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Emprendimiento
Entreprenørskap
Entrepreneurship
Entrepreneuriat
Empreendedorismo
Global Entrepreneurship Monitor
2010 Global Report
Entreprenörskap
Poduzetnistvo
´
´
Podjetnistvo
´
´
Donna Kelley Niels Bosma José Ernesto Amorós
Okuyiiyawo
O
*
Global Entrepreneurship Monitor
2010 Global Report
Donna J. Kelley,
Niels Bosma,
José Ernesto Amorós
GEM Global Report 2010
2
FOUNDING AND SPONSORING INSTITUTIONS:
Babson College, Babson Park, MA, United States
Lead Sponsoring Institution and Founding Institution
Universidad del Desarrollo, Santiago, Chile
Sponsoring Institution
London Business School, London, United Kingdom
Founding Institution
Although GEM data were used in the preparation of this report, their interpretation and use are the sole
responsibility of the authors.
e authors thank Marcia Cole, Yana Litovsky and Carlos Poblete for their various contributions to this
report. ey also wish to acknowledge the contributions of Michael Hay and Jonathan Levie for their insightful
comments on this report.
e 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 Research
Association (GERA)
GLOBAL ENTREPRENEURSHIP MONITOR
2010 Global Report
Donna J. Kelley, Niels Bosma, José Ernesto Amorós
Table of Contents
Executive Summary 7
1. Introduction and Background 12
1.1 Entrepreneurship’s Role in the Global Economy 12
1.2 GEM Measures 12
1.3 Economic Development Level and Entrepreneurship 14
1.4 The GEM Model 14
1.5 Structure of the Report 16
2. A Global Perspective on Entrepreneurship in 2010 17
2.1 Attitudes 17
2.2 Activity 22
2.3 Aspirations 40
3. Entrepreneurship Framework Conditions — an Assessment of Institutional
Quality by National Experts 45
4. Entrepreneurship and the Global Economy in 2010 49
4.1 The Impact of Recessions on Entrepreneurship: Evidence from GEM Data 50
4.2 Analysis of GEM Economies: 2002–2010 52
4.3 Entrepreneurs’ Impressions of the Impact of the Recession on Entrepreneurship Activity 55
5. Conclusions and Implications 58
Appendix 1: Background on GEM 61
Appendix 2: Glossary of Main Measures and Terminology 63
Appendix 3: Characteristics of GEM Surveys 65
3
GEM Global Report 2010
GEM National Teams 2010 67
About the Authors 78
GEM Sponsors 79
Contacts 80
Notes and References 81
List of Figures
Figure 1: The Entrepreneurship Process and GEM Operational Definitions 13
Figure 2: Characteristics of Economic Groups and Key Development Focus 14
Figure 3: The GEM Model 15
Figure 4: Total Early-Stage Entrepreneurial Activity (TEA) for 59 Economies in 2010,
by Phase of Economic Development, Showing 95 Percent Confidence Intervals 24
Figure 5: Total Early-Stage Entrepreneurial Activity Rates and Per Capita GDP 2010 27
Figure 6: Necessity-Based Early-Stage Entrepreneurial Activity and Per Capita GDP 2010 28
Figure 7: Correlation Between Rule of Law and the Degree of Improvement-Driven
Opportunity motivation for Early-Stage Entrepreneurial Activity 30
Figure 8: Sector Distribution of Total Early-Stage Entrepreneurship Activity by Phase of
Economic Development 31
Figure 9: Sector Distribution of Total Early-Stage Entrepreneurship Activity by Geographic Region 32
Figure 10: Age Distribution of Entrepreneurs by Phase of Economic Development 33
Figure 11: Age Distribution of Entrepreneurs by Geographic Region 34
Figure 12: GEM Economies Ranked by Level of Female Participation in Total Early-Stage
Entrepreneurship Activity (TEA) by Economic Group, 2010 35
Figure 13: Established Entrepreneurial Activity for 59 Economies in 2010, by Phase of
Economic Development, Showing 95 Percent Confidence Intervals 36
Figure 14: Discontinuations of Entrepreneurial Activity and Per Capita GDP 2010 38
Figure 15: Reasons for Business Discontinuance by Economic Phase, 2008–2010 39
Figure 16: Job Growth Expectations for Early-Stage Entrepreneurship Activity, 2008–2010 41
Figure 17: Differences in Job Growth Expectations Between Nascent Entrepreneurs and
Owner-Managers in New Firms, by Economic Stage of Development and Country, 2008–2010 41
Figure 18: Innovation for Early-Stage Entrepreneurship Activity, 2008–2010 43
Figure 19: Percentage of Early-Stage Entrepreneurs with International Orientation, 2008–2010 44
Figure 20: The GEM Entrepreneurship Framework Conditions 46
Figure 21: Scores on Entrepreneurship Framework Conditions Rated by National Experts,
by Stage of Development (Unweighted Country Averages) 47
Figure 22: Entrepreneurial Attitudes in Ireland 2002–2010 51
Figure 23: Entrepreneurial Activity in Ireland 2002–2010 51
Figure 24: Percentage in the Working Age Population Perceiving Good Opportunities
to Start a Business in the Area where they Live, by Country, for 2002–2004,
2005–2007 and 2008–2010, Respectively 53
Figure 25: Owner-Managers of New Firms: Percentage in the Working Age Population,
by Country, for 2002–2004, 2005–2007 and 2008–2010. Respectively 53
Figure 26: Percentage of Early-Stage Entrepreneurs Indicating that they Are Involved in
Entrepreneurship Out of Necessity, by Country, for 2002–2004, 2005–2007 and
2008–2010. Respectively 54
4
Figure 27: Growth Expectations: Percentage of Early-Stage Entrepreneurs Expecting to
Have at Least 5 Employees Five Years From Now (or After The Start-Up) for 2002–2004,
2005–2007 and 2008–2010, Respectively 54
Figure 28: Percentages of Total Early-Stage Entrepreneurs Who Find Starting a Business
Now More Difficult Compared to One Year Ago, 2009 And 2010 56
Figure 29: Percentages of Established Entrepreneurs Whose Expectations for Growth
Are Lower Compared to One Year Ago, 2009 And 2010 56
Figure 30: Impact of the Global Economic Slowdown on Entrepreneurs’ Perception of
Opportunities for Their Businesses, According to the Entrepreneurs (Unweighted Country Averages) 57
List of Tables
Table 1: GEM Countries Classified by Economy and Geography 8
Table 2: Entreneurial Attitudes and Perceptions in the GEM Countries in 2010 by Phase
of Economic Development 17
Table 3: Entrepreneurial Activity in the 59 GEM Countries in 2010, by Phase of Economic
Development 22
Table 4: Entrepreneurship Framework Conditions: Three Valued Most Positive (+) and
Three Most Negative (-), Per Country 48
5
Table of Contents
7
With this report, the Global Entrepreneurship
Monitor (GEM) has completed 12 annual surveys of
the entrepreneurial attitudes, activities and aspira-
tions of individuals around the world. Starting with
just 10 developed countries in 1999, GEM has grown
to include over 80 economies during the course of
these 12 years. In 2010, over 175,000 people were
surveyed in 59 economies. ese 59 economies rep-
resent not only the largest sample yet, but also the
most geographically and economically diverse group
surveyed. Together, this group covers over 52% of the
world’s population and 84% of the world’s GDPi.
e 2010 survey shows that, in the economies ana-
lyzed, some 110 million people between 18 and 64 years
old were actively engaged in starting a business. Anoth-
er 140 million were running new businesses they start-
ed less than 3½ years earlier. Taken together, some 250
million were involved in what GEM defines as early-
stage entrepreneurial activity. Out of these individuals,
an estimated 63 million people expected to hire at least
five employees over the next five years, and 27 million
of these individuals anticipated hiring twenty or more
employees in five years. is illustrates the contribution
of entrepreneurship to job growth across the globe.
GEM takes a comprehensive snapshot of entre-
preneurs around the world, measuring the attitudes
of a population and the activities and characteris-
tics of individuals participating in various phases of
entrepreneurship. Also revealed are the aspirations
these entrepreneurs hold for their businesses, along
Executive Summary
with other key features of their ventures. is effort
is accomplished through the collaborative work of
a consortium of national teams consisting of aca-
demic researchers from across the globe. Each GEM
national team oversees an annual survey of at least
2,000 adults. In addition, they consult with national
experts on factors that can explain the nature and
level of entrepreneurship in their economies.
GEM groups the participating economies into
three levels: factor-driven, efficiency-driven, and inno-
vation-driven. ese are based on the World Economic
Forum’s (WEF) Global Competitiveness Report ii, which
identifies three phases of economic development
based on GDP per capita and the share of exports
comprising primary goods.
According to the WEF classification, the fac-
tor-driven phase is dominated by subsistence ag-
riculture and extraction businesses, with a heavy
reliance on labor and natural resources. In the
efficiency-driven phase, further development is ac-
companied by industrialization and an increased
reliance on economies of scale, with capital-inten-
sive large organizations more dominant. As devel-
opment advances into the innovation-driven phase,
businesses are more knowledge intensive, and the
service sector expands.
GEM additionally considers geographic factors,
grouping countries into six geographic regions: Sub-
Saharan Africa, the Middle East and North Africa
GEM Global Report 2010
8
Africa. While some economies have emerged out of
this crisis, others remain stuck in a morass of high
unemployment, weak consumer spending and out-
of-control debt loads.
For the 41 economies that participated in both
the 2009 and 2010 GEM survey, a comparison of
Total Early-Stage Activity (TEA) rates from 2009 to
2010 shows a mix of increases and decreases (or no
change) across all three economic groups. While the
number of positive and negative shis was roughly
equal in the factor-driven and efficiency-driven
economies, the balance tipped slightly toward more
declines in the innovation-driven group. Geographi-
cally, there are both positive and negative changes in
most regions of the world.
(MENA) / South Asia, Latin America and the Carib-
bean, Eastern Europe, Asia/Pacific and the United
States and Western Europe. With all groupings, we
can compare economies across similar development
levels and geographic locations. e economic and
geographic groupings are shown in Table 1.
is year’s survey was conducted during June and
July of 2010, at a time when the world was still strug-
gling to emerge from the 2008–2009 recession, and
with the future economic stability of many nations
still in question. e recession’s prolonged impact
was demonstrated most considerably in the contin-
ued negative or sluggish GDP growth in the devel-
oped world, while new growth engines were taking
root in developing countries, particularly in Asia and
Table 1: GEM Countries Classified 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, Costa
Rica, 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/North
Africa (MENA) -
South Asia
Latin America and
Caribbean
Eastern Europe
Asia Pacific
United States and
Western Europe
* In transition to next stage
els. In the efficiency-driven group, the highest TEA
rates were found in the Latin American and Carib-
bean economies, while lower levels were reported in
Eastern Europe. Iceland, Australia and the United
States showed the highest TEA rates among the in-
novation economies.
While the factor-driven economies have the high-
est TEA rates, they also have the highest proportion
of necessity-driven motives, where entrepreneurs are
pushed into entrepreneurship because they need a
source of income. e innovation-driven group had
the lowest necessity rate, but the highest proportion
of opportunity-driven motives, where entrepreneurs
are pulled into entrepreneurship because they rec-
ognize an opportunity that can improve or maintain
their incomes or increase their independence.
Nordic countries (Netherlands, Sweden, Den-
mark and Iceland) showed especially high pro-
portions of opportunity motives. A plot of im-
provement-driven opportunity (desire to improve
incomes or increase independence) against “rule of
law” (extent people have confidence in, and abide
by the rules of society) shows that this motive in-
creases with greater rule of law.
An examination of the proportion of entrepre-
neurial activity in the four main industry sectors
shows that extraction businesses (farming, forestry,
fishing and mining) are more dominant in factor-
driven economies. Business services are more com-
mon in the innovation-driven economies. is is
consistent with the description of development
phases. Transforming businesses (manufacturing
and construction), however, are equally prevalent
across all three economic levels, rather than domi-
nant in the efficiency group. Participation in the
consumer-oriented sector generally decreases with
higher development levels.
In each economic group, there are more entre-
preneurs in the 25–34 age group than any other age
range. Women’s participation in entrepreneurship
relative to men ranges markedly: In the Republic of
Korea there are five times more men than women
entrepreneurs, while in Ghana there are fewer men
than women starting businesses.
e rate of established business ownership (those
running businesses more than 3 ½ years old) de-
Key Overall Findings
Attitudes
Individuals in factor-driven economies tended to
generally rate more positively on the attitude mea-
sures, with declining patterns exhibited with high-
er development levels. Some of the measures also
showed geographic patterns within the three eco-
nomic groupings.
In the factor-driven group, individuals in the
Sub-Saharan African countries exhibited high per-
ceptions about the presence of opportunities in their
area, their capabilities for entrepreneurship and their
intent to start businesses. In contrast, the MENA/
South Asian countries had mostly lower perceptions
on these measures. A similar geographic distinction
was illustrated in the efficiency-driven group: Latin
America reported high perceptions about opportu-
nities and capabilities, while Eastern Europe was low
on these measures. In the innovation group, there
was a distinction between high opportunity and ca-
pability perception in the Nordic regions and lower
perceptions in southern Europe.
Fear of failure showed less distinction among de-
velopment levels and geographic location. Perceptions
about the status and media attention of entrepreneurs,
and the attractiveness of this type of career choice
showed a mix on these three measures. For example,
people in some economies generally believed entre-
preneurs had high status; nonetheless they had little
desire to pursue this career. Other economies saw en-
trepreneurship as an attractive career option, despite
little status or attention associated with this pursuit.
Activity
Total Early-Stage Entrepreneurial Activity (TEA)
includes individuals in the process of starting a busi-
ness and those running new businesses less than 3 ½
years old. ese rates are highest for the factor-driv-
en economies, and decline with greater development
levels. At the very highest GDP levels, however, we
notice a slight upward trend in TEA levels.
In the factor-driven economies, the Sub-Saharan
African countries have among the highest TEA rates,
with the MENA group exhibiting relatively lower lev-
9
Executive Summary
GEM Global Report 2010
and growing firms were among the most negatively
evaluated factors.
e final section of the report examines the
impact of the most recent recession on entrepre-
neurship. Perceptions improved in more developed
economies in 2010, where the recession took root
starting around 2008. Fewer entrepreneurs in many
of the innovation-driven economies thought it was
more difficult to start a business compared to a year
ago, although there were still some pessimists in the
mix. In addition, fewer of these entrepreneurs felt
negative effects from the global slowdown this year,
and as many as one-quarter saw more opportunities
compared to a year earlier.
Implications
At a time when governments are faced with the
challenges of reviving their economies, they can look
toward entrepreneurship as a major stimulus of new
employment. With GEM as a guide, they can make
comparisons across countries on a variety of aspects
around entrepreneurship, deriving insights about the
attractiveness of their environments for entrepre-
neurship. Others, like educators, can build greater
awareness of entrepreneurship around the world,
just as business increasingly requires cross-global un-
derstanding. is report is intended to inform such
stakeholders in promoting entrepreneurship and, as
such, improving employment growth and economic
development worldwide.
With 59 countries participating in this year’s sur-
vey, we have more economies with which to make
comparisons across the three development groups,
as well as enough geographic coverage to identify
insights about regions. Following are some implica-
tions of the report.
• Entrepreneurship does not impact an economy
simply through higher numbers of entrepreneurs.
It is important to consider quality measures, like
growth, innovation and internationalization.
• Economies need to enable people to start busi-
nesses when it is necessary, but they also need to
encourage those attracted by opportunity to venture
into entrepreneurship, even when they have other
work options.
clines with greater economic wealth. In comparison,
TEA levels are higher than established business rates
in the factor-driven group, but decline more steeply
with greater development levels. As such, TEA levels
drop below the level of established businesses for most
economies in the innovation-driven phase. Stated dif-
ferently, there are more nascent and new businesses
than established businesses in less-developed regions,
but this shis in the advanced economies, with estab-
lished firms tending to outpace nascent and new ones.
e rate of business discontinuance is highest in
the factor-driven countries, with personal reasons
indicated more oen as a reason for discontinuing
relative to the other economies. Across all the econo-
mies, however, financial issues (unprofitable busi-
nesses or problems obtaining financing) weigh most
heavily in business exits.
Aspirations
e efficiency and innovation economies have
similar proportions of entrepreneurs with high-
growth aspirations. ese levels are higher than in
the factor-driven economies. Notably, the MENA and
Eastern European economies, although exhibiting low
TEA rates, show relatively high-growth expectations.
e innovation measures show especially high
variation among the efficiency-driven economies,
ranging from lower levels in Brazil and Trinidad/
Tobago to high levels in Peru and Chile. Among the
innovation-driven economies, there was relatively
little variation on this measure.
e factor-driven economies revealed the low-
est level of international customers on average. e
Eastern European region generally showed a high
level of internationalization. On the other hand,
economies with big territories (for example: Iran,
Brazil, China and Argentina) exhibited lower inter-
national orientation.
Interviews with national experts revealed insights
on factors impacting the environment for entrepre-
neurship in the economies. Physical infrastructure
and the commercial and legal infrastructure received
among the most positive evaluations across the
economies. Education and training in primary and
secondary school and regulations impacting new
10
• Initiatives aimed toward improving entrepre-
neurship should consider the development level of
the economy. With a strong set of basic requirements
in place, efforts can turn toward reinforcing efficien-
cy enhancers, and then building entrepreneurship
framework conditions.
• An entrepreneurial mindset is not just for
entrepreneurs. It must include a variety of stake-
holders that are willing to support and cooperate
with these dynamic efforts. In addition, non-en-
trepreneurs with entrepreneurial mindsets may
indirectly stimulate others to start businesses. is
indicates the value of broader societal acceptance
of entrepreneurship.
• Entrepreneurship needs both dynamism and
stability. Dynamism occurs through the creation of
new businesses and the exit of non-viable ones. Sta-
bility comes from providing new businesses with the
best chance to test and reach their potential.
• Comparisons across both development-level
and geographic groups may enhance understanding
about entrepreneurship and the conditions that im-
pact it, both within and across economies.
• Entrepreneurship in a society should contain a
variety of business phases and types, led by different
types of entrepreneurs, including women and under-
represented age groups.
11
Executive Summary
GEM Global Report 2010
12 Capítulo 1 Introducción
can leverage their wealth and innovation capacity,
yet they also offer more employment options to at-
tract those that might otherwise become entrepre-
neurs. In order to maintain their entrepreneurial
dynamism, they need to instill more opportunity-
based motives.
Second, an economy’s entrepreneurial capacity
requires individuals with the ability and motivation
to start businesses, and requires positive societal
perceptions about entrepreneurship. Entrepreneur-
ship should include participation from all groups
in society, including women, a range of age groups
and education levels and disadvantaged popula-
tions. Finally, high-growth entrepreneurship is a
key contributor to new employment in an economy,
and national competitiveness depends on innova-
tive and cross-border entrepreneurial ventures.
GEM Measures
At the time of GEM’s founding, traditional
analyses of economic growth and competitiveness
had, for the most part, neglected the role played by
new and small firms in national economies, due,
in some measure, to the lack of good data on this
sector. is information, when available, tended to
be present in only those countries at the most ad-
vanced stages of economic development. Existing
1
Introduction and Background
1.1 Entrepreneurship’s Role in the
Global Economy
Most policymakers and academics agree that
entrepreneurship is critical to the development
and well-being of society. Entrepreneurs create
jobs. ey drive and shape innovation, speeding
up structural changes in the economy. By introduc-
ing new competition, they contribute indirectly to
productivity. Entrepreneurship is thus a catalyst for
economic growth and national competitiveness.
GEM focuses on three main objectives:
• To measure differences in entrepreneurial at-
titudes, activity and aspirations among economies.
• To uncover factors determining the nature and
level of national entrepreneurial activity.
• To identify policy implications for enhancing
entrepreneurship in an economy.
GEM is based on the following premises. First,
an economy’s prosperity is highly dependent on
a dynamic entrepreneurship sector. is is true
across all stages of development. Yet the nature of
this activity can vary in character and impact. Ne-
cessity-driven entrepreneurship, particularly in less
developed regions or those experiencing job losses,
can help an economy benefit from self-employment
initiatives when there are fewer work options avail-
able. Mor e develope d economie s, on the oth er hand,
1.2
13
GEM’s research is to promote entrepreneurship
as a process comprising different phases, from in-
tending to start, to just starting, to running new
or established enterprises and even discontinu-
ing thes e. Figure 1 summarizes the entrepreneur-
ship process and GEM’s operational definitions.
For more information on the history of GEM, see
“Background on GEM” in Appendix 1. For more
information on the GEM methodology, visit the
website at www.gemconsortium.org. e most
common operational variables and their defini-
tions are outlined in Appendix 2.
services or the pursuit of customers beyond national
borders. ey may also include high-growth ambi-
tions, thereby contributing more markedly to new
employment in their economies.
Recognizing that entrepreneurs are driven not only
by their own perceptions about starting a business, but
the attitudes of those around them, GEM considers the
attitudes representing the climate for entrepreneurship
in a society. Entrepreneurs need to be willing to take
risks and have positive beliefs about the availability of
opportunities around them, their ability to start busi-
nesses and the value of doing so. At the same time, they
need customers who are willing to buy from them,
vendors willing to supply them and families and inves-
tors ready to support their efforts. Even positive soci-
etal perceptions about entrepreneurship may indirectly
stimulate this activity.
measures, such as self-employment rates, did not
reflect the dynamic scope of entrepreneurship. And
while most governments have long maintained re-
cords of formal business registrations, it wasn’t un-
til GEM emerged that an accurate picture could be
drawn of the people, and how many of them started
businesses in different corners of the world.
e main guiding purpose of GEM is to mea-
sure individual involvement in venture creation.
is differentiates GEM from other data sets, most
of which record firm-level data. A second aim of
rough the wealth of measures GEM tracks, we
can understand which types of people are (and are
not) participating in entrepreneurship. We capture
both those formally registering their businesses and
those running informal ones. ese unregistered
businesses, in fact, can compose as much as 80% of
economic activity in developing countriesiii.
People launch businesses for a variety of reasons.
ey may be led into entrepreneurship out of neces-
sity: the pursuit of self-employment when there are no
better options for work. In contrast, their efforts may
be powered by the desire to maintain or improve their
income, or to increase their independence. GEM there-
fore assesses the motives of entrepreneurs
GEM additionally measures aspirations. ese
aspirations may be evident in innovative products or
Figure 1: The Entrepreneurship Process and GEM Operational Definitions
Discontinuation of
Business
Owner-Manager of an
Established 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-Manager
of a New Business
(up to 3.5 years old)
Chapter 1 Introduction and Background
GEM Global Report 2010
14
Figure 2: Characteristics of Economic Groups and Key Development Focus
their early stages of development, economies typi-
cally have a higher proportion of necessity-driven
activities. Here, the demand for jobs in high-pro-
ductivity sectors outpaces supply. As a result, many
people must create their own source of income.
