI Ventures

Babes-BolyaiUniversity, Facultyof Economics and BusinessAdministration

Saint Petersburg TeamGraduate School of Management, Saint Petersburg

Moscow TeamState University -Higher School of Economics, Moscow

TNS Gallup

OasisInternational

The PalestineCentral Bureau of Statistics(PCBS)

Imasen

GfKMetris(Metris –Métodos deRecolha eInvestigaçãoSocial, S.A.)

Metro MediaTransilvania

Levada-Center

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]@econ.ubbcluj.ro

[email protected]@hse.ru

Lars Kolvereid Erlend BullvågBjørn-Willy ÅmoTerje MathisenEirik Pedersen

Sarfraz A. MianArif I. RanaZafar A. SiddiquiShahid Raza MirShahid Qureshi

Samir AbdullahYousef Daoud Tareq SadeqMuhannad Hamed Alaa Tartir

Jaime SeridaOswaldo MoralesKeiko NakamatsuLiliana Uehara

Augusto MedinaDouglas ThompsonSara MedinaJoão RodriguesNuno Gonçalves

Matiş DumitruNagy ÁgnesGyörfy Lehel-ZoltánPete ŞtefanBenyovszki AnnamáriaPetru Tünde PetraSzerb LászlóMircea ComşaIlieş LiviuSzász LeventeMatiş Eugenia

Olga VerkhovskayaMaria DorokhinaGalina Shirokova

Alexander ChepurenkoOlga ObraztsovaTatiana AlimovaMaria GabelkoKate Murzacheva

Ministry of Trade and IndustryInnovation NorwayKunnskapsparken Bodø AS,Center for Innovation and EntrepreneurshipKunnskapsfondet Nordland AS Bodø Graduate School of Business

U.S. Agency for International Development.Centre for Entrepreneurial Development, IBA, Karachi.LUMS, LahoreBabson College, USA

Arab Fund for Economic & Social Development Palestinian National Authority(PNA)

Universidad ESAN

IAPMEI (Instituto de Apoio àsPequenas e Médias Empresas e àInovação)FLAD (Fundação Luso-Americana para oDesenvolvimento)

Governo Regional dos Açores(Secretaria Regional daEconomia)PROCONVERGENCIA

Babeş-Bolyai University, Facultyof Economics and BusinessAdministration

Graduate School of Management at Saint Petersburg StateUniversity

State University - Higher School of EconomicsMinistry of EconomicDevelopment of RussianFederation

Continued

Gualter Manuel Medeiros do CoutoJoão Crispim Borgesda PonteNélia Cavaco Branco






Saudi Arabia

Slovenia

South Africa

Spain

Regional Teams:Andalucía

AsturiasAragón

Basque Country

Canary Islands

Cantabria

The National EntrepreneurshipCenter

Alfaisal University

Institute forEntrepreneurshipand Small BusinessManagement,Faculty of Economics &Business,University of Maribor

The UCT Centrefor Innovation and Entrepreneurship,Graduate School of Business,University of CapeTown

Instituto deEmpresa

Universidad deCádizUniv. De OviedoUniv. de Zaragoza

OrkestraUniv. De DeustoUniv. BasqueCountryUniv. Mondragón

Universidad de LasPalmas de GranCanaria& Universidad deLa Laguna

Univ. De CantabriaCátedra Pyme dela Universidad deCantabria

IPSOS

RM PLUS

Nielsen SouthAfrica

InstitutoOpinòmetreS.L.

[email protected]

[email protected]

[email protected]

[email protected]

Munira A. AlghamdiHazbo SkokoNorman Wright Ricardo SantaWafa Al Debasi

Miroslav Rebernik Polona TomincKsenja Pušnik Katja Crnogaj

Mike HerringtonJacqui KewPenny Kew

Juan José GüemesIgnacio de la VegaAlicia CodurasRafael PampillónCristina CruzRachida JustoRicardo HernándezApril Win

José Ruiz Navarro

Enrique LoredoLucio Fuentelsaz

Iñaki Peña

Rosa M. Batista Canino

Fco. Javier Martínez

The Centennial Fund/National Entrepreneurship Center

Ministry of the EconomySlovenian Research AgencyFinance – Slovenian BusinessDaily

Swiss South African CooperationInitiative (SSACI)

Services SETA

Small Enterprise Development Agency (SEDA)

