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GEM Scotland Report 07/08 Launch

Professor Sara Carter OBE

Head of Department

Hunter Centre for Entrepreneurship

University of Strathclyde Business School

23 September 2009

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Hunter Centre for Entrepreneurship

Mission

To provide excellent teaching that motivates and equips students to engage in entrepreneurial behaviours and to be influential in the development of best practices in entrepreneurship education

To produce research of high academic quality that is influential and relevant to policy and practice

To engage in useful knowledge exchange with enterprises whereby best practices can be both shared with and informed by industry partners

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p Global Entrepreneurship Monitor Scotland 2007/08

Jonathan LevieHunter Centre for Entrepreneurship

University of Strathclyde

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p Total Early-stage Entrepreneurial Activity (TEA):How Scotland Compared in 2008

0%

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etw

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18-

64 y

ears

Scotland

United Kingdom

Ireland

United States

Factor-driveneconomies

Efficiency-driveneconomies

Innovation-driveneconomies

Source: GEM 2008 adult population surveys

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TEA%

change

Scottish TEA as a % of other TEA rates

2007 2008 2007 2008

Scotland 4.6 4.4 -4% n/a n/a

UK 5.5 5.6 +2% 84% 79%

High income/innovation-driven nations 6.2 6.7 +9% 74% 66%Arc of Prosperity nations 7.9 7.6 -3% 58% 58%

TEA rates in Scotland & benchmark countries

Source: GEM 2007 and 2008 adult population surveys

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“I know someone who has started a business in the last two years”

2002 2003 2004 2005 2006 2007 20080

10

20

30

40

50

60

Scot UK AOP

% o

f n

on

-en

tre

pre

ne

uri

all

y-a

cti

ve

p

eo

ple

ag

ed

18

-64

wh

o a

gre

ed

Source: GEM 2002 to 2008 adult population surveys

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p “There are good opportunities for starting a

business in my local area in the next 6 months”

2002 2003 2004 2005 2006 2007 20080

10

20

30

40

50

60

Scot UK AOP%

of

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ep

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ria

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pe

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d

Source: GEM 2002 to 2008 adult population surveys

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p Scottish Male and Female TEA rates

2002 – 2008

0%

2%

4%

6%

8%

10%

2002 2003 2004 2005 2006 2007 2008

males females

Source: GEM 2002 to 2008 adult population surveys

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Informal Investment rate in Scotland, UK and Arc of Prosperity nations, 2002-2008

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2002 2003 2004 2005 2006 2007 2008

Scotland UK AOP nations

(% of respondents aged 18064 who invested in someone else’s new business in the last three years)

Source: GEM 2002 to 2008 adult population surveys

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p Distribution of early-stage entrepreneurs and established business owner-managers in Scotland and the UK, by business location

Early-stage Established

Scotland UK Scotland UK

% Home based 58 58 60 59

% Separate premises 36 33 35 35

% Mobile service 6 9 5 7

Total 100 100 100 100

No. entrepreneurs in sample 153 3039 167 3232

Source: GEM UK 2007 and 2008 adult population survey

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TEA rate and EBO rate estimates for Scottish local authorities, by quintiles, 2003-2008

SC lads: tearate by quintile

tearate

0 to 3.253.25 to 4.274.27 to 5.005.00 to 5.605.60 to 8.40

SC lads: ebo rate by quintile

eborate

0 to 3.103.10 to 4.254.25 to 5.605.60 to 7.007.00 to 10.40

Source: GEM UK 2003 to 2008 adult population surveys

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p Gain in intention and activity from business or

enterprise training, by source of training

    SchoolCollege or university

Work placement Gov. agency

    Scot UK Scot UK Scot UK Scot UK

Intend to start a business in three years time (non-

entrepreneurs only)

No training4.5% 6.1% 3.6% 5.7% 3.8% 5.1% 4.5% 6.3%

Compulsory training

5.3% 9.7% 14.6% 11.8% 7.8% 7.7% 3.8% 10.3%

Gain from training (times)

1.2 1.6 4.1 2.1 2.1 1.5 0.8 1.6

Corrected gain

0.6 1.0 2.2 1.7 1.2 1.4 1.1 1.6

TEA rate

No training4.8% 6.5% 3.5% 5.7% 4.4% 6.7% 4.1% 5.9%

Compulsory training

3.1% 7.2% 9.2% 8.0% 3.5% 5.3% 7.9% 5.7%

Gain from training (times)

0.6 1.1 2.7 1.4 0.8 0.8 2.0 1.0

Corrected gain

0.6 1.0 2.6 1.4 0.7 0.8 1.8 1.2

Source: GEM UK 2006 and 2007 adult population surveys

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Scotland UK Denmark Ireland Iceland Finland

Expect to start a business in the

next 3 years (non-

entrepreneurs only)

No training 2.5% 3.8% 4.3% 4.3% 8.6% 2.4%

Compulsory training 8.6% 11.3% 8.3% 13.3% 14.7% 7.2%

Gain from training (times) 3.43 2.97 1.94 3.08 1.71 2.95

TEA rate

No training 3.7% 4.2% 4.2% 5.5% 7.4% 4.4%

Compulsory training 7.4% 10.4% 4.9% 9.1% 16.4% 6.3%

Gain from training (times) 2.01 2.49 1.2 1.7 2.2 1.4

Gain in intention and activity from training in starting a business, by source of training

Source: GEM UK 2008 adult population survey

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Some Implications for Policy

Home-based business the Model Revised Scottish Secure Tenancy

Agreement states: “You and anyone living with you must not run any kind of business from the house. However, if you ask us, we may give permission... If we give permission, we may also increase your rent.”

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Some Implications for Policy

Entrepreneurship training E-ship training can double the rate of

startup of graduates from further and higher education, even if it isn’t voluntary

Should we make this an integral part of courses at third level?

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p “Fear of failure would prevent me starting a business”

(among those who see opportunities)

2002 2003 2004 2005 2006 2007 20080

5

10

15

20

25

30

35

40

45

Scot UK AOP%

of

no

n-e

ntr

epre

neu

rial

ly a

ctiv

e p

eop

le a

ged

18-

64 w

ho

ag

reed

Source: GEM 2002 to 2008 adult population surveys

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p “I have the knowledge, skills and

experience needed to start a business”

2002 2003 2004 2005 2006 2007 20080

5

10

15

20

25

30

35

40

45

50Scot UK AOP

% o

f n

on

en

trep

ren

euri

ally

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ive

peo

ple

ag

ed 1

8-64

wh

o a

gre

ed

Source: GEM 2002 to 2008 adult population surveys

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p TEA rates for Scotland and the UK, 2002 to 2008, showing 95% confidence intervals and sample sizes

0%

1%

2%

3%

4%

5%

6%

7%

8%

UK 2002

(11902)

UK 2003

(18315)

UK 2004

(17583)

UK 2005

(24513)

UK 2006

(30643)

UK 2007

(34818)

UK 2008

(21995)