With further development comes the growth of
productive sectors. is increases employment ca-
pacity but leads to gradual declines in the level of
necessity-driven entrepreneurship. At the same time,
improvements in wealth and infrastructure stimu-
late opportunity-based businesses, shiing the na-
ture of entrepreneurship activity. ese ventures are
more likely associated with greater aspirations for
growth, innovation and internationalization. ey
rely, however, on the economic and financial institu-
tions created during the developing phases. To the
extent these institutions are able to accommodate
and support opportunity-seeking entrepreneur-
ship activity, innovative entrepreneurial firms may
emerge as significant drivers of economic growth
and wealth creationvi.
As Figure 3 shows, the key imperative in factor-
driven economies lies in building basic requirements
such as primary education, healthcare, infrastruc-
ture and so forth. Later-stage factors like entrepre-
neurial finance and government entrepreneurship
programs are unlikely to have substantial impact if,
for instance, entrepreneurs don’t have good roads
to transport goods or a sufficiently educated labor
force from which they can recruit employees. In
other words, investments in entrepreneurship-spe-
cific framework conditions may be less effective in
enabling business creation if they are made at the
expense of basic requirements.
1.3
1.4
GEM’s harmonized dataset enables comparisons
of entrepreneurship activity around the globe, and
within and across geographic regions. is report ad-
ditionally examines groups of economies at similar
development levels. Following a typology used by the
World Economic Forum, GEM classifies the 59 GEM
participants as “factor-driven,” “efficiency-driven” or
“innovation-driven” economiesiv. Figure 2 illustrates
the characteristics of these economic groups and the
key development focus at each level.
As an economy develops, productivity increases
and, consequently, so does per capita income. is is
oen accompanied by the migration of labor across
different economic sectors. For example, labor may
move from agricultural and extractive sectors to
manufacturing, and then eventually to servicesv. In
Figure 3 illustrates the GEM model, which shows,
first, the relationship between the social, cultural and
political context and three sets of framework condi-
tions. ese framework conditions are modeled as
impacting the attitudes of a population toward en-
trepreneurship, and the activity and aspirations of
entrepreneurs. In turn, entrepreneurship activity, as
well as the growth of established firms in the primary
economy, influence economic growth.
Economic Development Level
and Entrepreneurship
The GEM Model
Basic Requirements Efficiency Enhancers Entrepreneurship Conditions
Factor-Driven Efciency-Driven Innovation-Driven
From subsistence agriculture to
extraction of natural resources,
creating regional scale-intensive
agglomerations.
Increased industrialization
and economies of scale. Large
rms dominate, but supply
chain niches open up for small
and medium enterprises.
R&D, knowledge intensity,
and expanding service sector.
Greater potential for innovative
entrepreneurial activity.
15
function properly. e nurturing of economies of
scale can, in fact, be complemented by the emergence
of growth- and technology-oriented entrepreneurs,
expanding the scope of employment in a society.
Advanced economies have a relatively sophis-
ticated foundation of basic requirements and effi-
ciency enhancers. While these factors are essential
in sustaining necessity-based entrepreneurship, they
may be insufficient drivers of opportunity-based
behavior. Here, knowledge is prevalent but labor is
expensive. Entrepreneurship-specific framework
conditions become the levers that drive dynamic, in-
novation-oriented behavior, while the foundation of
basic requirements and efficiency enhancers needs
to be maintained.
Entrepreneurs with high aspirations fare better in
countries with a stable economic and political climate
and well-developed institutions. is, in fact, may ac-
count for the activities of certain groups of immigrants
into wealthier economies. At the same time, economic
progress begets scale economies. Large firms are more
efficient from a national perspective and, for many in-
dividuals, a more attractive employment alternative to
necessity-based entrepreneurship.
To replace the migration of necessity entre-
preneurs toward employment in large companies,
efficiency-driven economies must attract more op-
portunity-based entrepreneurship. e second set of
framework conditions represents efficiency enhanc-
ers. ese are directed toward ensuring that markets
Social,
Cultural,
Political
Context
Established rms
(Primary economy)
Attitudes:
- Perceived opportunities
- Perceived capacity
Activity:
- Early-stage
- Persistence
- Exits
Aspirations:
- Growth
- Innovation
- Social value creation
New plants, rm growth National
Economic
Growth
(Jobs and
Technical
Innovation)
ENTREPRENEURSHIP
Basic requirements
- Institutions
- Infrastructure
- Macroeconomic stability
- Health and primary education
Efciency enhancers
- Higher education & training
- Goods market efciency
- Labor market efciency
- Financial market sophistication
- Technological readiness
- Market size
Innovation and entrepreneurship
- Entrepreneurial nance
- Government policy
- Government entrepreneurship
programs
- Entrepreneurship education
- R&D transfer
- Internal market openness
- Physical infrastructure for entre-
preneurship
- Commercial, legal infrastructure
for entrepreneurship
- Cultural and social norms
From GEM
National Expert
Surveys (NES)
From GEM
Adult Population
Surveys (APS)
From other
available sources
Figure 3: The GEM Model
Chapter 1 Introduction and Background
GEM Global Report 2010
With regard to entrepreneurship activity, we
analyze Total Early-Stage Entrepreneurship Activ-
ity (TEA), which combines nascent and new business
measures. TEA is then discussed in terms of its rela-
tionship to development level, expressed as GDP per
capita, adjusted for purchasing power parity (PPP). We
then describe the necessity and opportunity-driven
components of TEA. Additional characteristics include
the proportion of entrepreneurs operating in various
business sectors, as well as age and gender factors.
e discussion then turns to established busi-
ness and business discontinuance. Finally, we de-
scribe the aspirations of entrepreneurs: growth
projections for their businesses, the level of inno-
vativeness from a product, market, and competitive
standpoint and the extent their customers come
from outside their economy.
e final sections include an overview of results
from the National Expert Survey (NES) and an analy-
sis of entrepreneurship and the global economy in
2010. We close with a summary of key conclusions
and implications.
1.5
is report reveals results of the measures of
entrepreneurial attitudes, activity and aspirations
from the GEM 2010 Adult Population Survey (APS).
ese results include comparisons of economies in
the three development phases, and also comparisons
of different geographic regions within each develop-
ment phase. We highlight particular economies in
some cases to illustrate unique findings.
is report proceeds as follows. We first exam-
ine entrepreneurial attitudes, activities and aspira-
tions in the 59 participating economies. entrepre-
neurial attitudes encompass several dimensions:
views about the presence of good entrepreneurial
opportunities in one’s area, beliefs about one’s ca-
pabilities for starting a business, fear of failure,
perceptions about the status of entrepreneurs and
their media image, the attractiveness of entrepre-
neurship as a career choice and finally, intent to
start a business.
Structure of the Report
16
17
GEM measures several indicators of attitudes:
the extent to which people think there are good op-
portunities for starting a business and their capa-
bilities for doing so. Also measured is fear of failure
or its inverse: the level of risk individuals might
be willing to assume to start a business. Percep-
tions about entrepreneurship are reflected in ques-
tions about the status of entrepreneurs, their media
image and whether it makes an attractive career
choice. Finally, GEM assesses intent to start a busi-
ness in the individuals it surveys. e results are
shown in Table 2.
2
A Global Perspective on
Entrepreneurship in 2010
2.1
Attitudes
Entrepreneurial attitudes convey the general
feelings of a population toward entrepreneurs and
entrepreneurship. A society can benefit from people
who are able to recognize valuable business opportu-
nities, and who perceive they have the required skills
to exploit them. Moreover, if the economy in general
has positive attitudes toward entrepreneurship, this
will generate cultural support, financial resources,
networking benefits and various other forms of as-
sistance to current and potential entrepreneurs.
Table 2: Entrepreneurial Attitudes and Perceptions in the GEM Countries in 2010 by
Phase of Economic Development
Factor-Driven Economies
67.3
53.2
38.8
75.7
62.9
41.6
56.1
51.9
75.8
80.5
73.6
44.0
81.4
61.8
32.2
28.4
25.3
10.4
23.2
30.1
33.0
34.3
39.0
20.7
46.9
40.0
12.8
28.9
73.1
75.8
63.4
74.6
71.0
65.7
80.2
56.2
69.3
86.7
79.6
57.0
77.5
71.5
70.1
62.9
77.7
91.1
73.8
63.6
85.1
76.3
86.8
81.1
55.6
85.3
69.9
75.3
83.3
66.6
89.5
90.7
59.7
84.6
84.8
80.7
92.3
87.3
77.6
83.5
71.8
80.9
74.7
51.1
70.5
78.6
44.1
62.3
77.4
61.0
78.0
81.9
34.3
62.5
72.5
65.3
54.5
49.3
24.3
68.8
30.7
31.4
38.1
32.4
1.0
77.1
50.5
28.2
67.1
42.6
Perceived
Opportunities
Perceived
Capabilities
Fear of
Failure*
Entrepreneur-
ship as a Good
Career Choice
High Status
to Successful
Entrepreneurs
Media Atten-
tion for Entre-
preneurship
Entrepre-
neurial
Intentions **
Angola
Bolivia
Egypt
Ghana
Guatemala
Iran
Jamaica
Pakistan
Saudi Arabia
Uganda
Vanuatu
West Bank and Gaza Strip
Zambia
Average (unweighted)
Continued
GEM Global Report 2010
18
Perceived
Opportunities
Perceived
Capabilities
Fear of
Failure*
Entrepreneur-
ship as a Good
Career Choice
High Status
to Successful
Entrepreneurs
Media Atten-
tion for Entre-
preneurship
Entrepre-
neurial
Intentions **
Efciency-Driven Economies
Innovation-Driven Economies
50.3
38.3
48.1
65.0
36.2
68.2
46.4
23.3
50.3
33.3
29.1
34.3
40.1
55.6
36.1
71.4
17.5
21.7
40.9
29.6
69.1
37.6
36.1
52.1
42.9
45.7
39.6
46.4
51.1
33.9
28.5
15.9
48.7
22.5
35.2
24.7
5.9
13.0
44.8
49.8
20.3
26.8
18.8
66.1
33.3
29.2
34.8
33.4
21.3
27.4
33.2
22.1
32.0
27.7
36.0
31.2
31.2
42.4
39.9
30.9
45.3
33.4
30.4
34.0
41.1
41.7
29.0
43.8
11.6
23.2
25.0
27.7
31.7
35.8
35.1
31.5
28.6
40.5
33.7
50.9
33.7
33.4
46.0
36.8
32.6
32.5
23.8
26.6
29.7
27.5
36.4
28.9
27.0
30.3
26.7
33.1
63.5
62.5
57.9
65.6
42.3
65.1
68.8
53.2
76.6
43.4
50.7
59.7
24.3
64.6
70.9
76.5
38.2
22.7
44.3
26.4
82.8
53.1
54.2
73.3
55.9
53.2
44.9
40.7
39.5
37.3
41.6
52.2
49.0
49.2
41.6
42.4
13.7
29.0
45.5
40.4
52.1
56.3
50.2
42.4
43.9
51.8
59.5
44.4
74.3
76.0
78.0
87.4
70.0
88.6
64.3
67.1
83.1
55.0
58.8
71.3
55.7
69.4
81.0
82.0
66.5
65.4
77.5
68.4
83.2
89.1
71.2
64.8
72.8
57.0
60.0
***
46.1
65.2
53.1
65.6
51.2
51.8
61.3
69.1
28.4
67.6
85.4
57.8
67.5
53.2
65.4
56.9
64.9
51.0
65.4
59.2
67.1
63.0
79.0
71.2
76.9
75.9
63.4
49.9
74.0
73.7
64.8
66.2
68.6
62.8
68.4
76.8
65.5
63.7
77.6
57.5
77.6
92.7
76.4
61.8
69.8
68.4
51.2
***
86.5
67.9
77.1
70.2
60.9
81.5
73.0
69.3
52.0
71.3
68.6
70.7
70.5
73.7
62.5
71.6
76.4
76.7
75.9
70.3
61.7
47.6
81.1
45.7
77.0
66.7
60.8
41.8
62.6
47.4
57.2
56.0
88.0
54.0
69.5
81.2
46.9
46.6
78.6
78.2
67.2
78.4
61.7
43.3
62.5
70.5
45.7
***
71.4
44.7
49.0
34.5
66.6
61.1
56.3
37.7
58.5
61.4
60.9
67.2
52.6
56.2
40.7
60.8
50.6
52.2
67.8
55.5
21.0
16.8
26.5
38.3
26.9
41.3
13.2
7.4
46.3
13.8
21.4
26.7
5.1
22.3
31.9
39.6
8.6
2.6
16.7
25.1
30.4
24.1
19.4
31.8
23.2
8.7
8.2
5.9
5.9
14.2
6.4
12.8
15.7
6.1
14.1
4.0
2.9
10.1
5.5
7.6
8.8
8.7
5.8
8.5
6.7
5.1
7.7
8.2
Argentina
Bosnia and Herzegovina
Brazil
Chile
China
Colombia
Costa Rica
Croatia
Ecuador
Hungary
Latvia
Macedonia
Malaysia
Mexico
Montenegro
Peru
Romania
Russia
South Africa
Taiwan
Trinidad and Tobago
Tunisia
Turkey
Uruguay
Average (unweighted)
Australia
Belgium
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Israel
Italy
Japan
Republic of Korea
Netherlands
Norway
Portugal
Slovenia
Spain
Sweden
Switzerland
United Kingdom
United States
Average (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 denition of entrepreneurship tends to be a moving target - even the
teaching of entrepreneurship causes confusion in the denition. To start
a 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 of innovativeness or growth ex-
pectations. In contrast, Israel (an innovation-driven
country), had a higher proportion of opportunity-
driven motives and a large percentage of individu-
als with high levels of innovativeness and growth
expectations. We could surmise that there are differ-
ent perceptions about what an opportunity encom-
passes, and what capabilities are required, for entre-
preneurship in Uganda versus Israel.
While economic development level may explain
some differences in beliefs about opportunities and
capabilities, there are also some interesting geographic
patterns. In the factor-driven group, individuals in the
sub-Saharan African countries had the highest-level
perception that there were good opportunities for en-
trepreneurship in their area. ese countries also had
above average capability perceptions, with nearly 87%
of the individuals surveyed in Uganda stating that
they had the capabilities to start a business.
e MENA/South Asian countries in the factor-
driven group had the lowest perceptions, except for
Saudi Arabia, where over 75% of individuals per-
ceived there were good opportunities. Perceptions
about capabilities for starting a business were below
average among the factor-driven MENA economies,
although much higher than the overall average of
the other two wealthier economic groups.
Notably, Latin American countries occupied all
the highest levels of opportunity perception in the
efficiency-driven group; they were the only econo-
mies in this group with above average ratings on
this attitude measure. ey also had above average
perception of capabilities.
In contrast, the Eastern European countries had
lower than average opportunity perception in the
efficiency-driven group. Capabilities perception was
also below average, with the exception of Macedonia,
Bosnia/Herzegovina and Montenegro. e same can
be said for the three Asian countries in the efficien-
cy-driven group, as well as Japan and the Republic of
Korea in the innovation-driven group—both oppor-
tunity and capability perceptions were below average.
While all of the Western European countries fall
into the innovation-driven group, a distinction be-
tween some northern and southern regions can be
observed. Nordic countries (Sweden, Finland, Ice-
Perceived Opportunities and
Capabilities
People may decide to start businesses when and
because they recognize—perhaps unexpectedly—
specific entrepreneurial opportunities. e thought
of becoming an entrepreneur may not have even
occurred to them before this idea came into view.
Others may decide to start ventures and undergo a
search for ideas. Entrepreneurs may recognize op-
portunities well in advance, or just before they set
up their businesses. Consequently, the perception of
opportunities relative to new business starts can take
many different paths.
An economy’s entrepreneurial energy derives,
at least in part, from individuals who perceive op-
portunities for launching a business in the area in
which they live. ese people are further encouraged
by their beliefs in their capabilities for starting the
types of ventures they may envisage. e quantity
and quality of the opportunities they perceive, and
their beliefs about their capabilities, may be affected
by various conditions in their environment: for ex-
ample, economic growth, culture and education. Dif-
ferent demographic groups may make distinct judg-
ments about opportunities and capabilities; these
may be embedded in historical, socio-economic or
cultural factors.
At the same time, policy makers may seek to
stimulate these attitudes. Policy programs may ex-
plicitly target groups exhibiting low perceived or
actual capabilities. us, particular sets of national
conditions may affect perceived capabilities, both di-
rectly and indirectly.
On average, individuals in factor-driven econo-
mies have higher perceptions that there are good op-
portunities for entrepreneurship, and that they have
the capabilities to start businesses. ese attitude
measures tend to decline with greater development
levels. is may seem counter-intuitive until we con-
sider, for example, that individuals in different stages
of economic development may have different kinds
of businesses in mind.
For instance, as the activity section shows, half of
the entrepreneurs in Uganda (a factor-driven econ-
omy) started businesses out of necessity, with few
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
20
the Asian economies, Taiwan and Malaysia have the
highest fear of failure in the efficiency-driven group,
while the Republic of Korea and Japan show a below
average rate in the innovation-driven group.
Interestingly, fear of failure among all economies
was highest in Greece. is continues an ongoing
pattern over the past seven years and reflects a strong
aversion to risk, which is confirmed by the relatively
high employment protection ratevii. Employment
protection refers to the number of procedures and
costs required by law to hire or dismiss workers.
e Netherlands had the lowest fear of failure
among the innovation-driven economies. However,
there is a much smaller gap between this country and
others in the innovation-driven group (such as the
U.S., Slovenia and Switzerland, which also have low
fear of failure). More noticeable differences can be
seen in the remarkably low fear of failure reported in
Ghana and Zambia, compared to others in the factor-
driven group, and between Trinidad and Tobago and
the other members of the efficiency-driven group.
e GEM Global 2009 Executive Report showed
that, in factor-driven and efficiency-driven coun-
tries, those with the highest fear of failure rates have
the lowest intentions to start businesses. In addition,
across the sample, fear of failure was lower among
those who saw good opportunities to start a business
compared with the population in general. is sug-
gests that it could be possible to improve perceptions
about opportunities and increase intentions to start
businesses by reducing fear of failure. Policy changes
may have a positive influence on risk propensity:
for example, removing the large firm employment
advantage with respect to health care and pension
benefits, improving the skills of creditors and inves-
tors in assessing higher risk ventures and reducing
negative consequences associated with employment
protection or bankruptcy laws.
Perceptions about Entrepreneurship
Over time, societies and organizations develop
particular cultural and social expectations, reflecting
their members’ values, norms, and a shared under-
standing about how things are done. ese can serve
as informal governance mechanisms, guiding activi-
ties alongside, or in place of, more formal administra-
tive methods. Conformity 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. But
the reverse is generally true for capabilities. e Nor-
dic countries, with the exception of Iceland, had below
average belief about capabilities, while the Southern
European countries, with the exception of Italy, were
above average on this attitude measure.
e United States reports the highest level of per-
ceived capabilities among the innovation-driven coun-
tries, even though opportunity perception was only just
above average. ese mismatches between opportuni-
ty and capability perceptions in the innovation-driven
economies could indicate a need to address conditions
in the environment that can bring into balance this
alertness to opportunities with the beliefs, or perhaps
confidence, in one´s entrepreneurial abilities.
Fear of Failure
Sometimes, the downside risk of failure outweighs
even the most promising gains imagined in the event
of success. In other words, even if the expected re-
turns from entrepreneurship are considerably higher
than the next best alternative, the perceived risks of
starting a business may nonetheless deter some in-
dividuals. Risk-taking propensity can therefore play
a significant role in the transition from potential (or
latent) entrepreneurship to actual business starts. We
could also assume that entrepreneurship is affected
by the wider population’s view on risk, since entre-
preneurs rely on the participation of stakeholders
like employees, investors, suppliers and others.
Characteristics such as age, gender or ethnicity can
influence fear of failure. Young people may not have
families and mortgages to support—in a sense having
less to lose. Immigrants may be shut out of more stable
or lucrative jobs and therefore have fewer options for
generating income. e institutional environment can
also impact this; for instance, bankruptcy legislation
may deter would-be entrepreneurs.
While perceptions about opportunities and capa-
bilities show significant differences among the eco-
nomic groupings, fear of failure shows less distinction
among t hese groups, just slight ly rising with economic
development levels. Geographically, there are few clear
patterns, with economies from each region falling
both above and below average. For example, among
21
higher perception about the status of entrepreneurs
than they are to perceive entrepreneurship as a good
career choice. e innovation-driven group also has
a higher perception about entrepreneurs’ status com-
pared to their perceptions about entrepreneurship as
a career. is is understandable, given how entrepre-
neurs like Sir Richard Branson in the United King-
dom, and Bill Gates, Steve Jobs and recently Mark
Zuckerberg of Facebook in the United States have
gained prominence, not only in their home coun-
tries, but worldwide.
In wealthier economies, with relatively good in-
frastructure, education and other basic and efficiency
factors, shaping attitudes may be more critical because
entrepreneurs are more likely to enter this role because
of choice. At the same time, with status rated higher
than perceptions about entrepreneurship as a career,
it appears that people in these economies may admire
entrepreneurs more than they want to become one.
Entrepreneurs with recognition and status can
serve as role models, in a sense communicating that
entrepreneurship 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, see
themselves taking.
In the efficiency-driven group, on the other hand,
the reverse is true. Individuals believe entrepreneur-
ship is a good career choice despite less perceived
status. Entrepreneurship may take less of a glamorous
image in these regions, which could, in like manner,
reduce its attractiveness.
Entrepreneurial Intentions
Even when individuals have favorable perceptions
of entrepreneurship, they may nonetheless have few
intentions to start businesses. is is the case for many
European countries. Although attitudes and percep-
tions about entrepreneurship are fairly high, this is not
matched by high intentions for starting businesses. A
variety of national characteristics could be underlying
this phenomenon. For example, “red tape” could pres-
ent unfavorable administrative burdens or high costs
to those thinking about starting a business. Addition-
ally, governments characterized as welfare states—
although meaning to protect citizens—may reduce
incentives for entrepreneurship.
function to maintain a particular equilibrium, some-
times preserving special interests or creating resistance
to change. Consequently, cultural and social elements
are oen lasting or slowly evolving qualities.
An entrepreneurial culture may be reinforced by
perceptions like the amount of status society confers
on entrepreneurs and the extent people think being an
entrepreneur is an attractive pursuit. Media can also
reinforce notions about entrepreneurs: for example,
magazines or television shows can highlight entre-
preneurs, or newspaper stories can feature about the
achievements of such individuals. Entrepreneurs as
heroes (or otherwise), and their stories of success (or
failure), can shape a society’s impressions markedly.
Policy makers may even take specific actions to high-
light entrepreneurs and shape cultural perceptions.
e 2010 survey shows that perceptions about
the attractiveness of entrepreneurship as a career,
the status of entrepreneurs and media attention to-
ward entrepreneurship were all, on average, highest
in the factor-driven countries. ese indicators then
declined generally from factor-driven to efficiency,
and then from efficiency to innovation-driven
economies. However, in both the efficiency-driven
and innovation-driven groups, perceptions about
the status of entrepreneurs were similar, on average.
One explanation for this phenomenon is that the
general population in factor-driven economies per-
ceives entrepreneurship as an escape from a formal
job, even though some of these activities could be
driven by necessity.