DGPYMES IE Business School

Junta de Andalucía

Gob. del Principado de AsturiasGob. de AragónDpto, Industria, Comercio yTurismoInstituto Aragones FomentoConsejo Aragones Cámaras deComercioEusko IkaskuntzaSPRI, Gobierno VascoDiputación Foral ÁlavaDiputación Foral BizkaiaDiputación Foral GipuzkoaFundación Emilio SoldevillaLa Caja de CanariasGobierno de Canarias,PromociónEconómica y Servicio Canariode EmpleoFondo Social EuropeoSantanderGob. Regional Cantabria.Consejería de Economía yHaciendaGrupo SordecanFundación UCEIF

Continued






SpainRegional Teams:Catalonia

Ceuta

C. Valenciana

Extremadura

Galicia

Madrid City

Murcia

Navarra

Sweden

Switzerland

DEMOSKOP

gfs Bern

[email protected]

[email protected]

Carlos GuallarteYancy Vaillant

Lázaro RodríguezMª del Mar FuentesJosé Mª Gómez Gras

Ricardo HernándezJuan Carlos Díaz

Araceli de Lucas

Iñaki Ortega

Antonio AragónAlicia Rubio

Cristina García

Pontus BraunerhjelmUlrika Stuart HamiltonMikael SamuelssonKristina NyströmPer Thulin

Rico J. BaldeggerAndreas A. Brülhart Mathias J. RossiPatrick E. Schüffel Thomas StraubSabine Frischknecht Muriel BergerVerena Huber

Diputació de Barcelona: Àreade Desenvolupament EconòmicGeneralitat de Catalunya:Departament de Treball PROCESA

Air NostrumIMPIVAJunta Extremadura, Univ.De Extremadura, Central Nuclear Almaraz, So ex,Arram Consultores, CCOOU.R Extremadura, UrvicasaCaja Rural de Extremadura,Palicrisa Fundación AcademicaEuropea de Yuste. Fomento deEmprendedores, Grupo AlfonsoGallardo, Infostock EuropaExtremadura, Cámara ComercioCáceres. UGT Extremadura, El Periódico Extremadura, HoyDiario de Extremadura, FomentoEmprendedores, Infocenter,Ogesa, Hotel Huerta HondaConfederación EmpresariosGalicia (CEG)CEEI Galicia SA (BIC Galicia)Universidad de Santiago deCompostela

Caja Madrid Ayuntamiento de Madrid Fundación Caja MurciaConsejería de Economía,Empresa e InnovaciónInstituto Fomento región deMurciaCentro Europeo de Empresas einnovación de MurciaUniv. MurciaGobierno de Navarra, ServicioNavarro de Empleo

VinnovaCECIS Confederation of SwedishEnterprise

KTI /CTI (Conferderation’sInnovation Promotion Agency)

School of Business Administration(HEG-FR) Fribourg

Universidad Autónoma deBarcelona

Universidad deGranadaUniv. Miguel HernándezFundación Xavierde SalasUniv. DeExtremadura

Confederación deEmpresarios deGalicia (CEG)CEEI Galicia, SA(BIC Galicia)Universidad de Santiago deCompostelaIEBS

Univ. de Murcia

Centro Europeode Empresas eInnovación deNavarraServicio Navarrode Empleo.

SwedishEntrepreneurshipForum

School of BusinessAdministration(HEG-FR)Fribourg

Continued






Taiwan

Trinidad and Tobago

Tunisia

Turkey

Uganda

United Kingdom

United States

National ChengchiUniversity

China Youth CareerDevelopment AssociationHeadquarters(CYCDA)

Arthur Lok Jack Graduate School of Business,University of theWest Indies

Institut desHautes EtudesCommerciales -Sousse

Yeditepe University

MakerereUniversity BusinessSchool (MUBS)

Aston University

Babson College

NCCU SurveyCenter

Optima

Akademetre

MakerereUniversityBusinessSchool

IFF ResearchLtd.

OpinionSearch Inc.

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

[email protected]

Chao-Tung WenChang-Yung LiuSu-Lee TsaiYu-Ting ChengYi-Wen ChenRu-Mei HsiehChung-Min LoLi-hua ChenShih-Feng Chou

Karen Murdock Miguel CarilloColin McDonald

Faysal MansouriLot Belkacem

Esra Karadeniz

Rebecca NamatovuWarren ByabashaijaArthur SserwangaSarah KyejjusaWasswa BalunywaPeter Rosa

Julio DeCastroI. Elaine AllenAbdul AliCandida BrushWilliam D. BygraveMarcia ColeLisa Di CarloJulian LangeMoriah MeyskensJohn WhitmanEdward Rogoff Monica DeanThomas S. LyonsJoseph OnochieIvory PhiniseeAl Suhu

