WELLESLEY, Mass., Feb. 5, 2016 /PRNewswire-USNewswire/ -- Sixty-six
percent of adults see entrepreneurship as a good career
choice, and more than half of the working-age population feel they
have the ability to start a business – this according to the Global
Entrepreneurship Monitor (GEM) 2015 Global Report
(pdf) released with sponsors Babson
College, Universidad Del Desarrollo, Universiti Tun Abdul
Razak, and Tecnológico de Monterrey.
In its 17th consecutive year, the report
continues to serve as the largest single study of its kind.
According to the Global Entrepreneurship Monitor (GEM) 2015
Global Report:
The majority of entrepreneurs worldwide are fueled by
opportunity rather than necessity. They make up 78 percent of those
in innovation-driven economies, and 69 percent in factor and
efficiency-driven economies.
"It is often a misperception that most entrepreneurs in
less-developed economies are necessity-motivated," said
Babson College Professor and report
lead author Donna Kelley. "The reality is that entrepreneurial
opportunities of all types exist in every part of the world, and
there are ambitious entrepreneurs everywhere with the aspirations
to pursue them."
Seventy percent of adults hold entrepreneurs to a 'high status'
in their respective societies. Twenty-one percent of adults across
60 economies intend to start a business in the next three
years.
The proportion of entrepreneurs with medium to high job creation
expectations are similar across all development levels, with about
one in five entrepreneurs stating that they will employ six or more
people. Entrepreneurs in the United
States show higher levels on this measure, with 32 percent
projecting this employment potential.
Across all economies, the highest entrepreneurship participation
rates are found among 25-35 and 35-44 year-olds – people in their
early and mid-careers.
Nearly half or more of the entrepreneurs in the factor and
efficiency-driven economies operate wholesale or retail businesses,
while nearly half of the entrepreneurs in the innovation-driven
group started businesses in information and communications, and
financial, professional, health, education, and other services
industries.
"Understanding what inhibits and what enhances entrepreneurship
has never been more important, as many economies are struggling -
especially those in developing countries, and unemployment is
increasing," said GEM Executive Director and report
author Mike Herrington. "The Global Entrepreneurship Monitor
allows us to gain additional perspective on entrepreneurial
activity, and to look at best practices that are helping to promote
small and medium enterprise development."
Factor-driven economies show the highest rate of average female
total early-stage entrepreneurial activity (TEA) at 20 percent.
These economies also demonstrate the highest rate relative to men,
which translates to just about nine women entrepreneurs for every
10 men entrepreneurs.
"The entrepreneurial capacity of an economy depends on the
co-existence of different types of entrepreneurial behavior, which
helps provide a transition from unemployed to self-employed, and
then from self-employed, to striving to create jobs, innovate, and
operate globally," said J.J. Strossmayer University of Osijek
Professor and report author Slavica Singer. "With the Global
Entrepreneurship Monitor, we seek to spread this awareness to the
entrepreneurial policy makers and regulators who can contribute to
the design of more supportive entrepreneurship ecosystems
worldwide."
About the Report
The 2015 Global Entrepreneurship Monitor (GEM) Global Report,
unveiled today at the GEM Annual Meeting in Boston, Massachusetts, USA, represents the
17th year GEM has tracked rates of entrepreneurship
worldwide. The report surveyed entrepreneurs across multiple
phases, and assessed their characteristics, motivations, and
ambitions, as well as the attitudes societies have toward such
activity. It covers results based on 60 economies that completed
the Adult Population Survey (APS), and 62 economies that completed
the National Expert Survey (NES). The aim of this report is to
inform academics, educators, policy-makers, and practitioners about
the multi-dimensional nature of entrepreneurship around the world,
advancing knowledge and guiding decisions that can lead to the
conditions that allow entrepreneurship to thrive.
The 2015 GEM Global Report is authored by Babson College Professor and Frederic C. Hamilton
Chair of Free Enterprise, Donna
Kelley; J.J. Strossmayer University of Osijek Professor and
UNESCO Chair in Entrepreneurship, Slavica
Singer; and University of Cape Town Professor and Global
Entrepreneurship Monitor Executive Director, Mike Herrington.