Ghana and Saudi Arabia has among the highest
levels of status, career and media perceptions in the
factor-driven group. In the efficiency-driven econo-
mies, Malaysia shows the highest level of media atten-
tion around entrepreneurship, yet one of the lowest
levels of perception about entrepreneurship as a career.
In the innovation-driven group, over 85% of people
in the Netherlands have a positive perception about
entrepreneurship as a career, far above the rest of the
group. At the same time, media attention is just above
average and status perceptions are lower than average.
is is similar to Chile, and may serve as an example
of the prospects for stimulating the public’s attention
about entrepreneurship.
It is notable that most economies in the factor-
driven group are more likely to have the same or
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
22
Activity
Across the sample of 59 economies, we estimate
that some 110 million people between 18–64 years
old were actively engaged in starting a business. An-
other 140 million were running new businesses they
started less than 3½ years earlier. Taken together,
some 250 million were involved in early-stage entre-
preneurial activity.
As Figure 1 shows, GEM measures the partici-
pation of individuals in entrepreneurship activity,
presenting this as a continuous process that in-
cludes nascent entrepreneurs involved in setting
up 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 agoviii. In addition,
GEM assesses the rate and nature of business dis-
continuance. This section reviews these phases,
as well as necessity versus opportunity motives.
Ta bl e 3 shows these activity results. In addition,
these sections provide additional insights on the
industry sector of the businesses, and age and
gender demographics of the entrepreneurs.
Far more individuals in factor-driven economies
(almost 43% on average) intend to start businesses over
the next three years compared to the other economies.
An average of just 23% of people in efficiency-driven
economies expressed this intent, while even fewer
(8%) of those in innovation-driven economies did.
In the factor-driven group, the Sub-Saharan Af-
rican countries had the highest intent, consistent
with their positive perceptions about opportunities
and their belief in their capabilities. Similarly, low
intentions in the MENA countries are consistent
with their views on opportunities and capabilities.
Among the efficiency-driven group, Eastern Euro-
pe an ec on omi es had lo wer th an ave ra ge i nt ent , wi th th e
exception of Macedonia and Montenegro. Latin Amer-
ican countries had higher than average intent, with the
exception of Costa Rica, Argentina and Mexico.
In the innovation-driven economies, Iceland
showed high intent. While both the Republic of Korea
and Japan ha d low perc eptions about opp ortun ities and
capabilities, this was matched with low intent only in
Japan. e Republic of Korea was well above average
on this measure.
2.2
Table 3: Entrepreneurial Activity in the 59 GEM Countries in 2010, by Phase of
Economic Development
Factor-Driven Economies
13.6
28.8
2.1
10.7
8.3
4.8
5.5
6.6
5.9
10.6
31.2
7.9
17.3
11.8
32.4
38.6
7.0
33.9
16.3
12.4
10.5
9.1
9.4
31.3
52.2
10.4
32.6
22.8
19.1
14.0
4.9
24.6
8.4
7.8
5.1
2.7
3.5
22.0
28.2
2.6
17.1
12.3
8.6
18.2
4.5
35.5
6.6
12.2
6.9
4.7
3.9
27.7
23.2
2.0
9.6
12.6
19.9
9.0
3.8
25.7
3.9
7.3
8.1
2.6
3.8
27.4
22.0
5.7
23.5
12.5
36
17
53
37
15
38
42
41
10
50
38
32
32
34
30
57
25
35
28
39
39
39
75
34
24
33
41
38
Nascent
Entrepreneur-
ship Rate
New Business
Ownership
Rate
Total
Early-Stage
Entrepreneur-
ship Activity
(TEA)
Established
Business
Ownership Rate
Discontinuation
of Businesses
Necessity-
Driven (% of
TEA)
Improvement-
Driven
Opportunity
(% of TEA)
Angola
Bolivia
Egypt
Ghana
Guatemala
Iran
Jamaica
Pakistan
Saudi Arabia
Uganda
Vanuatu
West Bank and Gaza Strip
Zambia
Average (unweighted)
Continued
23
Factor-Driven Economies
Nascent
Entrepreneur-
ship Rate
New Business
Ownership
Rate
Total
Early-Stage
Entrepreneur-
ship Activity
(TEA)
Established
Business
Ownership Rate
Discontinuation
of Businesses
Necessity-
Driven (% of
TEA)
Improvement-
Driven
Opportunity
(% of TEA)
Efciency-Driven Economies
Innovation-Driven Economies
7.0
4.1
5.8
11.1
4.6
8.6
10.4
3.8
10.4
4.6
5.6
4.4
1.4
*8
12.0
22.1
3.3
2.1
5.1
4.7
8.9
1.7
3.7
7.8
6.7
3.9
2.3
1.8
2.4
3.7
2.5
2.0
7.4
4.4
3.2
1.3
1.5
1.8
4.0
4.4
1.8
2.2
2.2
2.3
2.0
3.2
4.8
3.0
14.2
7.7
17.5
16.8
14.4
20.6
13.5
5.5
21.3
7.1
9.7
8.0
5.0
1*
14.9
27.2
4.3
3.9
8.9
8.4
15.1
6.1
8.6
11.7
11.7
7.8
3.7
3.8
5.7
5.8
4.2
5.5
10.6
6.8
5.7
2.3
3.3
6.6
7.2
7.7
4.5
4.7
4.3
4.9
5.0
6.4
7.6
5.6
7.4
4.1
11.8
6.1
10.0
12.7
3.6
1.9
11.5
2.6
4.2
3.6
3.6
2*
3.1
6.0
1.1
1.9
3.9
3.8
6.4
4.4
5.1
4.1
5.2
4.0
1.4
2.2
3.4
2.3
1.8
3.5
3.3
2.6
2.6
1.0
1.8
4.8
3.4
3.4
2.8
2.4
2.1
2.6
3.1
3.3
2.8
2.8
12.4
6.6
15.3
6.0
13.8
12.2
4.8
2.9
14.7
5.4
7.6
7.6
7.9
*
7.8
7.2
2.1
2.8
2.1
7.2
8.5
9.0
10.7
7.2
7.6
8.5
2.7
5.6
9.4
2.4
5.7
14.8
7.4
8.6
3.1
3.7
7.4
11.2
9.0
6.7
5.4
4.9
7.7
6.4
8.7
6.4
7.7
7.0
3.8
4.7
5.3
5.6
5.6
5.1
2.0
4.5
7.2
2.9
4.2
3.7
1.9
5.9
7.3
9.2
2.6
0.8
4.8
3.7
2.9
4.1
4.6
3.5
4.4
2.7
2.0
1.7
1.8
2.5
1.5
3.4
3.4
2.3
3.8
1.6
1.5
1.6
1.4
2.6
2.6
1.6
1.9
2.9
2.4
1.8
3.8
2.3
36
47
31
29
42
40
32
32
28
20
27
59
12
1*
37
21
31
32
36
30
14
24
37
26
31
19
10
8
18
25
26
28
7
31
29
13
36
39
8
15
22
16
25
13
14
11
28
20
43
30
46
53
34
41
38
49
45
43
51
23
41
4*
38
47
47
30
31
48
47
48
47
54
42
59
54
54
54
56
48
39
68
33
54
55
47
49
64
74
52
54
42
72
60
43
51
54
Argentina
Bosnia and Herzegovina
Brazil
Chile
China
Colombia
Costa Rica
Croatia
Ecuador
Hungary
Latvia
Macedonia
Malaysia
Mexico
Montenegro
Peru
Romania
Russia
South Africa
Taiwan
Trinidad and Tobago
Tunisia
Turkey
Uruguay
Average (unweighted)
Australia
Belgium
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Israel
Italy
Japan
Republic of Korea
Netherlands
Norway
Portugal
Slovenia
Spain
Sweden
Switzerland
United Kingdom
United States
Average (unweighted)
Source: GEM Adult Population Survey (APS)
Chapter 2 A Global Perspective on Entrepreneurship in 2010
“My decision to start a boutique ad agency, Pepper, came from my incapacity
to tow the line and follow corporate instructions that did not sit well with
my value system, my training and experience. So I could either nd another
company to work with or start my own. I chose to start my own and now in
our sixth year, it looks like we might survive.”
Dennis Ramdeen, Founder of Pepper Advertising and Experiential Marketing,
Trinidad and Tobago
Data is not available
*
GEM Global Report 2010
24
indicator of TEA in a country. It represents dynamic
new firm activity—the extent new businesses are in-
troduced into a national population.
Figure 4 shows TEA rates across the sample of 59
economies, organized into the three economic lev-
els and exhibited within each from lowest to highest
TEA rate. is figure facilitates benchmarking among
economies in similar phases of development. Vertical
bars 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 in
the GEM 2009 survey, a comparison of TEA rates
from 2009 to 2010 shows a mix of increases and
decreases (or no change) across all three economic
groups. While the number of positive and negative
shis was roughly equal in the factor-driven and
efficiency-driven economies, the balance tipped
toward slightly more declines in the innovation-
driven group.
Total Early-Stage Entrepreneurship
Activity (TEA)
GEM defines Total Early-Stage Entrepreneurship
Activity (TEA) as the prevalence rate of individuals in
the working-age population who are actively involved
in business start-ups, either in the phase preceding the
birth of the firm (nascent entrepreneurs), or the phase
spanning 3½ years aer the birth of the firm (owner-
managers of new firms). e cut-off point of 3½ years
has been made on a combination of theoretical and
operational groundsix.
For the purpose of international comparisons,
GEM takes the payment of any wages for more than
three months to anybody (including the founders) as
the “birth event.” Individuals who are actively commit-
ting resources to start a business that they expect to
own themselves, but who have not reached this birth
event are labeled nascent entrepreneurs. e preva-
lence rate of nascent entrepreneurs and new business
owner-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 Confidence Intervals
60%
50%
40%
30%
20%
10%
0%
sr
a
e
Y
46
–
81 neewteB noitalupoP tludA fo egatnecreP
t
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ai
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ar
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a
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F m
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ail
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s
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A
d
n
al
e
c
I
Factor-Driven Economies Innovation-Driven EconomiesEfficiency-Driven Economies
Source: GEM Adult Population Survey (APS)
25
having lower than average TEA rates for efficien-
cy-driven countries, both experienced increases
over last year.
Asian economies in this group reveal a range
of entrepreneurship levels. While Malaysia’s TEA
rate is relatively lower, it has increased from last
year. China, on the other hand, has a high rate of
entrepreneurship (14.4%), yet experienced a mod-
erate decline from 2009. China was able to main-
tain its targeted high GDP growth rate amid the
global downturn in 2009 with a 4 trillion Yuan
economic stimulus. This was mostly distributed
to state-owned enterprises for large projects in
real estate and heavy industries (like construction
and infrastructure). The entrepreneurship sector
could be seen as indirectly benefitting, however,
to the extent these firms can become supply-chain
players or service providers for the large firms, as
well as businesses selling to those receiving wages
from the projects.
Innovation-Driven Economies
The innovation-driven economies contain
the United States and three economies from the
Asia-Pacific region, but are mostly populated by
Western European economies. This latter region,
as a whole, experienced mostly little or nega-
tive changes in TEA from 2009. Greece showed a
substantial decrease in TEA, amid the debt crisis
that permeated the country in the spring of 2010.
A positive change was seen in France, however,
which experienced a jump in entrepreneurship
participation after many years of exhibiting lower
relative TEA rates.
Iceland, Australia and the United States
showed the highest TEA rates in the innovation-
driven category. For Iceland, this comes even after
experiencing a decline from last year. The United
States declined slightly in 2010, following a more
marked drop in 2009.
In Asia, Japan maintained its entrepreneur-
ship rate, while the Republic of Korea faced a
slight decline, although still maintaining a rela-
tively high level of entrepreneurship among its
economic peers.
Factor-Driven Economies
The factor-driven economies show the highest
TEA rates on average, followed by the efficiency-
driven economies. The lowest average rates are
found in the innovation-driven group. The nature
of these differences will be explained more fully in
subsequent sections regarding development levels
and necessity versus opportunity motives.
Within the factor-driven group, the MENA/
South Asia region tends to show lower relative
rates of entrepreneurship. Shifts in activity were
observed in Saudi Arabia, which increased its
entrepreneurship rate from last year, and Egypt,
which exhibited a decline.
Sub-Saharan African countries tended toward
the top of the factor-driven economies on entrepre-
neurship rates. In fact, none of the countries in this
geographic region revealed a decline in rates over
the previous year, and Angola showed an increase.
Interestingly, another country in this region, South
Africa, part of the efficiency-driven group, also ex-
hibited an increase in TEA from 2009.
Vanuatu, a small island of two hundred thou-
sa nd people i n the So uth Pacif ic, s howed the hig h-
est rate of entrepreneurship in this group, with
over half its people engaged in starting or already
running new businesses.
Efciency-Driven Economies
Latin American/Caribbean economies tend to
occupy the highest positions in terms of entrepre-
neurship rates in the efficiency-driven group. All
the efficiency-driven Latin American countries ex-
hibit 10% or higher rates and none show declines
from last year. Peru (27.2%) and Ecuador (21.3%)
not only showed the highest rates of entrepreneur-
ship among all countries in this categor y, but also
exhibited increases in TEA from 2009.
Eastern European countries tend toward rela-
tively low entrepreneurship rates, with the excep-
tion of Montenegro, which has nearly 15% of its
population engaged in early-stage entrepreneur-
ship. Bosnia/Herzegovina and Turkey, although
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
26
comes replaced by transparent and respected legal
and regulatory systems.
Industrialization and economies of scale favor
larger and more established firms that are able to
satisfy the appetites of growing markets, thereby in-
creasing their role in the economy. Accompanying all
this is an expansion of employment capacity, allow-
ing more people to find stable jobs in large industrial
plants. e proportion of necessity-driven entrepre-
neurship declines as a result. At the same time, im-
provements in wealth and the development of basic
requirements (infrastructure, economic stability,
education) enable opportunity-based businesses to
thrive, shiing the nature of entrepreneurship activ-
ity. But the dominance of large firms also leads to an
overall reduction in the number of new businesses.
At the wealthiest societal levels, individuals live
with sophisticated basic requirements and efficiency
enhancers. More importantly, they have access to
entrepreneurial finance, open markets, R&D knowl-
edge and other entrepreneurship-specific framework
conditions. Toward the right-hand side of the figure,
the role played by the entrepreneurship sector may
increase because more individuals can access the
resources necessary to start their own business in
knowledge-intensive environments with abundant
opportunities. is tends to create an upward trend
as GDP rises to its highest levels, thus completing the
U-shape curve.
In countries with low levels of per capita income,
a decrease in the prevalence of early-stage entrepre-
neurship may be a positive one. It could signal great-
er sustainability, especially if this is accompanied by
economic growth and political stability. As such, it
represents a natural evolution in development, as an
economy relies increasingly on established organiza-
tions with scale.
erefore, while low TEA rates, or drops in rates,
may be a cause for concern in some economies, it
could instead mean that the general economic climate
has improved and that job opportunities are increas-
ing. Additionally, it may be accompanied by a shi
toward more promising aspirations for growth, inno-
vation and international trade, even while the number
of entrep rene urs de clin es. In this respe ct, eac h of th ese
entrepreneurs contributes more markedly to employ-
ment growth and national comparative advantage.
Entrepreneurship Relative to
Development Levels
As Figure 4 shows, average TEA rates are highest
in the factor-driven economies. Figure 5 plots these
rates against GDP per capita, adjusted for purchas-
ing power parity. As this figure shows, TEA rates are
highest for the poorest countries, declining rapidly
and then leveling out in the efficiency stage, with low
levels continuing into the innovation stage until they
turn upward at increasing levels of wealth.
One key reason for this trend can be found in
differences between the level of necessity and op-
portunity-based entrepreneurship at particular GDP
levels. e section that follows provides a more in-
depth examination of this phenomenon. We provide
a brief description here, however, in order to include
this in the discussion of the relationship between
TEA and development levels.
Necessity entrepreneurs are those who have en-
tered self-employment because they have no better
options for work; in other words, they start business-
es to generate income for themselves and their fami-
lies. Opportunity entrepreneurs, on the other hand,
have chosen to start businesses out of opportunity,
even when they have other employment possibili-
ties. GEM further queries these individuals on their
motives: whether they seek to maintain or increase
their income, or whether they desire independence
in their work.
Necessity-driven (mainly self-employment)
activity tends to be higher as a proportion of TEA
in less developed economies. Agricultural and ex-
tractive sectors, as well as consumer-based local
businesses, dominate these regions. ere is more
demand for jobs here than employers can provide.
Consequently, many people must create their own
jobs to generate income. Small businesses, and lots of
them, are prevalent at this development level.
With further development comes macroeco-
nomic and political stability and the growth of
productive sectors. Accompanying this is the
emergence of strong institutions that organize and
govern the functions of society and its economy.
A shift begins to occurs, where a previous reliance
on commonly accepted norms of behavior be-
27
stock of business owners, tend to appear above the
trend line.
While development tends to be associated with
a particular level of sophistication and attention to
various framework conditions, economies also have
their own cultures and policies, among other sources
of uniqueness. ese elements might be worth con-
sidering when counterintuitive or contrasting results
are revealed.
Further inspection reveals that the dispersion of
TEA estimates around the line of best fit in Figure 5
is not just a function of differences in economic de-
velopment (or welfare) but also other factors. For
example, Eastern European countries have been
experiencing falling populations and a low stock of
business owner-managers as a legacy of commu-
nism. eir TEA point estimates are clustered below
the 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
yt
i
vi
t
c
A lai
ru
ene
rp
ertn
E
egatS-
ylraE n
i d
ev
lovnI no
i
talupo
P 4
6–81
fo ega
tn
ecreP
GH
ZM
UG AO
PE
EC
CO
GT
BR CL
ME
AR
UY
MX
LV
HU
CN
CR
IR
JM
PK
EG
TW
BA
TN
ZA
MK TR
MY
RO RU
HR
PT SI
IL GR FR FI
UK
IS
AU NL
IE US
SW
SE
ES
JP
IT
DE
BE DK
KR
SA
TT
R = 0.51
2
GDP per Capita in Purchasing Power Parities ($), in Thousands
Figure 5 : Total Early-Stage Entrepreneurial Activity Rates and Per Capita GDP 20101
0 10 20 30 40 50 60
NO
Chapter 2 A Global Perspective on Entrepreneurship in 2010
1Bolivia and Vanuatu a not showed in this fig ure, because their TEA rates are outsiders
Angola
Argentina
Australia
Bosnia and Herzegovina
Belgium
Brazil
Chile
China
Colombia
Costa Rica
Germany
Denmark
Ecuador
Egypt
AO
AR
AU
BA
BE
BR
CL
CN
CO
CR
DE
DK
EC
EG
Spain
Finland
France
Ghana
Greece
Guatemala
Croatia
Hungary
Ireland
Israel
Iran
Iceland
Italy
Jamaica
ES
FI
FR
GH
GR
GT
HR
HU
IE
IL
IR
IS
IT
JM
Japan
Korea
Latvia
Montenegro
Macedonia
Mexico
Malaysia
Netherlands
Norway
Peru
Pakistan
Portugal
Romania
Russia
JP
KR
LV
ME
MK
MX
MY
NL
NO
PE
PK
PT
RO
RU
SA
SE
SI
SW
TN
TR
TT
TW
UG
UK
US
UY
ZA
ZM
Saudi Arabia
Sweden
Slovenia
Switzerland
Tunisia
Turkey
Trinidad and Tobago
Taiwan
Uganda
United Kingdom
United States
Uruguay
South Africa
Zambia
GDP Per Capita in Purchasing Power Parities ($), in Thousands
GEM Global Report 2010
28
Figure 6: Necessity-Based Early-Stage Entrepreneurial Activity and Per Capita
GDP 2010
Source: GEM Adult Population Survey (APS) and IMF World Economic Outlook Database
20
18
16
14
12
10
8
6
4
2
0
81
fo ega
tn
ecreP – ytisseceN yb ytivitcA lairuene
rp
ertnE egatS-yl
ra
E ni devlovnI
no
ita
lupo
P 46
0 10 20 30 40 50 60
IT
ES UK
FI
FR
BE DK
JP
GR
IL
KR
TT
Angola
Argentina
Australia
Bosnia and Herzegovina
Belgium
Bolivia
Brazil
Chile
China
Colombia
Costa Rica
Germany
Denmark
Ecuador
Egypt
AO
AR
AU
BA
BE
BO
BR
CL
CN
CO
CR
DE
DK
EC
EG
Spain
Finland
France
Ghana
Greece
Guatemala
Croatia
Hungary
Ireland
Israel
Iran
Iceland
Italy
Jamaica
Japan
ES
FI
FR
GH
GR
GT
HR
HU
IE
IL
IR
IS
IT
JM
JP
Korea
Latvia
Montenegro
Macedonia
Mexico
Malaysia
Netherlands
Norway
Peru
Pakistan
Portugal
Romania
Russia
Saudi Arabia
Sweden
Slovenia
Switzerland
Tunisia
Turkey
Trinidad and Tobago
Taiwan
Uganda
United Kingdom
United States
Uruguay
Vanuatu
South Africa
Zambia
KR
LV
ME
MK
MX
MY
NL
NO
PE
PK
PT
RO
RU
SA
SE
SI
SW
TN
TR
TT
TW
UG
UK
US
UY
VU
ZA
ZM
VU
R = 0.62
2
GDP Per Capita in Purchasing Power Parities ($), in Thousands
UG
GH
ZM
AO
CO
BO CN
BR ME
AR
CL
MK
CR
IR
JM
BC
PE
PK EG
GT TW
TN
MX
RO RU
HU
SA PT SI
HR
LV
TR
UY
ZA
BA
MY IS
SE NL
AU
IE US
SW
NO
DE
an increase in GDP, and then gradually continue
on a more moderate decline. When compared with
Figure 6, it is apparent that both the more gradual
slope 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. is plot reveals that the steep-
ness of the le-hand side of the curve in Figure 5 is
due to very high levels of necessity-based entrepre-
neurship at the lowest GDP per capita levels. Along
the horizontal axis, the levels drop very rapidly with
29
styles, while many people in Iceland wish to im-
prove their lifestyles and see entrepreneurship as a
means to do this.
Also notable in the innovation-driven group are
the high levels of improvement-driven motivation
in the Netherlands, Sweden, Denmark and Iceland.
is indicates a feature that may be common to the
Nordic region of Europe—entrepreneurs motivated
to increase their incomes or independence. is phe-
nomenon could be linked to the degree of general
wealth (paired with relatively low income inequali-
ties) and social security in Nordic countries. Addi-
tionally, these four countries score high on the Ease
of Doing Business Reportxi, all falling within the top
15 countries out of 183. Ireland, on the other hand,
had almost equal proportions of necessity and op-
portunity motives.
An analysis of framework conditions can help
explain the higher level of opportunity-based en-
trepreneurship in the innovation-based economies.