Small and Medium EnterpriseAdministration, Ministry of Economic Affairs

Arthur Lok Jack GraduateSchool of Business, University of the West Indies

GTZ – Programme d’Appuià l’Entrepreneuriat et àl’Innovation

Union of Chambers and Commodity Exchanges of Turkey(TOBB)


Makerere University BusinessSchool

Department for Business,Innovation and Skills (BIS)ONE North East Welsh Assembly Government Enterprise UK PRIME Birmingham City Council Aston Business School Hunter Centre forEntrepreneurship, University of Strathclyde

Babson College

Baruch College

Continued

Mark Hart Jonathan LevieMichael Anyadike-DanesYasser Ahmad BhattiAloña MartiarenaArrizabalagaMohammed KarimLiz Blackford Erkko AutioAlpheus Tlhomole



77 GEM National Teams 2010



Uruguay

Vanuatu

Zambia

GEM Global CoordinationTeam

University of Montevideo

UNITEC

University of Zambia

EquiposMori

UNITEC New Zealand

Department of Development Studies,University of Zambia

[email protected]

[email protected]@unitec.ac.nz

[email protected]

[email protected]

Leonardo VeigaAdrián EdelmanPablo Regent Fernando BorrazAlvaro CristianiCecilia Gomeza

Robert DavisMalama SolomonaAsoka GunaratneJudith KingAndrina Thomas-Lini

Francis ChiguntaValentine MwanzaMoonga MumbaMulenga Nkula

Kristie Seawright Mick Hancock Yana LitovskyChris Aylett Jackline OdochMarcia ColeJeff SeamanNiels BosmaAlicia Coduras

University of MontevideoBanco Santander Uruguay

AusAIDUNITEC New Zealand





About the AuthorsDonna J. Kelley

Donna Kelley is an associate pro essor o entrepreneurship at Babson College, and holds the Frederic C.Hamilton chair o ree enterprise. She received her Ph.D. in management rom Rensselaer Polytechnic Insti-tute. Her research has been published in the Journal o Business Venturing, Entrepreneurship: Teory andPractice, Journal o Product Innovation Management, Human Resource Management and others. Donna’searly career involved work as a chemist and her entrepreneurship experience includes ounding a health tnessbusiness and joining the management team o a computer hardware start-up. She was also a ounding teammember, and a ounding board member, o a Chinese immersion public charter school. She is a board membero the Global Entrepreneurship Research Association.

Niels Bosma

Niels Bosma is a member o the Urban and Regional Research Center Utrecht, section o economicgeography, Utrecht University. He has been involved in the GEM project since 2001 and is research director

or GERA, the umbrella organization that hosts the GEM project. He has a Ph.D. in economic geography rom Utrecht University and an MSc in econometrics rom the University o Groningen. He has published

several articles in entrepreneurship and economic geography journals. His new GEM-based book entitledTe Geography o Entrepreneurial Activity and Regional Development; A Multilevel Perspective Applied toEuropean Regions will be orthcoming in 2011.

José Ernesto Amorós

José Ernesto Amorós is the associate dean o research and director o the Global Entrepreneurship Re-search Center at Economics and Business School, Universidad del Desarrollo, Santiago, Chile. He is the co-ordinator and main researcher o Chile’s GEM project and member o the GEM Board and GEM´s researchcommittee. He holds a Ph.D. in management sciences rom ESADE Business School, Spain and was a WorldBank-CONICY postdoctoral research ellow at the Universidad Adol o Ibáñez, Chile. He has a bachelor’sdegree in business administration and MSc in marketing rom Monterrey’s Institute o echnology, Mexico.His research was published in international journals, book chapters and several monograph and reports inSpanish and English.



79

GEM Sponsors

GERA and GEM

Te Global Entrepreneurship Research Association (GERA) is, or constitutional and regulatory purposes,the umbrella organization that hosts the GEM project. GERA is an association ormed o Babson College, Lon-don Business School and representatives o the Association o GEM national teams.

Te GEM program is a major initiative aimed at describing and analyzing entrepreneurial processes withina wide range o countries. Te program has three main objectives:

• o measure di erences in the level o entrepreneurial activity between countries• o uncover actors leading to appropriate levels o entrepreneurship• o suggest policies that may enhance the national level o entrepreneurial activity.

New developments, and all global, national and special topic reports, can be ound atwww.gemconsortium.org.

Babson College

Babson College in Wellesley, Massachusetts, USA, is recognized internationally as a leader in entre-preneurial management education. Babson College is the Leading Sponsoring Institution and a FoundingInstitution. Babson grants B.S. degrees through its innovative undergraduate program, and grants M.B.A.and custom M.S. and M.B.A. degrees through the F. W. Olin Graduate School o Business at Babson College.Babson Executive Education o ers executive development programs to experienced managers worldwide.For in ormation, visit www.babson.edu.