Key Findings
Societal Values about Entrepreneurship
- In factor and efficiency-driven economies, two-thirds of
adults, on average, think entrepreneurship is a good career choice.
- In innovation-driven economies, 53 percent have this same
belief.
- Across 60 economies, 68 percent of working-age adults, on
average, perceive high status for entrepreneurs in their
societies.
- Three countries from the Asian economies (Kazakhstan, Philippines, and Indonesia) exhibit the highest levels on all
three indicators.
Self-Perceptions about Entrepreneurship
- 42 percent of working-age adults see good opportunities around
them for starting a business.
- Only one-third of those who see opportunities feel constrained
due to fear of failure.
- More than half of the working-age population, on average, feel
they have the ability to start a business.
- High levels on these indicators can be seen in Africa (Senegal, Burkina,
Faso, and Botswana) and
Barbados, where over half of the
adults in these countries see opportunities.
- Less than one-fifth of those seeing opportunities in these
countries feel constrained by fear of failure, and
- Close to three-fourths or more believe they have the
capabilities to start.
- 21 percent of people across 60 economies, on average,
intend to start a business in the next three years.
Phases and Types of Entrepreneurial Activity
- Average TEA rates tend to be highest in the factor-driven
economies, decreasing with higher levels of economic development
(21 percent in factor-driven, 15 percent in efficiency-driven, and
8 percent in innovation-driven).
- Established business ownership is also highest in the
factor-driven group (13 percent for factor-driven, 8 percent for
efficiency-driven, and 7 percent for innovation-driven).
- The proportion of established business owners relative to TEA
in factor-driven economies is smaller than in the
innovation-driven.
- High rates of both TEA and established business ownership are
exhibited in Senegal and
Ecuador, where more than one-third
of the population is starting or running a new business, and over
one-sixth is running a mature one.
- Entrepreneurial Employee Activity (EEA) is highest in the
innovation-driven economies (1 percent for factor-driven, 2 percent
for efficiency-driven, and 5 percent for innovation-driven).
- Norway
and Australia report the highest EEA rates, at 8 percent
or more of their adult populations.
- Discontinuance is highest in factor-driven economies (8 percent
for factor-driven, 5 percent for efficiency-driven, and 3 percent
for innovation-driven).
- A lack of profits or finance explain half or more of the exits
in factor and efficiency-driven economies.
- The innovation-driven group shows equal proportions of exits
due to unprofitability compared to the other two development
stages, but these economies are less than half as likely to name
finance problems as a reason for business exits.
- Both the efficiency-driven and innovation-driven economies show
four times the proportion of exits due to bureaucracy compared to
the factor-driven group.
Motivation for Early-Stage Entrepreneurial Activity
- Most entrepreneurs worldwide are motivated by opportunity,
rather than necessity.
- The innovation-driven economies show the highest proportion of
opportunity-motivated entrepreneurs, at 78 percent.
- In the factor and efficiency-driven economies, 69 percent
stated they chose to pursue an opportunity as a basis for their
entrepreneurial motivations.
- Among entrepreneurs with opportunity-driven motives, a portion
seek to improve their situation, either through increased
independence or income (versus maintaining income). GEM refers to
these as improvement-driven opportunity (IDO) entrepreneurs.
- GEM's Motivational Index reveals that there are one and a half
times as many IDO entrepreneurs as necessity-driven ones, on
average, in factor-driven economies, and twice as many in
efficiency-driven economies.
- In innovation-driven economies, there are three and a half
times as many IDO entrepreneurs as necessity-motivated ones.
Gender and Age Distribution of Early-Stage Entrepreneurial
Activity
- Among development levels, the factor-driven economies have the
highest average female TEA rates at 20 percent, and the highest
rate relative to men.
- Among those entrepreneurs, however, women are nearly one-third
more likely to start a business out of necessity than men.
- In six economies, women show equal or higher entrepreneurship
rates than men (Vietnam,
Philippines, Thailand, Malaysia, Peru, and Indonesia).
- Among the 45 participating economies from 2013-2015, several
showed year-over-year increases in ratios of both female to male
entrepreneurship rates, and female to male opportunity motives,
bringing these economies closer to gender parity in either or both
measures.
- Among these are two European countries (Luxembourg and Greece), and three from Latin America and the Caribbean (Ecuador, Colombia, and Panama).