Referring back to Figure 3, consider the entrepre-
neurship framework condition relating to commer-
cial and legal infrastructure. Figure 7 shows a plot of
Rule of Law against the proportion of entrepreneurs
with improvement-driven opportunity motives.
e “Rule of Law” index, published by the World
Bankxii, includes several indicators that measure
the extent to which people have confidence in and
abide by the rules of society. ese include percep-
tions of the incidence of crime, the effectiveness and
predictability of the judiciary and the enforceability
of contracts. Together, these indicators measure the
success of a society in developing an environment in
which fair and predictable rules form the basis for
economic and social interactions and the extent to
which property rights are protected.
e positive slope reinforces the idea that en-
trepreneurship can be encouraged by ensuring
individuals feel secure that, among other things,
their contracts can be enforced and their intellec-
tual property can be protected. With fewer indi-
viduals being forced into entrepreneurship out of
necessity, these economies need to promote a posi-
tive environment that encourages people to start
businesses when they otherwise have a choice of
options for employment.
Necessity Versus Opportunity
is section examines the proportion of entrepre-
neurs in an economy that have identified their mo-
tives as either based on necessity or improvement-
driven opportunity. Improvement-driven opportunity
refers to those entering entrepreneurship because they
seek independence or to improve (not just maintain)
their income. In other words, it excludes maintaining
income from opportunity motivation.
Saudi Arabia, despite low TEA levels, shows a
pattern similar to Bolivia, with nearly three-fourths
of its activity as improvement-driven opportu-
nity, and the lowest amount of necessity motiva-
tions in this group. On the other hand, Egypt, with
the lowest TEA rate in the group, has the highest
proportion of necessity-driven entrepreneurship,
and among the lowest proportion of improve-
ment-driven opportunity. is indicates there are
relatively few entrepreneurs in both countries, yet
Saudi 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 support
themselves financially.
e highest proportion of necessity-based en-
trepreneurship in the efficiency-driven group can
be found in Macedonia, which also has the lowest
improvement-driven opportunity ratio. is coun-
try saw a significant decrease in entrepreneurship
activity from last year. Both Malaysia and Peru show
relatively low proportions of necessity-based activity,
yet they exhibit contrasting TEA levels, with Malay-
sia on the low side and Peru with the highest TEA
in this group. is illustrates simply a lack of need-
based entrepreneurship in both countries. In Peru,
the high level of entrepreneurship is associated with
choice regarding lifestyle improvement.
In the innovation-driven group, several econo-
mi es sh ow a ve ry la rge p ropor ti on of impr ovem en t-
driven opportunity relative to necessity entrepre-
neurship. Interestingly, both the highest (Iceland)
and lowest (Italy) TEA countries in this group ex-
hibited some of the largest spreads between these
two motivation factors. It could be said that few
people in Italy choose to become entrepreneurs
and only because they want to improve their life-
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
30
Figure 7: Correlation Between Rule of Law and the Degree of Improvement-Driven
Opportunity motivation for 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 = 0.39
2
Rule of Law Indicator
nature. ey can play a key role in entrepreneurship
activity where poorly developed transportation and
commercial infrastructure exists.
e MENA/South Asian and Sub-Saharan African
countries in the sample are primarily in the factor-
driven stage of development. So it is no surprise that
these economies both have high levels of early-stage
entrepreneurs in extractive businesses, as Figure 9 il-
lustrates. ese geographic regions have high levels
of natural resources, which enable the extracting
sector to thrive. e two differ, however, in that the
MENA group dominates the transforming sector,
while Sub-Saharan Africa is the most prevalent geo-
graphic region in the consumer-oriented sector.
e Eastern European, Latin American and Asian
economies span two or three economic groups. Look-
Sector
Figure 8 and Figure 9 show the distribution of
early-stage entrepreneurship activity in four main in-
dustr y sectors, with regard to both economic develop-
ment phase and geographic region. Figure 8 confirms
that extraction businesses (farming, forestry, fishing
and mining) are more dominant in factor-driven
economies. Business services are more common in
the innovation-driven economies. On the other hand,
no group dominates the transforming business sec-
tor (manufacturing and construction), which exhibits
equal prevalence across all three economic levels.
Both factor-driven and efficiency-driven econo-
mies are strongly weighted toward the consum-
er-oriented sector. ese businesses tend to have
relatively low resource needs and are oen local in
31
e United States and Western Europe, all inno-
vation-driven economies, not surprisingly dominate
the business services sector. is sector tends to rely
on highly educated human capital, which is more
widely available in these regions, and supplied by a
well-established higher education system.
ing across the sectors, none of t hese global re gions has a
majority presence in any one category. Looking within
sectors, both Latin America and Asia Pacific have most
of 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 of Total Early-Stage Entrepreneurship Activity by Phase
of Economic Development
Factor-Driven Economies
Innovation-Driven Economies
Efciency-Driven Economies
0% 20%
Extractive Transforming Business Services Consumer-Oriented
Source: GEM Adult Population Survey (APS)
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
32
Figure 9: Sector Distribution of Total Early-Stage Entrepreneurship Activity by
Geographic Region
Source: GEM Adult Population Survey (APS)
Latin America and Carribean
Sub-Saharan Africa
Asia Pacic
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 of
early-stage entrepreneurs by age for the three economic
groups and the six geographic regions. Figure 10 illus-
trates that in each of the three economies, the 25–34
age group contains a higher percentage of early-stage
entrepreneurs than the others, followed by the 35–44
age group, and then the 45–54 age group. Less preva-
lent is the youngest (18–24) age group and, even less
so, the oldest age group (55–64).
All three of the economic groups thus show bell-
shaped distributions that are steeper on the le. Yet
there are some unique patterns. Innovation-driven
economies have greater concentrations of entrepre-
neurs in the middle age groups, 25 through 54 years
old, showing a steeper trail off on both sides. is is
likely due to a higher proportion of people in tertiary
Age Distribution
A society can benefit from entrepreneurs of all
ages. At one extreme, young people have fresh ideas,
are “born-digitals” with perhaps a different outlook
and more education than their parents. ey are less
likely to have responsibilities like mortgages and fami-
lies, which can otherwise make them more cautious. At
the other end, older people have experience, contacts
and capital built over long careers. Moreover, the 50+
age group in many economies is now familiar with in-
formation and communication technologies, making
home-based start-ups an interesting option for this
group. While entrepreneurship is oen more preva-
lent in the age groups in between, policy makers might
look to harness the entrepreneurial potential on either
side of these seemingly more likely prospects.
“The development of our country depends on the achievements of young
entrepreneurs. We should encourage our young people to choose
entrepreneurship as a career path. Therefore, we need to create awareness about
entrepreneurship and increase the number of role models in Turkey.”
Ali Sabanci, Chairman, TOBB Young Entrepreneurs Board, Turkey
33
e Asia Pacific region and the United States/
Western Europe had the highest percentages of the
second most popular age group (35–44 year olds)
compared to the others. In these regions, individuals
tend to spend a longer time period receiving their
educations. In addition, with their high levels of edu-
cation, they are more likely to work for established
companies or in government jobs before becoming
entrepreneurs. e United States/Western European
region also had the highest percentage of the second
oldest group (45–54 year olds), again demonstrating
the popularity of entrepreneurship among a middle-
age population.
Eastern Europe showed a unique pattern in its
emphasis on an overall greater proportion of young
entrepreneurs than the other geographic areas. is
region had the highest relative percentages of the
two youngest age groups and the lowest proportion
of the two oldest groups. Perhaps the entrepreneur-
ial activities of the youngest generations in these
countries can be explained by the different socio-
economic system in which they have been raised.
education in younger age groups and better retirement
provisions for older people. e factor-driven econo-
mies have more entrepreneurs in the younger (18–24)
and older (55–64) extremes compared to the other
economies, thereby exhibiting a flatter bell shape.
Looking at Figure 11, the geographic regions re-
veal similar patterns of relative prevalence across the
age categories. is suggests that the age distribution
of an economy is an important determinant of early-
stage entrepreneurship activity across age groups.
Several of the geographic regions reveal some unique
characteristics, however.
In the Asia Pacific region, the prevalence rate of the
oldest group is nearly identical to the youngest group,
in contrast to the other regions, which show a higher
level of younger than older entrepreneurs. Some Asian
economies are experiencing a decline in their youth
demographic. In Japan, for example, the middle age
group (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 of Entrepreneurs by Phase of Economic Development
Source: GEM Adult Population Survey (APS)
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 Economies
Efciency-Driven Economies
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
34
Figure 11: Age Distribution of Entrepreneurs by Geographic Region
Source: GEM Adult Population Survey (APS)
35%
30%
25%
20%
15%
10%
5%
0%
Percentage of Adult Population Between 18–64 Years
Latin America
and Carribean Sub–Saharan
Africa Eastern EuropeMiddle East and
North Africa /
South Asia
Asia Pacic U.S.A. and
Western Europe
18–24 Years 25–34 Years 35–44 Years 45–54 Years 55–64 Years
eration and willingness of stakeholders like investors
and creditors, employees, suppliers and customers.
When these factors act as impediments, society miss-
es an opportunity to gain from the entrepreneurial
energy of half its population.
Figure 12 shows the level of female and male par-
ticipation in early-stage entrepreneurship, ranked by
the percentage of women involved in TEA within the
three economic groups. e level of women partici-
pation is somewhat similar to TEA levels—that is, if
TEA is very low in an economy, there are also fewer
women entrepreneurs in an absolute sense. But some
economies show relatively higher or lower percentages
of women entrepreneurs relative to men. For these lat-
ter economies, entrepreneurship activity could be en-
hanced overall by stimulating women to become more
active in entrepreneurship.
Women’s participation in entrepreneurship relative
to men ranges from a ratio of 20:100 in the Republic of
Korea to 120:100 in Ghana. Across the three development
levels, the factor-driven and efficiency-driven groups are
similar on average, but the innovation-driven group has
a lower average proportion of women entrepreneurs.
Gender Differences
Women can enter entrepreneurship for many of
the same reasons as men: to support themselves and
their families, to enrich their lives with careers and
financial independence and so on. Yet there may be
special considerations for female involvement in start-
ing businesses. is is important to examine in light of
the fact that women’s participation in entrepreneur-
ship varies significantly across economies, but is near-
ly always less than that of men.
Societies differ in their perceptions and customs
about women working, and working in business.
Overall levels of education and development can in-
fluence societal beliefs, with a higher degree of either
generally associated with greater acceptance about
women’s careers. In some cases, however, women en-
ter entrepreneurship, regardless of perceptions, simply
because their families need their incomes.
In addition, social acceptance around placing chil-
dren in the care of others while pursuing a career, and
the cost and availabilit y of childc are can we igh heavily.
Women entrepreneurs also need to rely on the coop-
35
with lower than average female participation with a
60 to 100 ratio.
Looking at the Asia Pacific region, Australia shows
the greatest number of women entrepreneurs among
the innovation-driven economies, with men and wom-
en participating equally in this activity. Malaysia has a
low TEA but a very high relative level of female partici-
pation, with almost equal numbers of women and men
entrepreneurs. Taiwan, on the other hand, ranks below
average, with a 60 to 100 ratio. Two other Asian countries
in the innovation-driven group, the Republic of Korea
and Japan, are among the lowest ranked for females.
e highest ratios of female participation in West-
ern Europe are in Belgium and Switzerland, with ratios
around 80 to 100. e United States also has many
women entrepreneurs, with a ratio of about 85 to 100.
In the factor-driven economies, the lowest levels
and ratios of women participation can be found in the
MENA countries, where for every woman entrepre-
neur, there are about two to four men. e highest ra-
tio can be seen in the Sub-Saharan African countries,
where there is more or less equal participation, with
Zambia having slightly fewer women and Ghana hav-
ing more women than men on average.
In the efficiency-driven economies, Eastern Eu-
ropean countries occupy the lower levels and ratios
for women’s participation, with the lowest exhibited
in Turkey at a ratio of about 28 women for every 100
men. An exception can be found in Russia, which has
an 80 to 100 ratio. Latin American countries tend to-
ward higher levels of participation, with Costa Rica
and Mexico reporting almost equal participation by
gender. Uruguay is the only Latin American country
Figure 12: GEM Economies Ranked by Level of Female Participation in Total
Early-Stage Entrepreneurship Activity (TEA) by Economic Group, 2010
Source: GEM Adult Population Survey (APS)
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
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
Male Female
Chapter 2 A Global Perspective on Entrepreneurship in 2010
“Women are very resilient, we have the ability to carry on in adversity ... we
have proved it during the reconstruction after the earthquake.”
Benedicta Aravena and Guacolda Saavedra, Centro Social Quidell, Chile
GEM Global Report 2010
36
products that can create new value, or hindering re-
sponses to shis in the market. Ideally, an economy
should have some turnover of firms, where start-
ups introduce new ideas into their environments,
replacing, in part, firms whose businesses have lost
their relevance.
e 2010 results show that the rate of estab-
lished business ownership declines with greater
economic wealth (see Figure 13). e degree of de-
cline is not as great as it is with TEA, however. e
most distinct characteristic among the economic
groupings is that established business ownership
tends to outpace the TEA level as GDP per capita
increases. None of the factor-driven economies had
a rate of established business ownership greater
than the TEA rate, while all but four of the inno-
vation-driven countries had equal or greater estab-
lished business rates. is could reflect increasing
stability and/or sustainability of business activities
as GDP per capita increases.
Established Business Rates
Business owners who have paid salaries and wages
for more than 42 months are classified as established
business owners. eir businesses have survived the
liability of newness—the period aer founding where
new businesses are at a disadvantage relative to estab-
lished firms. is is generally due to their lack of both
internal efficiency and external legitimacy, which con-
strains their ability to form relationships and access
resources in their environments.
High rates of established business ownership
may indicate positive conditions for firm sur-
vival, reflecting a greater amount of stability and
economically sustainable businesses. On the other
hand, it may signal a low level of dynamism, partic-
ularly if a high rate of established entrepreneurship
is combined with a low rate of early-stage activity.
e industry environment may suffer from a lack of
competitiveness—slowing the introduction of new
Figure 13: Established Entrepreneurial Activity for 59 Economies in 2010, by Phase
of Economic Development, Showing 95 Percent Confidence Intervals
Source: GEM Adult Population Survey (APS)
40%
35%
30%
25%
20%
15%
10%
5%
0%
Percentage of Adult Population Between
18–64 Years
West Bank and Gaza Strip
Saudi Arabia
Egypt
Pakistan
Guatemala
Jamaica
Angola
Zambia
Iran
Bolivia
Vanuatu
Uganda
Ghana
South Africa
Romania
Russia
Croatia
Costa Rica
Hungary
Chile
Bosnia and Herzegovina
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
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
37
trepreneurs. e highest established business rate in
this group could be found in Greece, which had an
average TEA level. France had the lowest established
business rate, which was outpaced by an above aver-
age TEA rate that had jumped significantly from last
year. At least some of this can be explained by the
extent to which agriculture dominates the economy
in Greece, and the historic domination of the econo-
my by state-directed big business in France. Iceland,
with the highest TEA rate in this group, had an es-
tablished entrepreneurship rate below its TEA.
e data suggests there may be two different
concerns relative to new and established busi-
nesses: (1) the overall rate of business ownership is
low, whether new or established, or (2) conditions
favor one over the other. Advances in economic
development require business activities exhibiting
both dynamism and stability. Dynamism ensures a
continual renewal of ideas and value in a society,
while stability allows those with the most promise
to survive and grow.
Business Discontinuance
As new businesses emerge to introduce novel
ideas into their economies, those that no longer cre-
ate value for their stakeholders would be expected
to close. ose individuals selling or closing their
businesses may once again benefit their societies by
re-entering the entrepreneurship process. Recog-
nizing the importance of this measure, GEM tracks
the number of individuals who have discontinued a
business in the last 12 months. Discontinuance may
be considered along with TEA and established busi-
nesses as a component of entrepreneurial dynamism
in an economy.
In the factor-driven group, discontinuance rough-
ly follows TEA rates in a number of the economies.
For example, many of the MENA countries have both
low TEA rates and fewer individuals discontinuing
their businesses. On the other end, the sub-Saharan
African countries have both high TEA and business
discontinuance. Exceptions can be seen in the two
highest TEA economies, Bolivia and Vanuatu, where
there is a wide difference between starts and stops.
Figure 14 demonstrates these patterns, revealing very
high levels of discontinuation at the lowest levels of
GDP per capita. Similar behavior can be observed in
necessity-motivated entrepreneurship (see Figure 6).
While start-ups are comparatively frequent in
factor-driven economies, these businesses could be
based on less sustainable principles. Or perhaps en-
trepreneurs simply fall victim to the harsh business
conditions in their environments. Nevertheless, this
implies the need for caution in forming impressions
about the contribution of entrepreneurship in less
developed economies. Although the rate of business
starts-ups is very high, these businesses are prone to
short life expectancies. What may actually be viewed
are a lot of start-up attempts rather than the creation
of longer term potential. It also suggests to policy
makers in these regions that the problem lies less in
getting people to the starting gate, and more with
equipping them to stay in the race.
Some variation can be observed in the factor-
driven countries, however. e MENA countries, Ja-
maica and Guatemala (in Latin America), had both
TEA and established business rates that were lower
than average for the group. e Sub-Saharan African
countries had high TEA rates, with divided results
for established businesses. Uganda and Ghana had
the highest established business rates in the factor-
driven group. Angola and Zambia, however, were be-
low average on the measure.
In the efficiency-driven group, the Eastern Europe-
an countries with the lowest TEA rates had even lower
established business rates (Russia, Romania, Croatia,
Hungary, Bosnia-Herzegovina and Macedonia). How-
ever, two countries from other regions, Malaysia and
Tunisia, despite having low TEA levels, had higher than
average established business levels. ese differences
may be rooted in cultural and historical backgrounds,
as well as the socio-economic systems. Eastern Europe
does not have many years of experience with private
business ownership, for example. In contrast, Malaysia
has a culturally diverse economy with a long history of
immigrant entrepreneurs.
Latin American countries in the efficiency-driv-
en group showed opposing characteristics: Brazil
had the highest level of established businesses in this
economic group. Mexico, on the other hand, revealed
an almost non-existent established entrepreneurship
sector. Peru also had a low established business rate,
despite its high TEA rate.
In the innovation-driven group, most of the
economies had more established than start-up en-
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
38
Figure 14: Discontinuations of Entrepreneurial Activity and Per Capita GDP 2010
Source: GEM Adult Population Survey (APS) and IMF World Economic Outlook Database
est discontinuance rate among the innovation-
driven economies.
Survey respondents who had discontinued a
business in the previous 12 months were asked to
give the main reason for doing so. Financial dif-
ficulties—unprofitable businesses and problems
getting finance—were mentioned most oen as the
reason for discontinuing a business. Factor-driven
and efficiency-driven economies reported the
highest proportion of financial difficulties. Also, as
Figure 15 points out, financial difficulties leading
In the efficiency-driven countries, the largest
gaps between starts and stops can be observed in
the high TEA economies, primarily in the Latin
American countries. This reflects a reduction in
the churn rate of new business owners to discon-
tinuances, which is also particularly noticeable
among the innovation-driven economies. Iceland,
Australia and the Netherlands have both high TEA
rates and high gaps between starts and stops, with
the Netherlands having the lowest discontinuance
rate in the group. In contrast, the United States, al-
though having a high TEA 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 = 0.58
2
GDP Per Capita in Purchasing Power Parities ($), in Thousands
39
Figure 15: Reasons for Business Discontinuance by Economic Phase, 2008–2010
Source: GEM Adult Population Survey (APS)
Spain, Italy, Republic of Korea and Ireland. “e
opportunity to sell” was mentioned more oen in
innovation-driven economies than the others, even
though this proportion decreased in comparison to
2009. Generally, these economies have well-developed
mechanisms for allowing businesses to change hands
or for founders to exit through mergers, acquisitions
or public markets.
In factor-driven economies, almost all the non-
financial discontinuations are for personal reasons.
ese are likely due to such factors as illness, bereave-
ment, civil unrest and other reasons associated with
relatively unfavorable basic requirements.
to business discontinuation have risen in all three
economic groups in 2010.
Financial difficulties, both in absolute terms and
in proportion to all discontinuations, remain low-
est in the innovation-driven group. ere are fewer
problems raising finance in these countries, where
entrepreneurial finance (an entrepreneurship frame-
work condition) is generally more developed. Large
variations exist, however, within this group. In France,
the Netherlands and Finland, about one out of three
individuals with discontinued businesses mentioned
financial problems, whereas around two out of three
identified this reason for discontinuing in Greece,
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Retirement
Problems Getting
Finance
Incident
Opportunity to Sell
Exit Planned in
Advance
Other Job or Busi-
ness Opportunity
Personal Reasons
Business Not Protable
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
2008 2008 20082009 2009 20092010 2010 2010
Chapter 2 A Global Perspective on Entrepreneurship in 2010
“The recession in 1997 forced us to close down our plastic company. But soon
we were blessed with the idea of running a business of providing services to
other 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 with
pride before we dare to try”.
Mr. Kevin Koo, Co-Founder, Koo Chin Nam & Co., Malaysia
GEM Global Report 2010
40
innovation-driven economies report similar propor-
tions of job creation expectations in the moderate cat-
egory (29% and 28%, respectively), but there is large
variation among the economies within each group.
For higher job expectations the efficiency-driven and
innovation-driven economies are also comparable:
an average of 7.1% in the efficiency-driven group and
7.8% in the innovation-driven group expect to create
20 or more jobs (see Figure 16).
Figure 17 compares growth expectations for na-
scent entrepreneurs and owner-managers of new
firms. Although there are some differences in growth
expectations between those just starting businesses
and those already running them, most economies
exhibit similar rates. In some economies, the nascent
entrepreneurs have higher growth expectations. It
may be that those starting businesses in these econ-
omies are more optimistic, or perhaps the owner-
managers of new firms tend to be more realistic.
Dramatic differences can also be seen across the
geographic regions. A group of countries in Eastern
Europe—Croatia, Montenegro, Latvia and Turkey—
have a high proportion of individuals anticipating
moderate (five 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 of high
expectation entrepreneurship at both moderate and
high levels. is is particularly important because
these countries have low TEA levels. With a greater
percentage of this activity involving high growth, a
larger contribution to job creation is possible.
On the other hand, two regions—Latin Ameri-
ca/Caribbean and Sub-Saharan Africa—have fewer
growth expectations in the five-plus and the 20-plus
categories. For some of the Latin American coun-
tries, this comes despite high TEA rates. For exam-
ple, Ecuador has among the highest TEA rates in the
efficiency-driven group, yet has the lowest propor-
tion of moderate growth expectations.
In the innovation-driven group, the two lowest TEA
economies, Italy and Japan, have among the highest
moderate growth expectations, boosting overall job cre-
ation possibilities. Israel, with a moderate TEA rate, has
high proportions of both moderate and high-growth
expectations. Especially notable is Iceland, which has
the highest TEA rate, but also the greatest proportion of
moderate and high job creation expectations.
2.3
Aspirations
Entrepreneurs differ in the variety and level of
aspirations they have for their businesses. ey hold
particular beliefs or ambitions about the growth pros-
pects for their ventures. In addition, they introduce
products or services exhibiting a range of innovative-
ness: a level of newness in the product itself, newness
to the market and the extent there are no competing
alternatives for their offerings. Entrepreneurs also vary
to the extent they reach into international markets
with their products and services. With these ambi-
tions, entrepreneurs have the potential to significantly
impact the employment growth and comparative ad-
vantage of their economies. For this section, data were
combined for the years 2008–2010 xiii.