Universidad del Desarrollo

he Universidad Del Desarrollo (UDD) Educational project was driven by outstanding leaders o the Chilean public and business scene, and is today one o the top three prestigious private universi-ties in Chile. Success came quickly; a ter just 20 years, its rapid growth has become an expression o theUniversity’s main acet: entrepreneurship. he UDD M.B.A program is rated one o the best in LatinAmerica and also the best one in entrepreneurship education, according to América Economía magazine,an achievement that once again represents the “entrepreneurial” seal that is embedded in the spirit o theUniversity. For more in ormation visit www.udd.cl.




Contacts

For more in ormation on this report, contact Donna J. Kelley at [email protected]; Niels Bosma at [email protected]; or José Ernesto Amorós at [email protected].

o download copies o the GEM Global Report(s), GEM National eam Reports and to access select datasets, please visit the GEM Website at www.gemconsortium.org.

Nations not currently represented in the GEM Consortium may express interest in joining and request ad-ditional in ormation by e-mailing the Executive Director, Kristie Seawright at [email protected].



81

Notes and References

i Tese percentages are based on IMF´s World Economic Outlook Database, October 2010 and USA Bu-reau o Census.

ii Schwab, Klaus, ed. Te Global Competitiveness Report 2010–2011. Geneva: World Economic Forum, 2010.

iii Te World Bank. Doing Business 2010. Washington, D.C.: Te International Bank or Reconstruction andDevelopment/Te World Bank, 2010.

iv Porter, M.E., J.J. Sachs and J. McArthur. “Executive Summary: Competitiveness and Stages o Economic

Development.” In Te Global Competitiveness Report 2001–2002, edited by M.E. Porter, J.J. Sachs, P.K. Corne-lius, J.W. McArthur and K. Schwab, 16–25. New York, NY: Ox ord University Press, 2002.

v Gries, . and W. Naude. (2010). “Entrepreneurship and Structural Economic rans ormation,” In SmallBusiness Economics, 34(1): 13–29.

vi Henrekson, M. (2005). “Entrepreneurship: A weak link in the wel are state”. In Industrial and CorporateChange, 14(3): 437–467.

vii For more in ormation on associations between employment protection and entrepreneurship activity seeBosma, N. and J. Levie. Global Entrepreneurship Monitor, 2009 Executive Report. (2010), Babson Park, MA,U.S.: Babson College; Santiago, Chile: Universidad del Desarrollo; Reykjavík, Iceland: Háskólinn ReykjavíkUniversity; and London, U.K.: Global Entrepreneurship Research Association.

viii More detail is available on www.gemconsortium.org.

ix Most new businesses do not survive beyond three or our years. Tis is the main rationale or the choiceo 42 months as the cut-o period. However, the choice o 42 months also refects operational issues. Accord-ing to Reynolds et al., “Te relevant interview question asked only the year when salary and wage paymentswere initiated and most surveys occurred in the summer months; so the alternatives or choosing a “new rmage” were 1.5 years, 2.5 years, 3.5 years, etc. Te shortest time rame that would provide enough cases or stableprevalence rates with a total sample o 2,000 seemed to occur at 3.5 years. Conceptually, any time period under




ve years seemed satis actory so this age was considered an appropriate trade-o between conceptual andoperational considerations in the early years o the project. Tere has been no compelling reason to adjust thiscriteria and a desire or a stable time series has led to its continued use. It should be considered a procedure tocapture existing rms less than three or our years old.” (Reynolds P., Bosma, N., Autio, E., Hunt, S., De Bono,

N., Servais, I., Lopez-Garcia, P. andChin, N. (2005). “‘Global entrepreneurship monitor: data collection designand implementation 1998-2003”’. Small Business Economics, 24, 205-31.).

x “Statistical signi cance” re ers to a calculation o where the range within which the average value o 95 outo 100 replications o the survey would be expected to lie. Tis range showed in Figure 4 by vertical bars oneither side o each data point. I the ‘con dence intervals’ (denoted by the vertical bars) o two national EArates do not overlap, the di erence between the EA rates is not statistically signi cant at the 0.05 level. Re er-ence in this report to signi cant di erences implies statistically signi cant di erence at the 0.05 level.

xi Doing Business 2011: Making a Di erence or Entrepreneurs. Washington, D.C.: Te International Bankor Reconstruction and Development/Te World Bank.

