hunter centre for entrepreneurship @ strathclyde

Global Entrepreneurship MonitorScotland 2002

Jonathan LevieWendy Brown

Laura Galloway

Global Entrepreneurship Monitor

RESEARCH QUESTIONS

• How does the level of entrepreneurial activity vary between countries?

• Does the level of entrepreneurial activity affect economic growth?

• What makes a country entrepreneurial?• What policies might enhance

entrepreneurial activity?

GEM Scotland 2002

AIMS • Measure differences in

entrepreneurial activity between 37 participating GEM sovereign nations & Scotland

• Identify factors that account for Scotland's level of entrepreneurial activity

• Suggest implications for public policy

GEM2002 Methodology

• Standardised Cross-national Data: 37 nations 62% of world population92% of world GDP

• Representative Sample: >2000 adults per nation

• Key Informant Sample: > 30 experts interviewed per nation

Measuring Entrepreneurial Activity [TEA]

% of adults actively starting a business (nascent entrepreneurship rate)

+ % of adults running a new business

(owner/managers of businesses < 3½ yrs old)

=

Total Entrepreneurial Activity

(TEA)

Scottish TEA rate : 4.6%

GEM 37 nation average TEA rate : 12%

•Scottish Female TEA rate now same as UK Female TEA rate

•Scottish Male and Female TEA rates are not significantly different

•Young male TEA rates have declined

•Opportunity perception rate among young male Scots has increased

Summary Highlights

• Low rates of informal investment for the 3rd year running

• High potential entrepreneurship rate is low because overall entrepreneurship rate is low (the issue is quantity not just quality)

• Non-white immigrants are more entrepreneurial than other groups

• Scotland & Ireland Demographic and policy differences account for gap in entrepreneurship rates

Summary Highlights contd.

How Scotland Compares

-

5.00

10.00

15.00

20.00

25.00Ja

pan

Rus

sia

Bel

gium

Fran

ceHon

g Kon

gCro

atia

Swed

en

Chi

nese

Tai

pei

Pol

and

SCOTL

AND

Finl

and

Net

herlan

dsSl

oven

iaSp

ain

Ger

man

y

Uni

ted

Kin

gdom

Ital

ySi

ngap

ore

Den

mar

kSo

uth

Afr

ica

Hun

gary

Isra

elSw

itze

rlan

dAus

tral

iaNor

way

Can

ada

Irel

and

U.S

.A.

Icel

and

Chi

naM

exic

oBra

zil

New

Zea

land

Arg

entina

Kor

ea

Chi

leIn

dia

Thai

land

Tota

l Sam

ple

Cou

ntry

ave

rage

TE

A S

core

(%

of

adu

lts

18-

64)

[9

5%

Co

nfi

de

nc

e In

terv

al]

TEA scores for 37 sovereign nations & Scotland

FinlandDenmark Israel

Norway

Ireland

NewZealand

United KingdomScotland

High Potential Entrepreneurship

0

0.5

1

1.5

Scotland UK Smallmodernnation

average

37 nationaverage

% o

f hig

h po

tent

ial e

ntre

pren

eurs

in s

ampl

e

0

5

10

15

20

Scotland UK Smallmodernnation

average

37 nationaverage

% o

f ent

repr

eneu

rs

with

hig

h po

tent

ial

Percentage of individuals insample who exhibited HighPotential Entrepreneurship

Percentage of entrepreneurs in sample who exhibited HighPotential Entrepreneurship

High Potential Entrepreneurship in Scotlandis more an issue of quantity than quality

Immigrant/Ethnic Entrepreneurship

UK GEM sample (aged 18-64 only) by origin and ethnic background

Non-white immigrants have significantlyhigher entrepreneurial activity

% in sample

TEA score

% contribution

White UK-born 90 5 84

Non-white UK-born 2 6 2

White immigrants to UK 5 7 6

Non-white immigrants to UK 3 12 8

Immigrant/Ethnic Entrepreneurship

Scottish GEM sample (aged 18-64 only)

Immigrants to Scotland have significantlyhigher entrepreneurial activity

% in sample

TEA score

% contribution

White Scots 83 4 68

Non-white Scots 0 - -

White UK-born, not Scots 12 8 23

Non-white UK-born, not Scots 0 - -

White immigrants to UK 3 5 3

Non-white immigrants to UK 1 22 6

Scotland and Ireland compared

A dynamic and youthful population has a positive effect on entrepreneurial activity

Ireland

Hong Kong

SingaporeIsrael

Scotland

0

5

10

15

20

-0.04 -0.02 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16

% Population growth 1996-2002

2002

TE

A s

core

, %Six-year population growth rates and

TEA rates of 36 GEM2002 nations

Policy & Programmes Review

“A New Approach to Entrepreneurship”Scottish Enterprise, January

Encouraging Innovative,

High-Growth Starts

Encouraging More People

to Start Businesses

Increasing the Contribution of

Education to Entrepreneurship

SMART, SUCCESSFUL SCOTLAND 

“GENERATING ENTREPRENEURIAL DYNAMISM”

“Going For Growth”Jack McConnell’s October speech

•Encourage ‘growth of enterprise’ as well as enterprise growth

- Education for enterprise focus correct

- More quantity and quality support needed

Policy Implications

•Develop research-based policies that encourage informal (friends and family) investment

•Develop research-based policies that encourage entrepreneurial immigrants