Growth Expectations
GEM asks all identified early-stage entrepreneurs
how many employees they have at the time of the
survey and how many they expect to have (other
than the owners) within five years’ time. e differ-
ence represents their growth expectations. Almost
55% of all those starting businesses expect to create
one to five jobs. However, only 9% of all start-up at-
tempts expect to create 20 or more jobs, illustrating
the lower prevalence of high growth projections.
Still, there are an estimated 63 million people in the
59 economies expecting to hire at least five employ-
ees over the next five years, and 27 million of these
individuals anticipated hiring twenty or more em-
ployees in five years, illustrating the contribution of
entrepreneurship to job growth across the globe.
High-growth entrepreneurs, also known as ‘ga-
zelles’ (a term popularized by U.S. economist David
Birchxiv), receive high attention from policy makers
because their firms contribute a disproportionate
share of all new jobs created by new firmsxv. In fact,
some studies show that entrepreneurial aspirations
for growth are likely to lead to actual growthxvi. is
implies that efforts aimed at increasing growth aspira-
tions and abilities can translate into concrete benefits.
Looking across the three economic groups, the fac-
tor-driven economies have a generally lower propor-
tion of high expectation entrepreneurs, with an aver-
age of 21% expecting to create five or more jobs in five
years (moderate growth expectations), and only 4.6%
expecting to create 20 or more jobs (high-growth ex-
pectations). e efficiency-driven economies and the
41
Figure 16: Job Growth Expectations for Early-Stage Entrepreneurship Activity, 2008–2010
Figure 17: Differences in Job Growth Expectations Between Nascent Entrepreneurs
and Owner-Managers in New Firms, by Economic Stage of Development and
Country, 2008–2010
Source: GEM Adult Population Survey (APS)
Percentage of Early-Stage Entrepreneurs
80%
70%
60%
50%
40%
30%
20%
10%
0%
Vanuatu
India
Jamaica
Zambia
Bolivia
Uganda
West Bank and Gaza Strip
Ghana
Bosnia and Herzegovina
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
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
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
Bosnia and Herzegovina
Venezuela
Uganda
Bolivia
West Bank and Gaza Strip
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
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
Chapter 2 A Global Perspective on Entrepreneurship in 2010
Percentage Expecting to Grow with at Least Five Employees in Five Years
GEM Global Report 2010
42
is advised: these measures assume that the availability
of new products and services, and the strength of com-
petition, are evenly distributed throughout the world.
By m akin g comp aris ons with in group s at si mila r dev el-
opment levels, we control to some extent for differences
in product availability and competitive intensity. But it
is important to recognize that some economies score
high on these indices merely because they have rela-
tively few new products and low competition.
Two MENA countries, Saudi Arabia and Algeria,
along with Vanuatu have the greatest amount of both
product/market and industry newness in the factor-
driven group. In the efficiency-driven group, two Latin
American countries, Chile and Peru, show the highest
levels of innovation on both measures. e innovation-
driven group shows fewer distinct differences on this
measure, with Iceland among the economies rated
higher on both strong and weak measures of product/
market and industry newness.
An examination of innovativeness by business
stage shows that both new and nascent entrepreneurs
in many economies rate their products similarly.
Prime examples of this can be seen in Saudi Arabia,
Ch ile , Per u, Me xic o, Urug uay, C hin a, Den mark, Mon -
tenegro and Turkey. Neither geographic nor economic
level can explain this pattern, since they come from a
variety of regions and development stages.
In other economies, nascent entrepreneurs rated in-
novativeness at twice the level that new entrepreneurs
did, again crossing multiple economic and geographic
groups (Trinidad and Tobago, Jamaica, Brazil, Venezu-
ela, West Bank and Gaza, United States, United King-
dom, Ghana, Uganda). Nascent entrepreneurs in these
countries are really rating their expected level of inno-
vativeness, since they are in the process of starting their
bus iness es. us, it could be surmise d that nasc ent ent re-
preneurs in these economies are overly optimistic, and
that the actual level of innovativeness, once they start, is
not as high as they believed in the early stages. Interest-
ingly, these economies show low overall levels of innova-
tiveness compared to their economic counterparts, sug-
gesting a need to understand why this gap exists.
Innovation
Innovation and entrepreneurship are closely con-
nected concepts. Joseph Schumpeterxvii argued that
entrepreneurs disrupt the market equilibrium by in-
troducing new product-market combinations into a
market, teaching customers to want new things and
driving out less productive firms as their innovations
advance the production frontier. e result is higher
productivity and economic growth.
While Schumpeter portrays more radical change,
William Baumolxviii argues that entrepreneurs may
start businesses that are not very innovative, and that
innovations may not necessarily result in new busi-
nesses. But as Peter Druckerxix explains, the role of
entrepreneurs is to search for, respond to and exploit
change. e extent and nature of this change, and like-
wise innovation, can vary considerably.
GEM assesses innovation in entrepreneurial busi-
nesses by asking entrepreneurs to rate the newness
of their current products or services and the level of
newness this represents for their customers. ese two
measures are combined into a single measure of prod-
uct/market newness. Additionally, each entrepreneur is
asked to rate industry newness, in terms of the degree
of competition the business faces: specifically, whether
they perceive there are “many”, “few” or “no other busi-
nesses” offering similar products or services.
Figure 18 shows ratings from 54 economies on
product/market novelty and industry newness. e first,
and stronger, measure represents both product/market
newness and industry newness. In essence, this index
measures the percentage of early-stage entrepreneurs
with current products or services they consider novel
and unfamiliar to some or all customers, and that they
also believe are offered by few or no other businesses.
e second, weaker measure indicates either product/
market novelty or competitive uniqueness.
Figure 18 ranks economies within each economic
group based on the relative prevalence of innovative-
ness according to the weaker measure. A note of caution
“Innovation is more important than ever today. With fewer customers available
you have to be the best to earn their business. Ideapaint has led the market with
the best in class dry-erase product. We made the wise decision of committing
to 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 only
remain #1 but also take market share from our competitors.”
John Goscha, Founder of IdeaPaint, USA.
43
the years 2008—2010. e economies are grouped in
the three phases of development, ranked within these
groups from low to high based on having at least some
international customers.
e factor-driven economies have, on average, the
lowest level of international customers in both the “at
least some” and “at least 25%” categories. As the review
of industry sectors reveals, more entrepreneurs in the
factor-driven group participate in consumer-oriented
sectors. ese tend to be local businesses. In addition,
broader market reaches could be impeded by frame-
work conditions such as underdeveloped transportation
and communication infrastructures or restrictive trade
policies. Lebanon, however, is notable for its compara-
tively high level of international participation with short
distances to the country border for all entrepreneurs.
e most distinct pattern in the efficiency-driven
group is the range of international participation lev-
els across these economies. For example, less than
12% of entrepreneurs in Brazil cite at least some in-
ternational customers, while this figure is as high as
82% in Montenegro.
Perhaps nascent entrepreneurs are more likely
to develop innovative offerings, but factors such as
competitive imitation or a lack of ongoing innova-
tion efforts could reduce the novelty of their products
as they start to establish themselves in their market
and industry environment. In addition, changing eco-
nomic conditions may mean that entrepreneurs start-
ing businesses in 2010 are pursuing a higher level of
innovation that their predecessors.
Internationalization
e third measure of entrepreneurial aspirations
describes the international orientation of early-stage
entrepreneurs. is measure is based on the extent en-
trepreneurs sell to customers outside their economies.
is includes exports, but could also include interna-
tional customers buying online, or traveling to an econ-
omy for tourism or business.
Figure 19 shows the percentage of entrepreneurs
stating that at least some, and also more than 25%, of
their customers are from outside their economies in
Percentage of Early-Stage Entrepreneurs
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Uganda
Ghana
Zambia
India
Egypt
Venezuela
Jamaica
Lebanon
Iran
Bosnia and Herzegovina
West Bank and Gaza Strip
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
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
Product is new to all/some customers or
few/no businesses offer same product Product is new to all/some customers and
few/no businesses offer same product
Figure 18: Innovation for Early-Stage Entrepreneurship Activity, 2008–2010
Source: GEM Adult Population Survey (APS)
Chapter 2 A Global Perspective on Entrepreneurship in 2010
GEM Global Report 2010
44
e economies from this region in the factor-driven
and innovation-driven groups also had high percent-
ages of internationalization. ese are relatively small
countries with many country borders. Historically,
they were member states of larger countries, such
as the USSR and the Federal Republic of Yugoslavia,
with considerable trade between states.
Across the economic development levels, countries
with greater size (especially in terms of land area) ex-
hibit lower international orientation. is is the case,
for example, in Iran, India, Brazil, China and Argentina.
e United States, although showing a high proportion
of entrepreneurs with at least some international orien-
tation, shows comparatively few with more than 25% of
customers from outside the country.
While some economies may have large markets,
and seemingly little need to go outside for 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 of) can
impact an economy’s comparative advantage to the
extent local brands have ventured out to compete on
a global scale.
e innovation-driven economies had the highest
average level of international customers in both cat-
egories. Iceland and Belgium stand out as having high
levels of entrepreneurs with some international cus-
tomers. Belgium also had a remarkably high percentage
of entrepreneurs at the 25% or more level—the highest
across the entire sample. Belgium has a very high per-
centage of international trade to GDP and is located in
the center of economic activity in Europe. Iceland, on
the other hand, lies at the periphery. is suggests that,
while international trade is easier in Belgium, it is a ne-
cessity for Iceland if it is to be a wealthy country.
Wealthier economies oen face intense competi-
tive environments, especially since they have been
through the buildup of scale economies in their ef-
ficiency stage, resulting in powerful and established
large organizations. Entrepreneurs can escape the ri-
valry at home by taking their products to new markets
that may value these offerings.
ere are a few noticeable geographic patterns
within the economic groupings. In the efficiency-
driven group, five Eastern European economies have
the highest percentage of international entrepreneurs
(Croatia, Macedonia, Montenegro, Latvia and Turkey).
Figure 19: Percentage of Early-Stage Entrepreneurs with International Orientation,
2008–2010
Source: GEM Adult Population Survey (APS)
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ghana
India
Iran
Uganda
West Bank and Gaza Strip
Bolivia
Venezuela
Zambia
Egypt
Algeria
Vanuatu
Saudi Arabia
Angola
Jamaica
Bosnia and Herzegovina
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
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
Customers Outside Country: More Than 25% Customers Outside Country: 1–25%
45
Capítulo 3 Contexto nacional y mujeres emprendedoras
must be emphasized that they function best with an
underlying foundation of basic requirements and
efficiency enhancers. For example, government
entrepreneurship programs will not be effective
if inadequate health care and primary education
weigh heavily on the populace. Innovation-driven
economies that have built relatively sophisticated
basic requirements and efficiency enhancers, how-
ever, can direct their attention toward enabling
these EFCs.
GEM has developed harmonized, single or mul-
tiple-item measures of these EFCs in a survey instru-
ment called the National Expert Survey (NES)xx. Each
year, national teams personally interview and ad-
minister the questionnaire to at least 36 national
expertsxxi. e analysis of their responses is divided
into 12 sectionsxxii. Altogether, these results sum-
marize the national perceptions of experts across
the EFCs.
3
Entrepreneurship Framework
Conditions—An Assessment of
Institutional Quality by National Experts
e GEM model (see Figure 3) illustrates rel-
evant national conditions impacting economic de-
velopment and activity more generally, and those
facilitating innovation and entrepreneurship more
specifically in a society. ree sets of framework
conditions are expected to concern public and
policy makers at different stages of development.
Basic requirements are the underlying fundamental
conditions required for a well-functioning business
environment. ese are usually the focus of devel-
opment efforts in factor-driven countries. As these
become relatively established, and an economy
moves toward the efficiency stage, attention turns
toward efficiency enhancers.
Finally, there are factors aimed at stimulating and
supporting entrepreneurship activity. ese nine En-
trepreneurship Framework Conditions (EFCs) are
illustrated and described in Figure 20. While these
can be addressed at any stage of development, it
GEM Global Report 2010
46
Figure 20: The GEM Entrepreneurship Framework Conditions
Entrepreneurial
Finance
Entry Regulation Physical
Infrastructure Cultural and Social
Norms
Government Policy Government
Entrepreneurship
Programs
R&D Transfer Commercial and
Legal Infrastructure
The availability of
nancial resources—
equity and debt—for
small and medium
enterprises (SMEs)
(including grants and
subsidies).
Contains two compo-
nents: (1) Market Dy-
namics: the level of
change in markets from
year to year, and (2)
Market Openness: the
extent to which new
rms are free to enter
existing markets.
Ease of access to phy-
sical resources—com-
munication, utilities,
transportation, land or
space—at a price that
does not discriminate
against SMEs.
The extent to which
social and cultural norms
encourage or allow
actions leading to new
business methods or
activities that can poten-
tially increase personal
wealth and income.
The extent to which
taxes or regulations are
either size-neutral or
encourage SMEs.
The extent to which
taxes or regulations
are either size-neutral
or encourage SMEs.
The extent to which
national research and
development will lead to
new commercial oppor-
tunities and is available
to SMEs.
The presence of property
rights and commercial,
accounting, and other
legal services and ins-
titutions that support or
promote SMEs.
Entrepreneurship
Education
The extent to which
training in creating
or managing SMEs is
incorporated within the
education and training
system at all levels
(primary, secondary
and post-school).
47
ties among more economically developed countries.
Of course, experts in factor-driven economies may
have different points of reference in comparison to
their colleagues in the innovation-driven group.
is may explain why the observed differences be-
tween the three country groups are not very high.
Factors that show the most pronounced differences
across phases of economic development include
government programs, R&D transfer and physical
infrastructure. e low scores on the availability of
finance reflect remnants of the 2008–2009 global
financial crisis.
National cultures, in general or from the perspec-
tive of governments, may in some economies be far
more positively disposed to entrepreneurship than in
others; therefore, a comparison of scores on each item
across specific countries may not yield strong conclu-
sions. A key objective of the NES, however, is to pro-
vide a better understanding about the conditions that
emerge inside the countries. Policy makers and other
relevant stakeholders within a nation’s entrepreneur-
ship ecosystem can benefit from understanding the
EFCs and how they are evaluated by national experts.
In many countries, NES results serve as useful barom-
eters of the environment for entrepreneurial activities.
Table 4 provides a general overview of the results
on each factor for the 53 economies participating in
the NES in 2010, organized into the three economic
development groups. is table identifies the top
three items with the lowest and highest scores within
each economy. Table 4 shows that many economies
share both positive and negative elements. For ex-
ample, 50 economies evaluate physical infrastruc-
ture positively, including every efficiency-driven
and innovation-driven economy. Another EFC with
many positive evaluations is the commercial and le-
gal infrastructure; exceptions are exhibited in three
Asian economies (China, Taiwan and the Republic of
Korea), which evaluate this factor negatively.
In 46 economies, education and training in pri-
mary and secondary school is one of the three worst-
performing EFCs. A second EFC that has among the
lowest scores is national policy with regard to regu-
lation of new and growing firms; 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 is
shown in Figure 21. is is consistent with the GEM
model and the notion that EFCs have higher priori-
Figure 21: Scores on Entrepreneurship Framework Conditions Rated by National
Experts, by Stage of Development (Unweighted Country Averages)
Source: GEM Adult Population Survey (APS)
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
Efciency-Driven Economies
Factor-Driven Economies Innovation-Driven Economies
Chapter 3 Entrepreneurship Framework Conditions—An Assessment of Institutional Quality by National Experts
GEM Global Report 2010
48
Table 4: Entrepreneurship Framework Conditions: Three Valued Most Positive (+)
and Three Most Negative (-), Per Country
Factor-Driven Economies
-
-
-
-
-
-
-
-
-
-
-
-
-
+
+
+
+
+
+
+
+
+
+
-
-
-
-
-
-
-
-
-
-
-
+
+
+
+
+
+
+
+
+
-
+
-
-
-
+
+
+
+
+
-
-
+
-
-
-
-
-
+
+
+
+
+
+
+
-
+
+
+
-
-
-
-
-
-
+
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
+
+
-
+
+
+
+
+
+
+
+
+
+
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
-
-
-
-
-
+
+
+
+
+
+
+
+
+
+
+
+
+
-
-
-
-
-
-
-
-
-
-
+
+
+
+
-
+
+
+
+
+
+
+
+
-
+
+
+
+
+
+
+
+
-
+
-
-
-
+
+
-
-
-
-
-
-
+
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
+
+
+
+
+
+
+
-
+
+
-
-
-
-
-
-
-
-
-
-
-
-
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
-
-
-
-
-
+
+
+
+
+
+
+
+
-
+
+
+
+
+
+
+
+
-
-
+
+
+
-
-
+
1 Finance
2a Nat. Policy — General Policy
2b Nat. Policy — Regulation
3 Government Programs
4a Education — Prim. and Second.
4b Education — Post-School
5 R&D Transfer
6 Commercial Infrastructure
7a Internal Market — Dynamics
7b Internal Market — Openness
8 Physical Infrastructure
9 Cultural and Social Norms
Angola
Bolivia
Egypt
Ghana
Guatemala
Iran
Jamaica
Pakistan
Uganda
Vanuatu
West Bank and Gaza Strip
Zambia
Innovation-Driven Economies
Finland
France
Germany
Greece
Iceland
Ireland
Israel
Italy
Japan
Republic of Korea
Norway
Portugal
Slovenia
Spain
Sweden
Switzerland
United Kingdom
United States
Source: GEM National Expert Survey (NES)
1 2a 4a 7a 2b 4b 7b 3 5 8 6 9
Argentina
Bosnia and Herzegovina
Brazil
Chile
China
Colombia
Costa Rica
Croatia
Ecuador
Hungary
Latvia
Macedonia
Malaysia
Mexico
Montenegro
Peru
Russia
South Africa
Taiwan
Trinidad and Tobago
Tunisia
Turkey
Uruguay
Efciency-Driven Economies
49
4
Entrepreneurship and the Global
Economy in 2010
who have worked in the financial sector as employ-
ees (possibly in activities of a somewhat entrepre-
neurial nature) might look for ways to earn their
own income, perhaps in a different sector. Some
may see better prospects for starting companies
because the cost of human and capital resources
has dropped. Others, having considered the entre-
preneurship option in good times, might opt for
employment over the next few years, saving their
entrepreneurial aspirations for later.
Consequently, some of the self-employed may
not be very entrepreneurial and some employees
may, in fact, be very entrepreneurialxxiv. A simple
study of the number of self-employed individuals
or start-ups does not therefore lead to satisfactory
answers about the impact of a recession on entre-
preneurship activity. e GEM methodology and
the richness of its data, however, can help overcome
this limitation and provide more intuitive and rel-
evant insights.
is analysis addresses two key questions. e
first examines the extent recessions affect new en-
trepreneurship activity. On the one hand, we may
expect fewer start-up activities because of lower per-
ceived opportunities. On the other, start-up activi-
ties may increase as a result of more people starting
businesses out of necessity. Yet another explanation
is that recessions can free 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, a
number of countries have suffered a vivid after-
shock in 2010. When this report went to print,
problems still persisted in Europe. The Europe-
an Union and IMF structured bailouts to rescue
Greece and Ireland from bankruptcy, while po-
tentially similar scenarios were looming for some
other European countries.
In this chapter, we use nine years of GEM data
to examine patterns in entrepreneurship around
major shis in the economy. In addition, we reveal
results of specific questions that were included in
the adult population survey in 2009 and 2010; those
entrepreneurs who where polled gave their impres-
sions about starting and operating their businesses
in the current environment.
William Baumol, in a seminal article on entre-
preneurship and development, argued for a con-
stant ‘rate’ of entrepreneurship across societiesx xiii.
is rate would be regulated by institutions, rules
and norms, which determine the extent entrepre-
neurship is productive and contributing toward
economic development.
If Baumol is correct, one could argue that reces-
sions cause shis in the balance of various types of
entrepreneurship activities, rather than a reduction
in entrepreneurship itself. For example, individuals
GEM Global Report 2010
50
Analysis of Entrepreneurship in
Ireland: 2002-2010
Figure 22 and Figure 23 show the evolution of
entrepreneurial attitudes and activity in the Irish
working-age population from 2002 to 2010xxv.
Consistent with the findings for Argentina and the
United States in the 2009 GEM reportxxvi, the Irish
population appears to have acted, from around
2006, as if it anticipated trouble ahead.
As Figure 22 indicates, perceived opportunities
to start a business (among the Irish working-age
population) declined about 50% from 2007 to 2010.
e fear of failure rate in 2010 showed no deviation
from the long-term trend, however, while this indi-
cator rose in the U.S. before the recession. Fear of
failure is already comparatively higher in Ireland,
though, with average scores for an innovation-driv-
en economy, while the U.S. typically rates low on
this measure.
With regard to entrepreneurship activity, Figure
23 shows that the number of people involved in
new start-ups declined moderately between 2006
and 2008. Between 2008 and 2010, the number of
individuals actually owning and managing a new
firm also seems to be in decline. Perhaps the most
remarkable indicator is the staggering growth in the
percentage of necessity-motivated early-stage entre-
preneurs from 2007 to 2010.
Overall, people in Ireland were not seeing as
many opportunities for entrepreneurship starting
in 2007, the year before the recession hit. Fewer
people were setting up businesses a couple of years
before the recession started, and a smaller amount
of entrepreneurs were running new businesses dur-
ing the recession. In addition, the percentage of ne-
cessity entrepreneurs rose markedly just before and
during the recession. is all suggests that people
were not optimistic about prospects for entrepre-
neurship before the recession, and were possibly
more likely to hold onto their jobs, rather than
start businesses with opportunity motives. Yet with
fewer job prospects during these challenging times,
some people needed entrepreneurship as a source
of income.
portunities to start businesses, given the change in
their circumstances generated by the recession.
us, this first question cannot be answered
solely by observing the annual number of start-
ups. What matters are what types of businesses are
being set up, the underlying motivations for start-
ing them and the kind of aspirations the entrepre-
neurs have for their businesses. GEM can provide
insights into this issue because the methodology
explicitly considers different types and phases of
entrepreneurship activity.
e second question explores the extent entre-
preneurship serves as a mechanism for reversing the
downward trend, even shiing it into an upward one.
Several theories propose that the best innovations
have been initiated in times of recession (or depres-
sion, as in the 1930s), when societies were more open
to change. Prior to these downturns, prevailing busi-
ness models were considered successful and there
was little call for change, impeding new introduc-
tions from taking place on a significant scale. In times
of recession, however, old assumptions are brought
into question. New entrants can gain a foothold as
incumbents reel from the shock of change. During
the years preceding the 2008–2009 recession, R&D
investments have revealed some potentially fruitful
areas such as green technology.
In this section, we highlight the evolution of en-
trepreneurial attitudes, activity and aspirations in
several countries that have been involved in GEM
throughout the 2002–2010 period, a period reflect-
ing a full business cycle. e 2009 GEM Global Re-
port highlighted the United States and Argentina
as special cases of countries hit by severe recession
(Argentina in 2000 and the United States in 2008–
2009). In this report we show the development of
some of the main GEM indicators over time for
Ireland, a country that has witnessed particularly
severe financial problems in 2010.