xii See Kau mann, D., A. Kraay, and M. Mastruzzi (2008). “Governance Matters VII: Aggregate and IndividualGovernance Indicators, 1996–2007”. WB Policy Research Working Paper 4654. Washington, DC: World Bank.

xiii In order to get su cient precision we required a minimum number o identi ed early-stage entrepre-neurs o 250 in the 2008–2010 sample.

xiv See Birch, D. Te Job Creation in America. New York: Te Free Press, 1987.

xv For more in ormation see Acs, Z.J. (2008). “Foundations o High Impact Entrepreneurship,” In Founda-tions and rends® in Entrepreneurship, 4(6), 535–620; and, Autio, E. (2007). Global Entrepreneurship Monitor2007 Global Report on High-Growth Entrepreneurship. London, U.K: London Business School; and BabsonPark, MA: Babson College.

xvi For example: Baum, R., Locke, E., and Smith, K. (2001) “Multidimensional Model o Venture Growth.” InTe Academy o Management Journal, 44(2): 292–303. Wicklund, J. and Shepherd, D. (2003). “Aspiring or, andAchieving Growth: Te Moderating Role o Resources and Opportunities”. Journal o Management Studies40(8):1919–1941.

xvii Schumpeter, J.A. Te Teory o Economic Development. Cambridge, MA: Harvard University Press, 1934.

xviii Baumol, W.J. Entrepreneurship, Management, and the Structure o Payo s. Cambridge, MA: MI Press., 1993.

xix Drucker, P. Innovation and Entrepreneurship: Practice and Principles. New York: Harper & Row, 1985.

xx Te questionnaire was set-up by Erkko Autio and Jonathan Levie. During 1999–2007 the survey wasurther developed by Erkko Autio. Te expert surveys are now annually conducted by all national teams under

the guidance o Alicia Coduras and the GEM co-ordination team. Te annual questionnaire has undergone

very minor changes in recent years.xxi eams select experts on the basis o reputation and experience, but also practical convenience. However,

they ollow a strict protocol. At least our experts with speci c knowledgeable in each o the nine EFCs makeup the total o 36 key in ormants. Te respondents in each category consist o at least: one entrepreneur, twosuppliers o the EFC and one observer, such as an academic with speci c expertise in the area. Te teamscontact experts with a detailed explanation o the GEM project, and virtually all agree to participate. Tey complete the questionnaire and participate in interviews allowing or an open discussion o their views onnational contributions (strengths) and limitations (weaknesses) as a context or entrepreneurship. Addition-



83Notes and References

ally, they identi y speci c actors that can enhance the level o entrepreneurship in their country. Each actoris measured with multiple-item scales comprising three to seven questions. Te standard NES survey has 88questions with responses collected on a ve-point Likert scale (where ‘‘1 = completely true’’ and ‘‘5 = com-pletely alse’’).

xxii Empirical studies have shown that government policy, entrepreneurship education and entry regula-tion should each be subdivided into two components. See p. 248 in: Levie, J. and Autio, E. (2008). A theoreticalgrounding and test o the GEM model. Small Business Economics, 31(3), 235-263.

xxiii Baumol, W.J. (1990). “Entrepreneurship: Productive, Unproductive and Destructive.” Journal o PoliticalEconomy, 98, 893–919.

xxiv Bosma, N., Stam, E. and Wennekers, S. (2010). Intrapreneurship—An International Study. EIM SCALESResearch Report H201005. Zoetermeer, Netherlands: EIM.

xxv Te time series have been smoothed, giving the results in the year o re erence a weight o 50% and theresults in (t-1) and (t+1) a weight o 25%. For the year 2009 there was no data available.

xxvi See also Koellinger P. and R. Turik (2009). “Entrepreneurship and the Business Cycle,” inbergen In-stitute Discussion Paper, I 2009-032/3, Erasmus School o Economics, Erasmus University Rotterdam: EIMBusiness and Policy Research; Zoetermeer, Te Netherlands: inbergen Institute.

xxvii We required a minimum sample size o 3,500 (e ectively meaning that countries should have partici-pated at least twice in each time rame) and a minimum number o identi ed early-stage entrepreneurs o 200. All actor-driven economies that are now part o the GEM study were not included in the rst and/or thesecond time rame.

xxviii Tese numbers are based on unweighted country averages, or the countries or which in ormation wasavailable or both 2009 and 2010.

xxix See also Bosma, N. and J. Levie (2010), Global Entrepreneurship Monitor, 2009 Executive Report’ Bab-son Park, MA, U.S.: Babson College; Santiago, Chile: Universidad del Desarrollo; Reykjavík, Iceland: HáskólinnReykjavík University; and London, U.K.: Global Entrepreneurship Research Association.



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