- The overall age pattern for entrepreneurship shows the highest
participation rates among the 25-35 and 35-44 year-olds – people in
their early and mid-careers.
Industry Sector Participation
- Nearly half or more of the entrepreneurs in the factor and
efficiency-driven groups operate wholesale or retail
businesses.
- Nearly half of the entrepreneurs in the innovation-driven
economies started businesses in information and communications, as
well as financial, professional, health, education, and other
services industries.
- An emphasis in particular sectors can be seen in several
economies, including agriculture in India, mining in Tunisia, manufacturing in Egypt, wholesale/retail in the Philippines, information and
communications technology in Sweden and Belgium, finance in Slovakia, and professional services in
Norway.
Job Creation Projections
- The average frequency of medium-to-high growth oriented
entrepreneurs (expecting to employ six or more) is similar across
all economic development levels (18 percent for factor driven, 21
percent for efficiency-driven, and 20 percent for
innovation-driven).
- At 32 percent, entrepreneurs in the
United States have high job creation ambitions compared to
the 20 percent average in innovation-driven economies.
- The highest rates of medium-to-high growth entrepreneurs can be
found in efficiency-driven economies in Latin America and the Caribbean (Colombia and Chile), Asia
and Oceania (Taiwan, China, and Kazakhstan), Africa (Tunisia), and Europe (Romania and Ireland).
- The innovation-driven economies have, on average, the highest
proportion of prospective non-employer entrepreneurs (40 percent
for factor-driven, 39 percent for efficiency-driven, and 45 percent
for innovation-driven).
Innovation
- Average innovation levels increase with development level (21
percent for factor-driven, 24 percent for efficiency-driven, and 31
percent for innovation-driven).
- From a regional perspective, innovation levels are highest in
North America.
- Within individual economies, the highest levels can be seen in
Chile and India, where over half of the entrepreneurs
state they have innovative products or services.
Internationalization
- The innovation-driven phase of development reveals the highest
average level of internationalization (6 percent for factor-driven,
13 percent for efficiency-driven, and 20 percent for
innovation-driven).
- Panama and four European
economies (Luxembourg,
Switzerland, Croatia, and Slovenia) each contain over one-third of
entrepreneurs with substantial international sales.
- Canada also shows a high rate
of internationalization, boosting North
America's average.
Download the report (pdf) »
About the Global Entrepreneurship Monitor (GEM)
The Global Entrepreneurship Monitor (GEM) was initiated in
1999 as a joint venture of Babson
College and the London Business
School. Starting with 10 participating economies, the
project expanded to include 73 economies in its 2014 survey. The
latest survey spans 62 economies. GEM is the largest and most
developed research program on entrepreneurship in the world. GEM is
unique because, unlike most entrepreneurship data sets that measure
newer and smaller firms, GEM studies the behavior of individuals
with respect to starting and managing businesses. GEM academic
teams in each participating economy are members of an exclusive
research project that provides access to the collective knowledge
of some of the world's most renowned researchers and institutions
involved in entrepreneurship research. At a time in history when
individual entrepreneurial activity may hold the key to
transforming the global economy and discouraging ingrained economic
disparity in countries with minimal economic opportunity, GEM data
has influenced national economic policies and continues to expand
its collaborative role. Global sponsors of the research include
Babson College (lead sponsor) in
the United States, Universidad Del
Desarrollo in Chile, Universiti
Tun Abdul Razak in Malaysia, and
Tecnológico de Monterrey in
Mexico. For more information,
follow GEM on Twitter.
About Babson College
Babson College is the educator,
convener, and thought leader for Entrepreneurship of All
Kinds®. The top-ranked college for
entrepreneurship education, Babson is a dynamic living and learning
laboratory where students, faculty, and staff work together to
address the real-world problems of business and society. We prepare
the entrepreneurial leaders our world needs most: those with strong
functional knowledge and the skills and vision to navigate change,
accommodate ambiguity, surmount complexity, and motivate teams in a
common purpose to make a difference in the world, and have an
impact on organizations of all sizes and types. As we have for
nearly a half-century, Babson continues to
advance Entrepreneurial Thought and Action® as
the most positive force on the planet for generating sustainable
economic and social value.
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