4.1 The Impact of Recessions
on Entrepreneurship:
Evidence from GEM Data
51
Figure 22: Entrepreneurial Attitudes in Ireland, 2002–2010
Figure 23: Entrepreneurial Activity in Ireland, 2002–2010
Source: GEM Adult Population Survey (APS)
Source: GEM Adult Population Survey (APS)
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 Failure
Start-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 Rate
Discontinuation Rate Necessity Motivation (Right Axis)
Young Firm Prevalence Rate
Chapter 4 Entrepreneurship and the Global Economy in 2010
GEM Global Report 2010
52
e next analysis focuses on all the economies
that consistently participated in GEM over the
2002–2010 period, based on the following four
main indicators of attitudes and activity:
• Perceived opportunities to start businesses by
the working age population
• e percentage of owner-managers in new
firms in the working age population
• e percentage of early-stage entrepreneurs
that have started out of necessity
• e percentage of early-stage entrepreneurs
expecting to have at least 5 employees
e 2002–2010 period is divided into three time
frames: (1) 2002–2004, aer the dot.com bubble
burst, (2) 2005–2007, a time generally characterized
by expansion; and (3) 2008–2010, during the global
slowdown. e selection of economies is based on
the availability of an adequate sample of entrepre-
neurs in each period. is is necessary in order to
interpret the differences over time with sufficient
statistical precisionxxvii.
Figure 24 portrays the development of perceived
opportunities to start businesses by the working age
population. In four out of the six efficiency-driven
economies 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 Argentina
showed a drop; perceptions are still higher than
the 2002–2004 period, however, when this country
struggled to emerge from its 2000 financial crisis.
In the innovation-driven countries, a different
pattern is evident. Nine out of twelve countries ex-
hibited a decline in perceived opportunities in the
past three years, compared to 2005–2007. e most
remarkable relative drop in this attitude in the more
recent 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
from the low perceptions recorded in 2005–2007.
4.2 Analysis of GEM Economies:
2002–2010
A comparison of Figure 24 with Figure 26 and
Figure 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, prevalence
rates of owner-managers in new firms also showed
an increase (see Figure 25). Additionally, the results
in Figure 26 indicate that necessity entrepreneur-
ship in Chile increased only slightly in the most
recent period, while the degree of early-stage entre-
preneurs with some growth expectations (Figure 27)
remained high, despite a small drop. Together, the
results for this newest OECD-member may reflect
a population with increasingly positive percep-
tions and job opportunities. Figure 27 also shows
remarkable increases in job growth expectations in
South Africa, while those in China and Argentina
have been tempered somewhat.
As Figure 25 shows, entrepreneurial activity in
the innovation-driven economies has dropped in
Germany, Norway and Spain in the most recent pe-
riod. For the United States and Denmark, a decline
was already set in motion during 2005–2007. e
Netherlands has shown a remarkable rise in activ-
ity by individual owner-managers of new firms. e
same holds true for Greece. However, Figure 26
shows that while necessity-driven activity remained
low in the Netherlands, it increased in Greece, indi-
cating that the latter country’s rise was mostly due
to necessity.
e percentage of early-stage entrepreneurs
expecting to employ at least five people within
five years remained low among innovation-driven
economies. Concurrently, necessity-driven entre-
preneurship increased in the United States and in
Ireland—as Section 4.1 pointed out. We should
note that, although most necessity-motivated new
ventures are associated with marginal businesses, a
significant minority of these may very well turn out
to be highly successful. In Ireland for example, the
higher rate of necessity-driven entrepreneurship has
not (yet) led to a significant decrease in the percent-
age of early-stage entrepreneurs with job growth
expectations (Figure 27), even though most of the
other economies tended to show small declines in
this 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, for 2002–2004,
2005–2007 and 2008–2010, Respectively1
Figure 25: Owner-Managers of New Firms: Percentage in the Working Age Popula-
tion, by Country, for 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)
Chapter 4 Entrepreneurship and the Global Economy in 2010
70%
60%
50%
40%
30%
20%
10%
0%
Percentage of Adult Population Between 18–64 Years
Hungary
China
Brazil
Argentina
Chile
Spain
Greece
Belgium
Ireland
Germany
Italy
Netherlands
Iceland
Norway
Denmark
Innovation-Driven EconomiesEfciency-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
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
12%
10%
8%
6%
4%
2%
0%
Percentage of Adult Population Between 18–64 Years
Innovation-Driven EconomiesEfciency-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
GEM Global Report 2010
54
Figure 26: Percentage of Early-Stage Entrepreneurs indicating That They Are Invol-
ved in Entrepreneuship out of Necessity, by Countriy, for 2002-2004, 2005-2007
and 2008-2010, Respectively1
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, Respectively1
1Economies are ordered according to their point estimate for the 2008–2010 period, within countr y groups.
Source: GEM Adult Population Survey (APS)
60%
50%
40%
30%
20%
10%
0%
4
0
-2002
70-5002
01-8002
4
0
-20
02
7
0
-5002
01-8002
40-2002
70
-5
002
01
-8
002
40
-2
002
70
-500
2
01-800
2
40-2002
70-5002
01-8002
40-200
2
70-5002
01-8002
40
-
2002
70
-50
02
0
1
-80
02
40
-20
02
7
0
-50
02
0
1
-8002
40-2002
70-5002
01-8002
40-2002
70
-5
002
01
-
8002
40-2002
70-5002
01
-
8002
4
0
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02
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0
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01-8002
40-2002
70-5002
01-8002
40
-
2002
70
-500
2
01-80
02
40
-
2002
70
-
5002
01
-80
02
40-2002
70-5002
01-8002
40-2002
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01
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002
40
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2
01-8002
sruen
erp
ertn
E egatS
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Innovation-Driven EconomiesEfficiency-Driven Economies
yrag
n
uH
anihC
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zar
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a
nit
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r
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elih
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P
60%
50%
40%
30%
20%
10%
0%
Innovation-Driven Economies
Efficiency-Driven Economies
40
-2002
70
-500
2
01-8002
40
-
2002
70
-5002
01
-800
2
40
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002
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2
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40-2002
70
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01
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0
2
40
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70
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01
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40
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70
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01
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40-2002
70
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01
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40
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02
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40
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70
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yragnuH
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–
55
This section shows how entrepreneurs in the
three economic groups perceived the impact of
the global recession for their businesses. This
analysis is based on special questions that have
been included in the GEM 2009 and 2010 surveys.
The results show how entrepreneurs in different
phases of the entrepreneurship process perceive
their own business activities in the shadow of the
economic crisis.
Opportunities for Starting and
Growing a Business Compared to
One Year Ago
In the GEM 2009 and 2010 surveys, two ques-
tions were added to assess how early-stage entre-
preneurs evaluated the conditions for starting a busi-
ness in comparison to the previous year. Figure 28
shows results for those countries in which informa-
tion was available for both years. In 2009, an average
of 60% of the entrepreneurs found it more difficult
to start a business. is percentage dropped to 50%
in 2010xxviii.
ere appear to be substantial differences among
the economies, however. In both years, more entre-
preneurs in factor-driven economies, on average,
claimed that it was more difficult to start a business
than in other economies. Many of these entrepre-
neurs have little contact with global financial mar-
kets, so they would be less affected by changes in
the world economy. However, they are more likely
necessity-driven and may perceive their circum-
stances as increasingly challenging.
Efficiency-driven entrepreneurs were among the
most negative about the ease of starting businesses
in 2009. is measure improved substantially in
2010, reflecting their greater connection to global
4.3 Entrepreneurs’ Impressions of
the Impact of the Recession
on Entrepreneurship Activity
markets, compared to the factor-driven group. Im-
provements were particularly noticeable in some
Latin American countries (Argentina, Brazil, Chile,
Colombia, Uruguay) and Eastern European coun-
tries (Hungary, Latvia, Russia).
e greatest gains, however, were found among
the innovation-driven economies. In Finland and
Slovenia, the proportion of early-stage entrepre-
neurs citing it was more difficult to start businesses
in 2010 declined to half the level it was in 2009.
Results from Iceland were also encouraging; far
fewer entrepreneurs evaluated this item negatively
in 2010 (44%) compared to 2009 (80%), when they
were in the midst of their financial crisis.
Still, many countries in the innovation-driven
group remain pessimistic, with more than half of
their early-stage entrepreneurs stating it was hard-
er to start a business in 2010 compared to the year
before. is includes European countries Greece
(76%), Ireland (56%), Italy (60%), Portugal (62%)
and Spain (72%), as well as the Republic of Korea
and Israel (both 60%). is confirms that turbulent
economic conditions can diminish prospects for
new start-ups.
Perceptions about the difficulties of starting a
business by early-stage entrepreneurs correspond
closely with expectations for growth by established
entrepreneurs. Countries with negative percep-
tions in Figure 28 also dominate on the negative
side in Figure 29. Exceptions include China, where
established entrepreneurs see more positive devel-
opments in terms of growth potential, compared
with the greater difficulties perceived by early-stage
entrepreneurs. is concurs with the drop in TEA
rate in China for 2010.
Other notable positive developments in terms
of growth potential were observed in established
entrepreneurs from Uruguay and Chile. Russia and
Latvia also saw substantial improvements in this
measure; nevertheless, almost half of the estab-
lished entrepreneurs still saw lower expectations
for growth in 2010 over the previous year.
Chapter 4 Entrepreneurship and the Global Economy in 2010
GEM Global Report 2010
56
Figure 28: Percentages of Total Early-Stage Entrepreneurs Who Find Starting a
Business Now More Difficult Compared to One Year Ago, 2009 and 2010
Figure 29: Percentages of Established Entrepreneurs Whose Expectations for
Growth Are Lower Compared to One Year Ago, 2009 and 2010
Source: GEM Adult Population Survey (APS)
Percentage of Early-Stage Entrepreneurs
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
2009 2010
Saudi Arabia
West Bank and Gaza Strip
Uganda
Iran
Guatemala
Jamaica
Uruguay
Peru
Chile
Brazil
Latvia
Colombia
Argentina
Russia
Hungary
Tunisia
Malaysia
South Africa
Croatia
Bosnia and Herzegovina
China
Ecuador
Romania
Finland
Slovenia
Netherlands
Switzerland
Norway
Germany
Belgium
France
Iceland
Japan
United States
Italy
Korea
Israel
Spain
Greece
Percentage of Early-Stage Entrepreneurs
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Factor-Driven Economies Innovation-Driven EconomiesEfciency-Driven Economies
2009 2010
Uganda
Saudi Arabia
Iran
West Bank and Gaza Strip
Jamaica
Guatemala
Uruguay
Chile
China
Brazil
Peru
Ecuador
Malaysia
Argentina
Colombia
South Africa
Latvia
Russia
Tunisia
Hungary
Croatia
Bosnia and Herzegovina
Romania
Finland
France
Switzerland
Netherlands
United Kingdom
Israel
Iceland
Norway
Slovenia
Belgium
Germany
United States
Japan
Italy
Korea
Spain
Greece
57
Figure 30: Impact of the Global Economic Slowdown on Entrepreneurs’ Perception
of Opportunities for Their Businesses, According to the Entrepreneurs (Unweighted
Country Averages)
Source: GEM Adult Population Survey (APS)
The Recession and the Impact on
Perceived Business Opportunities
e 2010 adult population surveys asked entrepre-
neu rs for thei r vie ws on t he effect of the “globa l eco nomic
slowdown” on business opportunities for their start-up or
existing businesses. Figure 30 summarizes the results by
economic group and type of entrepreneur. It is clear that
a majority of entrepreneurs in all phases of economic de-
ve lop ment se e fe wer opp ort uni tie s fo r th eir bus ine ss. S ti ll,
a quarter of nascent entrepreneurs in innovation-driven
countries see more opportunities for their business, at a
higher frequency than the other two groups.
More notably, in four of these countries the percent-
age of nascent entrepreneurs with positive perceptions
relative to the global slowdown outnumbered those
with negative perceptions: Germany, the Netherlands,
Sweden and Switzerland. Figure 30 shows that nascent
entrepreneurs and owner-managers of new firms tend-
ed to be more optimistic than established entrepreneurs,
particularly in innovation-driven countries. It should
be pointed out that these questions are relative, and in
countries that have been relatively unaffected by the
global slowdown, entrepreneurs may see little difference
from one year to the next.
By contrast, in innovation-driven countries, where
much has changed, a significant minority of entrepre-
neurs see opportunity where others see danger. ese
individuals tended to be younger and better educated,
and generally had higher aspiration levels in terms of
job expectation and innovationxxix.
70%
60%
50%
40%
30%
20%
10%
0%
Efciency-Driven Economies
Factor-Driven Economies Innovation-Driven Economies
Fewer Business
Opportunities
Fewer Business
Opportunities
Fewer Business
Opportunities
More Business
Opportunities
More Business
Opportunities
More Business
Opportunities
About
the Same
About
the Same
About
the Same
Nascent Entrepreneurs Owner-Managers of Established BusinessesOwner-Managers of New Businesses
Chapter 4 Entrepreneurship and the Global Economy in 2010
“We are investing in new equipment for expansion of the business. We believe
that 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 airlines
begin hiring, which we are already beginning to see signs of. Past experience has
shown that those who defer investment during a recession pay the price when
the upswing comes, as they are unable to reposition themselves quickly enough.”
Feargal Keogh, CEO and Co-founder of Simtech, Ireland
GEM Global Report 2010
58
nesses particularly where and when basic require-
ments are not, as yet, fully developed. To the extent
these and other factors do not act as deterrents to
their efforts, these entrepreneurs can thrive and their
societies will benefit. Entrepreneurship can thus pro-
vide a source of income when an economy cannot yet
supply enough jobs or other alternatives for 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 economic
ecosystem to help provide jobs to a populace. But
even in wealthier regions, necessity-based activity
offers a source of income during tough economic
times, as it has during the 2008–2009 recession.
Societies also need opportunity entrepreneurs to
ensure new ideas come into being through the energy
of enterprising individuals. Many people appear to
see fewer reasons for becoming entrepreneurs when
they have stable job options. Surely, some will leave
these jobs to become entrepreneurs. ey may do so
because they see opportunities, and have particular
attitudes and beliefs to inspire them. Nonetheless, the
motivation to take these paths may diminish when
other seemingly more attractive options abound.
Where incentives for being an employee sub-
stantially exceed those associated with becoming
an entrepreneur, policy makers may consider either
5
Conclusions and Implications
GEM offers a wealth of measures that can provide
greater understanding about the nature and level of
entrepreneurship worldwide. A number of implica-
tions can be drawn from this year’s results, and we will
identify a few key ones in this chapter. It is important
to recognize, however, that each economy represents
a unique context. erefore, it is nearly impossible to
make specific policy prescriptions at the global level.
e following general recommendations are designed
to help in the framing of country-specific policies.
It’s Not Just About More Entrepreneurs
e analysis of the three economic stages shows that
lower development levels typically have a high number
of individuals involved in starting and developing new
businesses. Yet these people are more likely to have been
pushed into entrepreneurship by necessity. ey are
less likely to grow innovative businesses, reach for high
growth 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 of entrepreneurs.
Facilitate Necessity, Encourage
Opportunity
Economies need people to self-employ when
required. Necessity-based entrepreneurs start busi-
59
nomic level enables one to understand what might
be unique at a particular phase of development, or
to learn from others in the same economic situa-
tion. Across the development groups, for example,
the innovation-driven populace saw entrepre-
neurs as having high status, but they showed less
interest in becoming one. The efficiency-driven
economies, on the other hand, generally thought
entrepreneurship was a good career choice, de-
spite not seeing much media attention or status
with regard to entrepreneurs.
In addition, the patterns exhibited in geographic
regions reveal an opportunity for regional studies
of entrepreneurship, to understand how similari-
ties among neighbors influence entrepreneurship
and perhaps to outline approaches for bringing
about improvements. For instance, the sub-Saharan
(factor-driven) and the Latin American/Caribbean
(efficiency-driven) economies exhibited high oppor-
tunity/capability perceptions and high TEA, but low
growth aspirations. Conversely, the MENA region
(factor-driven) and the Eastern European (efficien-
cy-driven) economies had the opposite: low oppor-
tunity/capability perceptions and low TEA, but high
growth projections.
Promote Entrepreneurship in
Many Forms
Entrepreneurship in a society can be portrayed
as a por tfolio of different business phas es and t ypes.
Individuals in the process of starting businesses
become new entrepreneurs, and then established
business owners. A variety of entrepreneurs at all
phases will ensure this activity is continually re-
newed and sustained. Economies also need growth
businesses to create new jobs. ey need innova-
tion to boost their societies’ comparative advantage.
And because markets are increasingly global, they
must have entrepreneurs capable of international
competition. ese entrepreneurial endeavors may
emerge, not only in start-ups, but also social enter-
prises, family businesses, corporate environments
and other contexts.
In addition, economies need many differ-
ent types of entrepreneurs, including those that
may be underrepresented: younger and older in-
dividuals, women and poorer or disadvantaged
groups. Some economies, for instance, showed
reducing the advantages employees receive relative
to entrepreneurs, or providing greater benefits for
entrepreneurs, depending on the specific circum-
stances in their economies.
To sum up, while basic requirements allow ne-
cessity-based entrepreneurs to get started, entre-
preneurship framework conditions (EFC) may be
important in promoting opportunity entrepreneurs.
Policy makers may therefore examine how they can
both enable necessity motivation and/or encourage
opportunity motivation.
Ensure Both Entrepreneurial
Dynamism and Stability
Dynamism happens through the birth of new
firms, led by individuals with novel ideas that create
new value. Some of these births displace old busi-
nesses that have outlived their useful lives; perhaps
their founders go on to start new firms or otherwise
apply their learning to help the entrepreneurial
ecosystem. Starts and stops can also signal experi-
ments, many of which will fail, but some of which
will produce tremendous wins. ese experiments
also provide valuable lessons to entrepreneurial in-
dividuals who can try again. Failure is therefore a
component of entrepreneurship. As such, both en-
trances and exits are important to a dynamic entre-
preneurial society.
Stability is disrupted, however, when those
individuals that can otherwise bring promising
ideas to life are thwarted by conditions in their
environments—social expectations, lack of a legal
infrastructure, government policies, economic in-
stability and so forth. For example, the factor-driv-
en economies in the 2010 GEM survey exhibited
a tendency toward fewer established businesses
relative to nascent and new ones, and a higher rate
of discontinuance. A lot of unsustainable business
starts may be a misuse of resources. Start-up efforts
need to be accompanied with the ability for these
businesses to have their best chance to test and
reach their potential.
Learn from Your Economic Peers and
Your Geographic Neighbors
Entrepreneurship is unique in every economy.
Yet the study of entrepreneurship relative to eco-
Chapter 5 Conclusions and Implications
GEM Global Report 2010
60
Promote an Entrepreneurial Mindset
Across the Population
An economy’s entrepreneurial capacity requires
individuals with the ability and motivations to start
businesses. ese entrepreneurs, however, will need
to rely on a wide variety of personal and professional
support mechanisms: families, advisors, government
officials, creditors and investors, suppliers and cus-
tomers and so forth. ese stakeholders need to be
willing to support entrepreneurs, perhaps taking
some risks along with them.
In addition, societal-level impressions can im-
pact entrepreneurs. Non-entrepreneurs with entre-
preneurial mindsets may indirectly stimulate others
to start businesses. Efforts to promote entrepreneur-
ship may therefore benefit from improving the per-
spective of the wider population. is highlights, for
instance, the role of media in promoting positive im-
ages of entrepreneurs. It also underscores the value
of training and education in preparing individuals
who can pursue entrepreneurship when needed or
when opportunity strikes.
Toward the Future
GEM in 2010 has reached across the globe to as-
sess entrepreneurship across multiple levels of eco-
nomic development, attaining greater geographic
coverage than at any time during its 12-year history.
As GEM continues to grow, so will its impact—on
policy makers, researchers, educators and most of all,
people. People become entrepreneurs, and in so do-
ing, create sources of income for their families. ey
bring to life new products and services that provide
value and improvements to their communities and
to those around the world. As such, they create jobs
and contribute to the economic development and
comparative advantage of their societies.
We invite you to reflect on, share and discuss this
report. It is our hope that in so doing, we can work
to improve the lives and well-being of those around
the world, employing entrepreneurship where, when
and how it is needed most.
fewer women, or a low number of younger or
older entrepreneurs. When an economy neglects a
large demographic in its entrepreneurship ranks,
it misses an opportunity to fully benefit from its
entrepreneurial potential.
Consider Development Level When
Designing Entrepreneurship Initiatives
For factor-driven economies, it is critical to
develop a sufficient foundation of basic require-
ments that can support sustainable businesses. En-
trepreneurs can bring greater efficiency to the ag-
riculture, extraction and other industries typically
found in their development stage. But they can
also lay the groundwork for future growth in their
economies and the emergence of new industries.
These efforts therefore create value for their soci-
eties, but also contribute toward the well-being of
their future generations.
For efficiency-driven economies, the nurturing
of economies of scale attracts more growth- and
technology-oriented entrepreneurs, creating more
employment opportunities. Although large firms
dominate, this opens up niches for small and me-
dium enterprises that can perform supply chain,
service and other activities. This process depends
on the foundation of basic requirements like in-
frastructure and macroeconomic stability, but
increasingly requires financial markets, higher
education, technological readiness and other ef-
ficiency enhancers.
For innovation-driven economies, there is great-
er potential for innovative entrepreneurial activity
leading to the introduction of new combinations of
products and markets. As this requires greater reli-
ance on knowledge, there will need to be R&D trans-
fer mechanisms and a commercial and legal infra-
structure, among other entrepreneurial framework
conditions. But it also assumes an adequate base of
the more fundamental factors.
61
of at least 2,000 individuals aged between 18 and 64
in each participating economy. In addition, GEM na-
tional teams conduct National Expert Surveys (NES)
to obtain insights about particular factors impacting
entrepreneurship in each country.
GEM aims to be the leading source of informa-
tion and analysis about entrepreneurship across the
globe. e study employs an original methodology
that has been continually refined over 12 years. Data
collection follows strict quality control procedures.
is strong methodology, and other distinct features,
contributes to the project’s uniqueness and value for
those seeking to benchmark and make comparisons
about entrepreneurship among nations. anks to
the effort and dedication of hundreds of entrepre-
neurship scholars as well as policy advisors across
the globe, the GEM consortium is a unique network
building 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 monitors
the process for quality control. The GEM central
coordination team and its specialized staff ensure
each team follows strict GEM research standards.
This strengthens data quality and allows for the
harmonization of data across all participating
countries. All teams and vendors therefore adopt
the same methodology.
Appendix 1: Background on GEM
e Global Entrepreneurship Monitor was con-
ceived in 1997 by Michael Hay of London Business
School (LBS) and Bill Bygrave of Babson College.
LBS and Babson funded a prototype study that year.
Ten national teams conducted the first GEM Global
study in 1999 with Paul Reynolds as the principal
investigator. e Global Entrepreneurship Research
Association (GERA) was formed in 2004 to serve
as the oversight body for GEM. GERA is a not-for-
profit organization governed by representatives of
the national teams, the two founding institutions and
sponsoring institutions.
