hunter centre for entrepreneurship strathclyde Global Entrepreneurship

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hunter centre for entrepreneurship @ strathclyde Global Entrepreneurship Monitor Scotland 2002 Jonathan Levie Wendy 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

GEM 2002 Methodology • Standardised Cross-national Data: 37 nations 62% of world population 92% 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)

Summary Highlights 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 contd. • Low rates of informal investment for the 3 rd 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

s itz Sw Is ra el er la nd Au st ra lia No rw ay Ca na da Ire la nd U. S. A. Ic el an d Ch in a M ex ic o Br Ne az il w Ze al an Ar d ge nt in a Ko re a Ch ile In di a Th ai la nd ar y a k ric ng Hu h Af ut e ar nm Scotland De 5. 00 So or ly Ita ap ng Si Norway Denmark Israel Finland Ireland - TEA scores for 37 sovereign nations & Scotland T Co ota un l Sa try m a ple ve ra ge Un Sp ai n Ge rm ite an d y Ki ng do m a en i ov 10. 00 Sl nd la d ND an nl er th Ne LA Fi nd ei ip la Po OT SC g tia en ed Ta e Sw es in Ch m ce on oa Cr K ng Ho iu an Fr lg Be ia n pa ss Ja Ru TEA Score (% of adults 18 -64) [95% Confidence Interval] How Scotland Compares 25. 00 20. 00 15. 00 New Zealand United Kingdom

High Potential Entrepreneurship Percentage of entrepreneurs in sample who exhibited High Potential Entrepreneurship Percentage of individuals in sample who exhibited High Potential Entrepreneurship in Scotland is more an issue of quantity than quality

Immigrant/Ethnic Entrepreneurship UK GEM sample (aged 18 -64 only) by origin and ethnic background % in sample White UK-born TEA score % contribution 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 Non-white immigrants have significantly higher entrepreneurial activity

Immigrant/Ethnic Entrepreneurship Scottish GEM sample (aged 18 -64 only) % in sample White Scots TEA score % contribution 83 4 68 0 - - 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 Non-white Scots White UK-born, not Scots Immigrants to Scotland have significantly higher entrepreneurial activity

Scotland Ireland compared Six-year population growth rates and TEA rates of 36 GEM 2002 nations A dynamic and youthful population has a positive effect on entrepreneurial activity

Policy & Programmes Review “Going For Growth” Jack Mc. Connell’s October speech “A New Approach to Entrepreneurship” Scottish Enterprise, January SMART, SUCCESSFUL SCOTLAND “GENERATING ENTREPRENEURIAL DYNAMISM” Encouraging Innovative, High -Growth Starts Encouraging More People to Start Businesses Increasing the Contribution of Education to Entrepreneurship

Policy Implications • Encourage ‘growth of enterprise’ as well as enterprise growth - Education for enterprise focus correct - More quantity and quality support needed • Develop research-based policies that encourage informal (friends and family) investment • Develop research-based policies that encourage entrepreneurial immigrants

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