GERA’s mission is to contribute to global eco-
nomic development through entrepreneurship. To
achieve this, GERA seeks to increase worldwide
knowledge about entrepreneurship by conducting
and disseminating world-class research that:
1. Uncovers and measures factors impacting the
level of entrepreneurial activity among economies,
2. Identifies policies that may enhance entrepre-
neurial activity, and
3. Increases the influence of education in sup-
porting successful entrepreneurship.
Since the first study in 1999, more than 80 nation-
al teams have participated in the GEM consortium.
Led by a central coordination team, the consortium
administers an annual adult population survey (APS)
GEM Global Report 2010
62
high-growth ventures and entrepreneurial finance.
Annual special reports are also developed based
on questions added to the APS during an annual
cycle on topics such as entrepreneurship educa-
tion/training and social entrepreneurship. Special
topics and questions are approved by the GERA
annual assembly and reviewed by the central co-
ordination team.
Contact details, GEM 2009 National Summary
Sheets and national teams’ micro-sites can be found
on www.gemconsortium.org. e GEM national re-
ports, produced by the national teams, provide more
in-depth information on specific economies. A se-
lection of GEM data is also made available on this
website, and tables can be downloaded free of charge
using drop-down menus. e GEM website also pro-
vides an updated list of the growing number of peer-
reviewed scientific articles based on GEM data.
Quality control is similar for the NES, with an
oversight role played by the central coordination
team. National teams conduct this survey in accor-
dance with the specific procedures and policies es-
tablished by the GEM consortium. e NES process
includes the selection of at least 36 experts, covering
nine framework conditions that influence a nation’s
entrepreneurial environment: financial support,
government policies and programs, education and
training, R&D transfer, access to commercial and
professional infrastructure, internal market dynam-
ics, access to physical infrastructure and social and
cultural norms. Interviews are conducted with at
least four experts in each of the nine areas.
GEM publishes annual global reports and GEM
national teams publish individual country-level re-
ports. In addition, GEM publishes special reports
on topics including women entrepreneurship,
63
Appendix 2: Glossary of Main
Measures 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 the
area where they live
Perceived Capabilities Percentage of 18–64 age group who believe to have the required skills and knowledge
to 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 as
Desirable Career Choice
High-Status Successful
Entrepreneurship
Media Attention for
Entrepreneurship
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 choice
Percentage 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, they
will often see stories in the public media about successful new businesses
Nascent Entrepreneurship
Rate
New Business Ownership
Rate
Percentage of 18–64 age group who are currently a nascent entrepreneur, i.e., actively
involved 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 or
any other payments to the owners for more than three months, but not more than
42 months
Continued
GEM Global Report 2010
64
Entrepreneurial Aspirations
Entrepreneurial Activity
Measure Description
Total Early-Stage Entre-
preneurial Activity (TEA)
Established Business
Ownership Rate
Business Discontinuation
Rate
Necessity-Driven
Entrepreneurial Activity:
Relative Prevalence
Improvement-Driven
Opportunity 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 dened 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, wages
or 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 dened
above) who are involved in entrepreneurship because they had no other option
for work.
Percentage of those involved in total early-stage entrepreneurial activity (as dened
above) who (i) claim to be driven by opportunity, as opposed to nding no other option
for 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 Expectation
Early-Stage Entrepre-
neurial Activity: Relative
Prevalence
New Product-Market
Oriented Early-Stage
Entrepreneurial Activity:
Relative Prevalence
International Orientation
Entrepreneurial Activity
Percentage of total early-stage entrepreneurs (as dened above) who expect to employ
at 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 dened above) who indicate that
their product or service is new to at least some customers and indicate that not many
businesses offer the same product or service
Weak measure: product is new or not many businesses offer the same product or
service
Percentage of total early-stage entrepreneurs (as dened above) with more than 25%
of the customers coming from other countries
Weak measure: more than 1% of the customers coming from other countries
65
Appendix 3: Characteristics
of GEM Surveys
Country Interview Procedure Sampling Method Frequency
Angola
Argentina
Australia
Belgium
Bolivia
Bosnia and Herzegovina
Brazil
Chile
China
Colombia
Costa Rica
Croatia
Denmark
Ecuador
Egypt
Finland
France
Germany
Ghana
Greece
Guatemala
2167
2001
2000
2000
3524
2000
2000
7195
3677
11029
2003
2000
1957
2077
2769
2006
2012
5552
2447
2000
2285
Face-to-Face
Fixed-Line Phone
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone and
Mobile Phone
Face-to-Face
Fixed-Line Phone
Face-to-Face
Fixed-Line and Face-
to-Face
Face-to-Face
Fixed-Line and Face-
to-Face
Face-to-Face
Fixed-Line Phone
Mobile Phone
Face-to-Face
Mobile Phone and Face-
to-Face
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone
Fixed-Line Phone
Face-to-Face
Fixed-Line Phone
Face-to-Face
Random Sampling Using Census Data
Random Dial from List
Random Digit Dialing
Random Digit Dialing (mobiles); Random Dial
from List (xed-line)
Random Walk Method within randomly selected
cluster of homes
Random Dial from List
Random choice of Census Tracts in every city,
dened by census
Random Dial from List; Random Walk Method
(multi-staged)
Random Walk Method (multi-staged)
Random Dial from List; Random Sampling using
Cartographic data
Random Sampling using Census data (multi-staged)
Random Dial from List
Random Dial from List
Cluster Sampling Using Census
Random Digit Dialing; Random Walk Method
Random Dial from List
Random Dial from List
Random Digit Dialing
Random Sampling Using Census Data
Random Digit Dialing and Random Dial from List
Random Sampling Using Available Maps
Continued
Table A1: GEM National Adult Population Surveys: 2010 Sample Size and Procedures
GEM Global Report 2010
66
Country Interview Procedure Sampling Method Frequency
Hungary
Iceland
Iran
Ireland
Israel
Italy
Jamaica
Japan
Korea
Latvia
Macedonia
Malaysia
Mexico
Montenegro
Netherlands
Norway
Pakistan
Peru
Portugal1
Romania
Russia
Saudi Arabia
Slovenia
South Africa
Spain
Sweden
Switzerland
Taiwan
Trinidad and Tobago
Tunisia
Turkey
Uganda
United Kingdom
United States
Uruguay
Vanuatu
West Bank & Gaza Strip
Zambia
2000
2001
3359
2000
2007
3000
2298
2006
2001
2001
2002
2010
2605
2000
3502
2002
2007
2108
3012
2235
1736
2000
3012
3279
26388
2492
2002
2001
2016
2001
2401
2267
3000
4000
2034
1182
1992
2039
Mobile Phone
Fixed-Line Phone and
Mobile Phone
Face-to-Face
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone
Fixed-Line Phone
Face-to-Face
Fixed-Line Phone
Fixed-Line Phone
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone and
Mobile Phone
Face-to-Face
Face-to-Face
Face-to-Face
Fixed-Line Phone
Fixed-Line Phone and
Mobile Phone
Face-to-Face
Face-to-Face
Fixed-Line Phone and
Mobile Phone
Face-to-Face
Face-to-Face
Mobile Phone
Fixed-Line Phone
Face-to-Face
Fixed-Line Phone (re-
spondent may request to
be called back on mobile)
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone
Fixed-Line Phone
Face-to-Face
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone
Face-to-Face
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone and
Mobile Phone
Fixed-Line Phone
Face-to-Face
Face-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 Dialing
Random Dial from List
Random Sampling Using Census Data (multi-staged)
Random Digit Dialing
Random Digit Dialing
Random Digit Dialing and Random Dial from List
Random Digit Dialing (Mobiles); Random Dial
from List (Fixed-Line)
Random Sampling Using Census Data
Random Sampling Using Census Data
Random Sampling Using Census Data and Voter Records
Random Dial from List
Random Dial from List
Random Sampling Using Census Data
Random Sampling from List Using Jump Interval
(Every 3 Houses)
Random Digit Dialing (mobiles); Random Dial
from List (Fixed-Line)
Random Sampling by Voting Districs
Random Sampling by Electoral Districs and Ran-
dom Walk Method
Random Digit Dialing
Random Dial from List
Random Sampling from List Using Fixed-Interval
Procedure
Random Dial from List
Random Dial from List
Random Dial from List
Random Digit Dialing
Random Sampling Using Census Data
Random Digit Dialing; Random Dial from List
Random Digit Dialing
Random Sampling Using Local Council Registers
Random 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 Data
Random Sampling Using List
Stratied Cluster Sampling
1 Azores is included
67
GEM National Teams 2010
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Angola
Argentina
Australia
Universidade
Católica de Angola
(UCAN)
Sociedade
Portuguesa de
Inovação (SPI)
Center for
Entrepreneurship,
IAE Business School
Universidad Austral
Australian
Centre for
Entrepreneurship
Research,
Queensland
University of
Technology
SINFIC –
Sistemas de
Informação
Industriais,
S.A.
MORI
Argentina
Q&A Market
Research
augustomedina@spi.pt
SCarbonell@iae.edu.ar
per.davidsson@qut.edu.au
Augusto Medina
Douglas Thompson
Sara Medina
João Rodrigues
Nuno Gonçalves
Silvia Torres Carbonell
Aranzazu Echezarreta
Juan Martin Rodriguez
Per Davidsson
Michael Stuetzer
Paul Steffens
Marcello Tonelli
Banco de Fomento Angola (BFA)
Center for Entrepreneurship,
IAE Business School,
Universidad Austral
Banco Santander Rio
Subsecretaría de Desarrollo
Económico, Ministerio de
Desarrollo Económico -
Gobierno de la Ciudad de
Buenos Aires
Queensland University of
Technology
Continued
Manuel Alves da Rocha
Salim Abdul
Valimamade
GEM Global Report 2010
68
Continued
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Belgium
Bosnia and
Herzegovina
Bolivia
Brazil
Chile
Regional Teams:
Arica y
Parinacota
Tarapacá
Antofagasta
Atacama
Coquimbo
Valparaíso
Vlerick Leuven
Gent Management
School
Entrepreneurship
Development
Centre Tuzla
(in partnership
with University of
Tuzla)
Universidad
Católica Boliviana/
Maestrías para el
Desarrollo
IBQP - Instituto
Brasileiro da
Qualidade e
Produtividade
Universidad del
Desarrollo
Univ. de Tarapacá
Corporación
Privada para el
Desarrollo de la
Univ. Arturo Prat
Univ. Católica del
Norte
Agencia Regional
de Desarrollo
Productivo
Atacama
Univ. Católica del
Norte
Univ. Técnica
Federico Santa
María
Dedicated
Research
PULS d.o.o.
Sarajevo
CIES
Internacional
Bonilha
Comunicação
e Marketing
S/C Ltda.
Opina S.A.
info@gemconsortium.org
ofce@cerpod-tuzla.org
maf@mpd.ucb.edu.bo
simara@ibqp.org.br
eamoros@udd.cl
Jan Lepoutre
Hans Crijns
Miguel Meuleman
Bahrija Umihanic
Rasim Tulumovic
Sladjana Simic
Mirela Arifovic
Boris Curkovic
Esmir Spahic
Admir Nukovic
José Ernesto Amorós
Carlos Poblete
Vesna Karmelic
Mauricio Vega
Gianni Romaní
Omar Gonzalez
Rodrigo Basco
Karla Soria
Cristóbal Fernández
Jorge Cea Valencia
Juan Tapia
Policy Research Centre
Entrepreneurship and
International Entrepreneurship,
Flemish Government
Federal Ministry of Development,
Entrepreneurship and Crafts
Municipality of Tuzla
Ministry of Education, Science,
Culture and Sports of Tuzla
Canton
FAUTAPO
SOBOCE S.A.
CAF
Embajada de Dinamarca
USAID/Proyecto Productividad y
Competitividad Bolivia
Universidad Católica Boliviana
FUNDAPRO
AVINA-RBE
Serviço Brasileiro de Apoio às
Micro e Pequenas Empresas –
SEBRAE
Serviço Nacional de
Aprendizagem Industrial - SENAI
/ PR
Serviço Social da Indústria - SESI
/ PR
Universidade Federal do Paraná
-UFPR
InnovaChile de CORFO
Área Emprendimiento, Liderazgo
y TIC´s de la Universidad de
Tarapacá
Gobierno Regional de Tarapacá
Universidad Católica del Norte,
DGIP.
Gobierno Regional,
Agencia Regional Desarrollo
Productivo.
CORFO, Agencia regional de
Desarrollo Productivo.
Universidad Católica del Norte,
Departamento de Industrias
y Centro de Ingeniería de
Mercados, CIMER, de la Univ.
Técnica Federico Santa María
El Mercurio de Valparaíso
Marco Antonio
Fernández C.
Gover Barja
Gonzalo Chavez
Simara Maria de S.S.
Greco
Romeu Herbert
Friedlaender Jr.
Joana Paula Machado
Eliane Cordeiro de
Vasconcellos Garcia
Duarte
69
GEM National Teams 2010
Continued
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Chile
Regional Teams:
Metropolitana
Libertador
Bernardo
O’Higgins
Maule
Bío-Bío
Araucanía
China
Colombia
Costa Rica
Croatia
Denmark
Univ. Mayor
Corporación de
Desarrollo Pro
O’Higgins
Univ. Católica del
Maule
Univ. Católica
de la Santísima
Concepción
Univ. del
Desarrollo
Univ. de la
Frontera
-INCUBATEC
Tsinghua
University SEM
Universidad del
Norte
Ponticia
Universidad
Javeriana Cali
Universidad de los
Andes
Universidad Icesi
Asociación
Incubadora Parque
Tec (PARQUE TEC)
Universidad de
Costa Rica (UCR)
Cámara de
Industrias de Costa
Rica (CICR)
J.J. Strossmayer
University in Osijek
University of
Southern Denmark
SINOTRUST
International
Information
& Consulting
(Beijing) Co.,
Ltd.
Centro
Nacional de
Consultoría
IPSOS
Central
America
Puls, d.o.o.,
Zagreb
Catinet
gaoj@sem.tsinghua.edu.cn
qinl2.04@sem.tsinghua.edu.cn
mgomez@uninorte.edu.co
mlebendiker@parquetec.org
ppetry@parquetec.org
rafael.herrera@ucr.ac.cr
gvelasquez@cicr.com
singer@efos.hr
tsc@sam.sdu.dk
Cristina Betancour
Braulio Guzmán,
Aracelly Tapia
Andrés Valenzuela,
Alejandro Sottolichio
Jorge Espinoza
José Ernesto Amorós
Carlos Poblete
Gerardo Lagos
Gao Jian
Qin Lan
Jiang Yanfu
Cheng Yuan
Li Xibao
Liyis Gómez Núñez
Piedad Martinez Carazo
César Figueroa
Fernando Pereira
Alberto Arias
Raúl Fernando Quiroga
Rafael Augusto Vesga
Diana Carolina Vesga
Rodrigo Varela Villegas
Luis Miguel Álvarez
Marcelo Lebendiker
Fainstein
Petra Petry
Rafael Herrera González
Guillermo Velásquez
López
Slavica Singer
Natasa Sarlija
Sanja Pfeifer
Thomas Schøtt
Torben Bager
Kim Klyver
Hannes Ottossen
Kent Wickstrom Jensen
Majbrit Rostgaard Evald
Suna Løwe Nielsen
Mick Hancock
Mette Søgaard Nielsen
Universidad Mayor
Corporación de Desarrollo Pro
O’Higgins
Universidad Católica del Maule
UCSC-Facultad de Ciencias
Económicas y Adminitrativas
UDD-Facultad de Economía y
Negocios.
Dirección de Innovación y
Transferencia Tecnológica de la
Universidad de La Frontera
SEM Tsinghua University
Universidad del Norte
Ponticia Universidad Javeriana
Cali
Universidad de los Andes
Universidad Icesi
-Banco Interamericano de
Desarrollo / FOMIN
-GTZ / Programa Desarrollo
Económico Sostenible en
Centroamérica (DESCA)
-Banco Centroamericano de
Integración Económica (BCIE)
-Fundación CRUSA
-Asociación Incubadora Parque Tec
Ministry of Economy, Labour and
Entrepreneurship
SME Policy Centre – CEPOR,
Zagreb
J.J. Strossmayer University in Osijek
– Faculty of Economics, Osijek
Foundation for Entrepreneurship
Juan David Soler
Libreros
Suncica Oberman
Peterka
Djula Borozan
GEM Global Report 2010
70
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Ecuador
Egypt
Finland
France
Germany
Ghana
Greece
Guatemala
Escuela Superior
Politécnica del
Litoral (ESPOL)-
ESPAE Graduate
School of
Management
The British
University in Egypt
(BUE)
Egyptian
Junior Business
Association (EJB)
Middle East
Council for Small
Businesses and
Entrepreneurship,
(MCSBE)
Turku School
of Economics,
University of Turku
EMLYON Business
School
Leibniz University
of Hannover
and Federal
Employment Agency
(BA) – Institute
for Employment
Research (IAB)
Institute of
Statistical, Social
and Economic
Research,
University of
Ghana
Foundation for
Economic and
Industrial Research
(IOBE)
Francisco
Marroquín
University
Survey Data
AC Nielsen
Taloustutkim
us Oy
CSA
Zentrum fuer
Evaluation
und Methoden
(ZEM), Bonn
Datapower SA
Pablo Pastor
mlasio@espol.edu.ec
hala.hattab@bue.edu.eg
anne.kovalainen@tse.
gemfrance@em-lyon.com
sternberg@wigeo.uni-
hannover.de
aryeetey@ug.edu.gh
ioannides@iobe.gr
rmaul@ufm.edu
Virginia Lasio
Ma. Elizabeth Arteaga
Guido Caicedo
Hala Hattab
David Kirby
Amr Gohar
Mohamed Ismail
Sherin El-Shorbagi
Lois Stevenson
Khaled Farouq
Anne Kovalainen
Pekka Stenholm
Tommi Pukkinen
Jarna Heinonen
Olivier Torres
Danielle Rousson
Rolf Sternberg
Udo Brixy
Christian Hundt
Arne Vorderwülbecke
Ernest Aryeetey
George Owusu
Paul W. K. Yankson
Robert Osei
Kate Gough
Thilde Langevang
Stavros Ioannides
Aggelos Tsakanikas
Stelina Chatzichristou
Hugo Maúl
Mónica de Zelaya
David Casasola
Georgina Tunarosa
Lisardo Bolaños
Irene Flores
Fritz Thomas
Jaime Diaz
Escuela Superior Politécnica del
Litoral (ESPOL)
Survey Data
Industrial Modernization Center,
Ministry of Trade & Industry
Ministry of Employment and the
Economy
Turku 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
71
GEM National Teams 2010
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Hungary
Iceland
Iran
Ireland
Israel
Italy
Jamaica
Japan
University of Pécs,
Faculty of
Business and
Economics
George Mason
University
Indiana University
Reykjavik
University
University of
Tehran
Dublin City
University
The Ira Center for
Business,
Technology &
Society, Ben
Gurion University
of the Negev
EntER - Bocconi
University
University of
Technology,
Jamaica
Keio University
Szocio-Gráf
Piac-és
Közvélemény-
kutató
Intézet
Capacent
Gallup
Dr.
Mohammad
Reza Zali
IFF
The
Brandman
Institute
Target
Research
KOCI Market
Research and
Data Mining
Services
Social Survey
Research
Information
Co.,Ltd
(SSRI)
szerb@ktk.pte.hu
rjs@ru.is
esut1@ut.ac.ir
paula@tzsimons-
consulting.com
ehudm@bgu.ac.il
ehudm@exchange.bgu.ac.il
giovanni.valentini@
unibocconi.it
gboodraj@utech.edu.jm
isobe@kbs.keio.ac.jp
László Szerb
Zoltán J. Ács
Attila Varga
József Ulbert
Gábor Márkus
Attila Petheő
Dietrich Péter
Siri Terjesen
Abbas Bazargan
Caro Lucas
Nezameddin Faghieh
A .A. Moosavi-Movahedi
Leyla Sarfaraz
A. Kordrnaeij
Jahangir Yadollahi Farsi
M.Ahamadpour Daryani
S. Mostafa Razavi
Mohammad Reza Zali
Paula Fitzsimons
Colm O’Gorman
Ehud Menipaz
Yoash Avrahami
Miri Lerner
Yossi Hadad
Miri Yemini
Dov Barak
Harel Yedidsion
James Hayton
Giovanni Valentini
Girjanauth Boodraj
Vanetta Skeete
Mauvalyn Bowen
Joan Lawla
Takehiko Isobe
OTKA Research Foundation
theme number K 81527
George Mason University
University of Pécs, Faculty of
Business and Economics
Budapest Corvinus University,
Doctorol School of Business
Széchenyi 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 Technology
Encouragement Centre (ATEC) in
the Negev
College of Business and
Management, University of
Technology, Jamaica
Venture Enterprise Center
Ministry of Economy, Trade and
Industry
Continued
Rögnvaldur J.
Sæmundsson
Hannes Ottóson
Mohammad Reza
Sepehri
Marcia McPherson-
Edwards
Horace Williams
GEM Global Report 2010
72
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Korea
Latvia
Macedonia
Malaysia
Mexico
Montenegro
Netherlands
Jinju National
University
The TeliaSonera
Institute at the
Stockholm School
of Economics
in Riga
University
“Ss. Cyril and
Methodius” –
Business Start-Up
Centre
Macedonian
Enterprise
Development
Foundation
(MEDF)
University Tun
Abdul Razak
Tecnológico de
Monterrey
University of
Montenegro
EIM Business and
Policy Research
Hankook
Research Co.
SKDS
Brima Gallup
Rehanstat
Alduncin y
Asociados
Damar DOO
Podgorica
Stratus
ssbahn@jinju.ac.kr
olga@biceps.org
radepole@mf.edu.mk
roland@unirazak.edu.my
marciac@itesm.mx
dragan.lajovic@irfcg.me
joh@eim.nl
Sung-sik Bahn
Sanggu Seo
Kyung-Mo Song
Dong- hwan Cho
Jong-hae Park
Min-Seok Cha
Olga Rastrigina
Anders Paalzow
Alf Vanags
Vyacheslav Dombrovsky
Radmil Polenakovik
Tetjana Lazarevska
Lazar Nedanoski
Gligor Mihailovski
Marija Sazdevski
Bojan Jovanovski
Trajce Velkovski
Aleksandar Kurciev
Bojan Jovanoski
Igor Nikoloski
Ljupka Mitrinovska
Roland Xavier
Leilanie Mohd Nor
Dewi Amat Sepuan
Mohar Yusof
Marcia Campos
Arturo Torres
Elvira Naranjo
Dragan Lajovic
Milorad Jovovic
Tamara Backovic
Stana Kalezic
Olja Stankovic
Radmila Damjanovic
Milos Raznatovic
Irena Peric
Nada Radovanic
Ivana Zecevic
Ana Sebek
Stevan Karadaglic
Miljan Sestovic
Jolanda Hessels
Chantal Hartog
Sander Wennekers
André van Stel
Roy Thurik
Philipp Koellinger
Peter van der Zwan
Ingrid Verheul
Niels Bosma
Small and Medium Business
Administration (SMBA)
Korea Aerospace Industries, Ltd.
(KAI)
Kumwoo Industrial Machinery, Co.
Hanaro Tech Co., Ltd.
Taewan Co., Ltd.
TeliaSonera AB
Macedonian Enterprise
Development 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 Economy
Montenegro
Ministry of Economic Affairs,
Agriculture and Innovation
Continued
73
GEM National Teams 2010
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Norway
Pakistan
Palestine
Peru
Portugal
Regional Team:
Azores
Romania
Russia
Bodø Graduate
School of Business
Institute of Business
Administration
(IBA), Karachi
The Palestine
Economic Policy
Research Institute
-MAS
Universidad ESAN
SPI Ventures
Universidade dos
Açores (UAC)
SPI Ventures
Babes-Bolyai
University, Faculty
of Economics and
Business
Administration
Saint Petersburg Team
Graduate School of
Management, Saint
Petersburg
Moscow Team
State University -
Higher School of
Economics, Moscow
TNS Gallup
Oasis
International
The Palestine
Central
Bureau of
Statistics
(PCBS)
Imasen
GfKMetris
(Metris –
Métodos de
Recolha e
Investigação
Social, S.A.)
Metro Media
Transilvania
Levada-
Center
lars.kolvereid@hibo.no
sarfraz.mian@
oswego.edu
info@pal-econ.org
jserida@esan.edu.pe
augustomedina@spi.pt
dumitru.matis@econ.
ubbcluj.ro
lehel.gyorfy@econ.
ubbcluj.ro
verkhovskaya@gsom.pu.ru
achepurenko@hse.ru
Lars Kolvereid
Erlend Bullvåg
Bjørn-Willy Åmo
Terje Mathisen
Eirik Pedersen
Sarfraz A. Mian
Arif I. Rana
Zafar A. Siddiqui
Shahid Raza Mir
Shahid Qureshi
Samir Abdullah
Yousef Daoud
Tareq Sadeq
Muhannad Hamed
Alaa Tartir
Jaime Serida
Oswaldo Morales
Keiko Nakamatsu
Liliana Uehara
Augusto Medina
Douglas Thompson
Sara Medina
João Rodrigues
Nuno Gonçalves
Matiş Dumitru
Nagy Ágnes
Györfy Lehel-Zoltán
Pete Ştefan
Benyovszki Annamária
Petru Tünde Petra
Szerb László
Mircea Comşa
Ilieş Liviu
Szász Levente
Matiş Eugenia
Olga Verkhovskaya
Maria Dorokhina
Galina Shirokova
Alexander Chepurenko
Olga Obraztsova
Tatiana Alimova
Maria Gabelko
Kate Murzacheva
Ministry of Trade and Industry
Innovation Norway
Kunnskapsparken Bodø AS,
Center for Innovation and
Entrepreneurship
Kunnskapsfondet Nordland AS
Bodø Graduate School of
Business
U.S. Agency for International
Development.
Centre for Entrepreneurial
Development, IBA, Karachi.
LUMS, Lahore
Babson College, USA
Arab Fund for Economic & Social
Development
Palestinian National Authority
(PNA)
Universidad ESAN
IAPMEI (Instituto de Apoio às
Pequenas e Médias Empresas e à
Inovação)
FLAD (Fundação Luso-
Americana para o
Desenvolvimento)
Governo Regional dos Açores
(Secretaria Regional da
Economia)
PROCONVERGENCIA
Babeş-Bolyai University, Faculty
of Economics and Business
Administration
Graduate School of Management
at Saint Petersburg State
University
State University - Higher School
of Economics
Ministry of Economic
Development of Russian
Federation
Continued
Gualter Manuel
Medeiros do Couto
João Crispim Borges
da Ponte
Nélia Cavaco Branco
GEM Global Report 2010
74
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Saudi Arabia
Slovenia
South Africa
Spain
Regional Teams:
Andalucía
Asturias
Aragón
Basque Country
Canary Islands
Cantabria
The National
Entrepreneurship
Center
Alfaisal University
Institute for
Entrepreneurship
and Small Business
Management,
Faculty of
Economics &
Business,
University of
Maribor
The UCT Centre
for Innovation and
Entrepreneurship,
Graduate School of
Business,
University of Cape
Town
Instituto de
Empresa
Universidad de
Cádiz
Univ. De Oviedo
Univ. de Zaragoza
Orkestra
Univ. De Deusto
Univ. Basque
Country
Univ. Mondragón
Universidad de Las
Palmas de Gran
Canaria
& Universidad de
La Laguna
Univ. De Cantabria
Cátedra Pyme de
la Universidad de
Cantabria
IPSOS
RM PLUS
Nielsen South
Africa
Instituto
Opinòmetre
S.L.
munira@tcf.org.sa
rebernik@uni-mb.si
mike.herrington@gsb.uct.
ac.za
juanjose.guemes@ie.edu
Munira A. Alghamdi
Hazbo Skoko
Norman Wright
Ricardo Santa
Wafa Al Debasi
Miroslav Rebernik
Polona Tominc
Ksenja Pušnik
Katja Crnogaj
Mike Herrington
Jacqui Kew
Penny Kew
Juan José Güemes
Ignacio de la Vega
Alicia Coduras
Rafael Pampillón
Cristina Cruz
Rachida Justo
Ricardo Hernández
April Win
José Ruiz Navarro
Enrique Loredo
Lucio Fuentelsaz
Iñaki Peña
Rosa M. Batista Canino
Fco. Javier Martínez
The Centennial Fund/National
Entrepreneurship Center
Ministry of the Economy
Slovenian Research Agency
Finance – Slovenian Business
Daily
Swiss South African Cooperation
Initiative (SSACI)
Services SETA
Small Enterprise Development
Agency (SEDA)
DGPYMES
IE Business School
Junta de Andalucía
Gob. del Principado de Asturias
Gob. de Aragón
Dpto, Industria, Comercio y
Turismo
Instituto Aragones Fomento
Consejo Aragones Cámaras de
Comercio
Eusko Ikaskuntza
SPRI, Gobierno Vasco
Diputación Foral Álava
Diputación Foral Bizkaia
Diputación Foral Gipuzkoa
Fundación Emilio Soldevilla
La Caja de Canarias
Gobierno de Canarias,
Promoción
Económica y Servicio Canario
de Empleo
Fondo Social Europeo
Santander
Gob. Regional Cantabria.
Consejería de Economía y
Hacienda
Grupo Sordecan
Fundación UCEIF
Continued
75
GEM National Teams 2010
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Spain
Regional Teams:
Catalonia
Ceuta
C. Valenciana
Extremadura
Galicia
Madrid City
Murcia
Navarra
Sweden
Switzerland
DEMOSKOP
gfs Bern
pontus.braunerhjelm@
entreprenorskapsforum.se
rico.baldegger@hefr.ch
Carlos Guallarte
Yancy Vaillant
Lázaro Rodríguez
Mª del Mar Fuentes
José Mª Gómez Gras
Ricardo Hernández
Juan Carlos Díaz
Araceli de Lucas
Iñaki Ortega
Antonio Aragón
Alicia Rubio
Cristina García
Pontus Braunerhjelm
Ulrika Stuart Hamilton
Mikael Samuelsson
Kristina Nyström
Per Thulin
Rico J. Baldegger
Andreas A. Brülhart
Mathias J. Rossi
Patrick E. Schüffel
Thomas Straub
Sabine Frischknecht
Muriel Berger
Verena Huber
Diputació de Barcelona: Àrea
de Desenvolupament Econòmic
Generalitat de Catalunya:
Departament de Treball
PROCESA
Air Nostrum
IMPIVA
Junta Extremadura, Univ.
De Extremadura, Central
Nuclear Almaraz, Soex,
Arram Consultores, CCOO
U.R Extremadura, Urvicasa
Caja Rural de Extremadura,
Palicrisa Fundación Academica
Europea de Yuste. Fomento de
Emprendedores, Grupo Alfonso
Gallardo, Infostock Europa
Extremadura, Cámara Comercio
Cáceres. UGT Extremadura, El
Periódico Extremadura, Hoy
Diario de Extremadura, Fomento
Emprendedores, Infocenter,
Ogesa, Hotel Huerta Honda
Confederación Empresarios
Galicia (CEG)
CEEI Galicia SA (BIC Galicia)
Universidad de Santiago de
Compostela
Caja Madrid
Ayuntamiento de Madrid
Fundación Caja Murcia
Consejería de Economía,
Empresa e Innovación
Instituto Fomento región de
Murcia
Centro Europeo de Empresas e
innovación de Murcia
Univ. Murcia
Gobierno de Navarra, Servicio
Navarro de Empleo
Vinnova
CECIS
Confederation of Swedish
Enterprise
KTI /CTI (Conferderation’s
Innovation Promotion Agency)
School of Business Administration
(HEG-FR) Fribourg
Universidad
Autónoma de
Barcelona
Universidad de
Granada
Univ. Miguel
Hernández
Fundación Xavier
de Salas
Univ. De
Extremadura
Confederación de
Empresarios de
Galicia (CEG)
CEEI Galicia, SA
(BIC Galicia)
Universidad
de Santiago de
Compostela
IEBS
Univ. de Murcia
Centro Europeo
de Empresas e
Innovación de
Navarra
Servicio Navarro
de Empleo.
Swedish
Entrepreneurship
Forum
School of Business
Administration
(HEG-FR)
Fribourg
Continued
GEM Global Report 2010
76
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Taiwan
Trinidad and
Tobago
Tunisia
Turkey
Uganda
United Kingdom
United States
National Chengchi
University
China Youth Career
Development
Association
Headquarters
(CYCDA)
Arthur Lok Jack
Graduate School
of Business,
University of the
West Indies
Institut des
Hautes Etudes
Commerciales -
Sousse
Yeditepe University
Makerere
University Business
School (MUBS)
Aston University
Babson College
NCCU Survey
Center
Optima
Akademetre
Makerere
University
Business
School
IFF Research
Ltd.
Opinion
Search Inc.
jtwen@nccu.edu.tw
K.Murdock@gsb.tt
Faysal.mansouri@
yahoo.fr
ekaradeniz@yeditepe.
edu.tr
rybekaz@yahoo.com
mark.hart@aston.ac.uk
jdecastro@babson.edu
Chao-Tung Wen
Chang-Yung Liu
Su-Lee Tsai
Yu-Ting Cheng
Yi-Wen Chen
Ru-Mei Hsieh
Chung-Min Lo
Li-hua Chen
Shih-Feng Chou
Karen Murdock
Miguel Carillo
Colin McDonald
Faysal Mansouri
Lot Belkacem
Esra Karadeniz
Rebecca Namatovu
Warren Byabashaija
Arthur Sserwanga
Sarah Kyejjusa
Wasswa Balunywa
Peter Rosa
Julio DeCastro
I. Elaine Allen
Abdul Ali
Candida Brush
William D. Bygrave
Marcia Cole
Lisa Di Carlo
Julian Lange
Moriah Meyskens
John Whitman
Edward Rogoff
Monica Dean
Thomas S. Lyons
Joseph Onochie
Ivory Phinisee
Al Suhu
Small and Medium Enterprise
Administration, Ministry of
Economic Affairs
Arthur Lok Jack Graduate
School of Business, University of
the West Indies
GTZ – Programme d’Appui
à l’Entrepreneuriat et à
l’Innovation
Union of Chambers and
Commodity Exchanges of Turkey
(TOBB)
Danish Research Council
Makerere University Business
School
Department for Business,
Innovation and Skills (BIS)
ONE North East
Welsh Assembly Government
Enterprise UK
PRIME
Birmingham City Council
Aston Business School
Hunter Centre for
Entrepreneurship, University of
Strathclyde
Babson College
Baruch College
Continued
Mark Hart
Jonathan Levie
Michael Anyadike-
Danes
Yasser Ahmad Bhatti
Aloña Martiarena
Arrizabalaga
Mohammed Karim
Liz Blackford
Erkko Autio
Alpheus Tlhomole
77
GEM National Teams 2010
Team Institution National Team
Members Financial Sponsors APS Vendor Contact
Uruguay
Vanuatu
Zambia
GEM Global
Coordination
Team
University of
Montevideo
UNITEC
University of
Zambia
Equipos
Mori
UNITEC
New Zealand
Department of
Development
Studies,
University of
Zambia
lveiga@um.edu.uy
msolomona@unitec.ac.nz
rdavis@unitec.ac.nz
fchigunta@yahoo.co.uk
info@gemconsortium.org
Leonardo Veiga
Adrián Edelman
Pablo Regent
Fernando Borraz
Alvaro Cristiani
Cecilia Gomeza
Robert Davis
Malama Solomona
Asoka Gunaratne
Judith King
Andrina Thomas-Lini
Francis Chigunta
Valentine Mwanza
Moonga Mumba
Mulenga Nkula
Kristie Seawright
Mick Hancock
Yana Litovsky
Chris Aylett
Jackline Odoch
Marcia Cole
Jeff Seaman
Niels Bosma
Alicia Coduras
University of Montevideo
Banco Santander Uruguay
AusAID
UNITEC New Zealand
Danish Research Council
GEM Global Report 2010
78
About the Authors
Donna J. Kelley
Donna Kelley is an associate professor of entrepreneurship at Babson College, and holds the Frederic C.
Hamilton chair of free enterprise. She received her Ph.D. in management from Rensselaer Polytechnic Insti-
tute. Her research has been published in the Journal of Business Venturing, Entrepreneurship: eory and
Practice, Journal of Product Innovation Management, Human Resource Management and others. Donna’s
early career involved work as a chemist and her entrepreneurship experience includes founding a health fitness
business and joining the management team of a computer hardware start-up. She was also a founding team
member, and a founding board member, of a Chinese immersion public charter school. She is a board member
of the Global Entrepreneurship Research Association.
Niels Bosma
Niels Bosma is a member of the Urban and Regional Research Center Utrecht, section of economic
geography, Utrecht University. He has been involved in the GEM project since 2001 and is research director
for GERA, the umbrella organization that hosts the GEM project. He has a Ph.D. in economic geography
from Utrecht University and an MSc in econometrics from the University of Groningen. He has published
several articles in entrepreneurship and economic geography journals. His new GEM-based book entitled
e Geography of Entrepreneurial Activity and Regional Development; A Multilevel Perspective Applied to
European Regions will be forthcoming in 2011.
José Ernesto Amorós
José Ernesto Amorós is the associate dean of research and director of the Global Entrepreneurship Re-
search Center at Economics and Business School, Universidad del Desarrollo, Santiago, Chile. He is the co-
ordinator and main researcher of Chile’s GEM project and member of the GEM Board and GEM´s research
committee. He holds a Ph.D. in management sciences from ESADE Business School, Spain and was a World
Bank-CONICYT postdoctoral research fellow at the Universidad Adolfo Ibáñez, Chile. He has a bachelor’s
degree in business administration and MSc in marketing from Monterrey’s Institute of Technology, Mexico.
His research was published in international journals, book chapters and several monograph and reports in
Spanish and English.
79
GEM Sponsors
GERA and GEM
e Global Entrepreneurship Research Association (GERA) is, for constitutional and regulatory purposes,
the umbrella organization that hosts the GEM project. GERA is an association formed of Babson College, Lon-
don Business School and representatives of the Association of GEM national teams.
e GEM program is a major initiative aimed at describing and analyzing entrepreneurial processes within
a wide range of countries. e program has three main objectives:
• To measure differences in the level of entrepreneurial activity between countries
• To uncover factors leading to appropriate levels of entrepreneurship
• To suggest policies that may enhance the national level of entrepreneurial activity.
New developments, and all global, national and special topic reports, can be found at
www.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 Founding
Institution. 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 of Business at Babson College.
Babson Executive Education offers executive development programs to experienced managers worldwide.
For information, visit www.babson.edu.
Universidad del Desarrollo
The Universidad Del Desarrollo (UDD) Educational project was driven by outstanding leaders of
the Chilean public and business scene, and is today one of the top three prestigious private universi-
ties in Chile. Success came quickly; after just 20 years, its rapid growth has become an expression of the
University’s main facet: entrepreneurship. The UDD M.B.A program is rated one of the best in Latin
America 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 of the
University. For more information visit www.udd.cl.
GEM Global Report 2010
80
Contacts
For more information on this report, contact Donna J. Kelley at dkelley@babson.edu; Niels Bosma at nbos-
ma@gemconsortium.org; or José Ernesto Amorós at eamoros@udd.cl.
To download copies of the GEM Global Report(s), GEM National Team Reports and to access select data
sets, 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 information by e-mailing the Executive Director, Kristie Seawright at kseawright@gemconsortium.org.
81
Notes and References
i ese percentages are based on IMF´s World Economic Outlook Database, October 2010 and USA Bu-
reau of Census.
ii Schwab, Klaus, ed. e Global Competitiveness Report 2010–2011. Geneva: World Economic Forum, 2010.
iii e World Bank. Doing Business 2010. Washington, D.C.: e International Bank for Reconstruction and
Development/e World Bank, 2010.
iv Porter, M.E., J.J. Sachs and J. McArthur. “Executive Summary: Competitiveness and Stages of Economic
Development.” In e 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: Oxford University Press, 2002.
v Gries, T. and W. Naude. (2010). “Entrepreneurship and Structural Economic Transformation,” In Small
Business Economics, 34(1): 13–29.
vi Henrekson, M. (2005). “Entrepreneurship: A weak link in the welfare state”. In Industrial and Corporate
Change, 14(3): 437–467.
vii For more information on associations between employment protection and entrepreneurship activity see
Bosma, 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 Reykjavík
University; 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 four years. is is the main rationale for the choice
of 42 months as the cut-off period. However, the choice of 42 months also reflects operational issues. Accord-
ing to Reynolds et al., “e relevant interview question asked only the year when salary and wage payments
were initiated and most surveys occurred in the summer months; so the alternatives for choosing a “new firm
age” were 1.5 years, 2.5 years, 3.5 years, etc. e shortest time frame that would provide enough cases for stable
prevalence rates with a total sample of 2,000 seemed to occur at 3.5 years. Conceptually, any time period under
GEM Global Report 2010
82
five years seemed satisfactory so this age was considered an appropriate trade-off between conceptual and
operational considerations in the early years of the project. ere has been no compelling reason to adjust this
criteria and a desire for a stable time series has led to its continued use. It should be considered a procedure to
capture existing firms less than three or four 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 design
and implementation 1998-2003”’. Small Business Economics, 24, 205-31.).
x “Statistical significance” refers to a calculation of where the range within which the average value of 95 out
of 100 replications of the survey would be expected to lie. is range showed in Figure 4 by vertical bars on
either side of each data point. If the ‘confidence intervals’ (denoted by the vertical bars) of two national TEA
rates do not overlap, the difference between the TEA rates is not statistically significant at the 0.05 level. Refer-
ence in this report to significant differences implies statistically significant difference at the 0.05 level.
xi Doing Business 2011: Making a Difference for Entrepreneurs. Washington, D.C.: e International Bank
for Reconstruction and Development/e World Bank.
xii See Kaufmann, D., A. Kraay, and M. Mastruzzi (2008). “Governance Matters VII: Aggregate and Individual
Governance Indicators, 1996–2007”. WB Policy Research Working Paper 4654. Washington, DC: World Bank.
xiii In order to get sufficient precision we required a minimum number of identified early-stage entrepre-
neurs of 250 in the 2008–2010 sample.
xiv See Birch, D. e Job Creation in America. New York: e Free Press, 1987.
xv For more information see Acs, Z.J. (2008). “Foundations of High Impact Entrepreneurship,” In Founda-
tions and Trends® in Entrepreneurship, 4(6), 535–620; and, Autio, E. (2007). Global Entrepreneurship Monitor
2007 Global Report on High-Growth Entrepreneurship. London, U.K: London Business School; and Babson
Park, MA: Babson College.
xvi For example: Baum, R., Locke, E., and Smith, K. (2001) “Multidimensional Model of Venture Growth.” In
e Academy of Management Journal, 44(2): 292–303. Wicklund, J. and Shepherd, D. (2003). “Aspiring for, and
Achieving Growth: e Moderating Role of Resources and Opportunities”. Journal of Management Studies
40(8):1919–1941.
xvii Schumpeter, J.A. e eory of Economic Development. Cambridge, MA: Harvard University Press, 1934.
xviii Baumol, W.J. Entrepreneurship, Management, and the Structure of Payoffs. Cambridge, MA: MIT Press., 1993.
xix Drucker, P. Innovation and Entrepreneurship: Practice and Principles. New York: Harper & Row, 1985.
xx e questionnaire was set-up by Erkko Autio and Jonathan Levie. During 1999–2007 the survey was
further developed by Erkko Autio. e expert surveys are now annually conducted by all national teams under
the guidance of Alicia Coduras and the GEM co-ordination team. e annual questionnaire has undergone
very minor changes in recent years.
xxi Teams select experts on the basis of reputation and experience, but also practical convenience. However,
they follow a strict protocol. At least four experts with specific knowledgeable in each of the nine EFCs make
up the total of 36 key informants. e respondents in each category consist of at least: one entrepreneur, two
suppliers of the EFC and one observer, such as an academic with specific expertise in the area. e teams
contact experts with a detailed explanation of the GEM project, and virtually all agree to participate. ey
complete the questionnaire and participate in interviews allowing for an open discussion of their views on
national contributions (strengths) and limitations (weaknesses) as a context for entrepreneurship. Addition-
83
Notes and References
ally, they identify specific factors that can enhance the level of entrepreneurship in their country. Each factor
is measured with multiple-item scales comprising three to seven questions. e standard NES survey has 88
questions with responses collected on a five-point Likert scale (where ‘‘1 = completely true’’ and ‘‘5 = com-
pletely false’’).
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 theoretical
grounding and test of the GEM model. Small Business Economics, 31(3), 235-263.
xxiii Baumol, W.J. (1990). “Entrepreneurship: Productive, Unproductive and Destructive.” Journal of Political
Economy, 98, 893–919.
xxiv Bosma, N., Stam, E. and Wennekers, S. (2010). Intrapreneurship—An International Study. EIM SCALES
Research Report H201005. Zoetermeer, Netherlands: EIM.
xxv e time series have been smoothed, giving the results in the year of reference a weight of 50% and the
results in (t-1) and (t+1) a weight of 25%. For the year 2009 there was no data available.
xxvi See also Koellinger P. and R. urik (2009). “Entrepreneurship and the Business Cycle,” Tinbergen In-
stitute Discussion Paper, TI 2009-032/3, Erasmus School of Economics, Erasmus University Rotterdam: EIM
Business and Policy Research; Zoetermeer, e Netherlands: Tinbergen Institute.
xxvii We required a minimum sample size of 3,500 (effectively meaning that countries should have partici-
pated at least twice in each time frame) and a minimum number of identified early-stage entrepreneurs of
200. All factor-driven economies that are now part of the GEM study were not included in the first and/or the
second time frame.
xxviii ese numbers are based on unweighted country averages, for the countries for which information was
available for 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: Háskólinn
Reykjavík University; and London, U.K.: Global Entrepreneurship Research Association.
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