Entrepreneurship Indicators Project
Developing Comparable Measures of Entrepreneurship and the
Factors That Enhance or Impede It
Tim Davis
OECD Statistics Directorate
Istat-Eurostat-OECD Seminar on Entrepreneurship Indicators
Rome, December 6/7, 2006
Entrepreneurship Indicators Project








Background
Fundamental Aims of the Project
Definition and Measurement Issues
Some Existing Measures and Issues
Setting Indicator Priorities
Examples of Entrepreneurship Indicators
Engaging Countries and Other Participants
Discussion and Decisions on initiatives by
Entrepreneurship Indicators Steering Group
2
Background
Entrepreneurship Indicators Project

Long history of OECD and other interest in E-Ship

Numerous OECD entrepreneurship studies
3
Entrepreneurship-Related Work at OECD

SMEs and Employment Creation, 1996

Fostering Entrepreneurship, (Jobs Strategy), 1998

Women Entrepreneurs in SMEs, 1998

Small Business, Job Creation and Growth, 1998

Impact of Product Market Regulation, 1999 and 2005

Linking Entrepreneurship to Growth, 2000

Business Views on Red Tape, 2001

Entrepreneurship and Local Development, 2003

Firm Demographics and Survival, 2003

Factors of Success and Statistical Strategies, 2002

Fostering Firm Creation and Entrepreneurship, 2004

Micro-Policies for Growth and Productivity, 2005
4
Background
Entrepreneurship Indicators Project

Long history of OECD and other interest in E-Ship

Numerous OECD entrepreneurship studies

Explicit policy priority for virtually all countries


Entrepreneurship programs in most countries
For:- Employment, growth and productivity
- Newly-developing market economies
- Target groups

Little explicit “entrepreneurship” data at NSOs

Little sustained international statistical development
5
Background
Entrepreneurship Indicators Project

Demand for data from OECD Ministerial in Istanbul

OECD created Centre for Entrepreneurship (CFE)
Feasibility Study

There are data gaps. There are potential data sources
Strong demand for harmonised definitions and data
Member-country interest and ‘support’



Financial support and a push from:
Kauffman Foundation
International Consortium for Entrepreneurship (ICE)
–
–
Will countries accept to harmonise? Invest in data?
Strong, cautious “YES” from OECD Statistics Committee

6
Fundamental Aims of the Project

Compile and publish a Compendium on Entrepreneurship
STEPS




Develop a Measurement Handbook: Framework, standard
definitions and measurement tools
Establish Indicator Priorities: Identify data required by
policy-makers to measure E-Ship and underlying factors
Develop Existing Data and Pilot survey questions
Engage national and international bodies so that money
and effort will be devoted to producing data
7
Advantages of OECD-Led International Survey

Policy-relevant statistics – driven by countries

Established fora for policy-statistics collaboration

Extensive network of key countries

Share methodological developments

Standard definitions, concepts

Economies of scale re: questionnaires, tools

Linkages to NSOs and Registers

Experience established through other international
measures (PISA, PIAAC)
8
What is Entrepreneurship? - Definitions
An attitude? A behaviour? A specific economic activity?
Numerous definitions exist:
“Ability to marshal resources to capitalize on opportunities”
 Willing to take risks, be innovative; exploit opportunities
None of these are limited to new or small firms
Term is often (incorrectly) applied to leaders, hard workers,
innovators, any SME or anyone in business
Should we include:
Entrepreneurship in existing – even old – firms
Are take-overs and transitions “entrepreneurship”?






9
What is Entrepreneurship? - Measures
For some:

It’s self-employment; the act of creating new firms

More firm creation leads to more high growth

Research shows that’s not true
But for others, including EIP, it is more:

Entrepreneurship is the process leading to the creation
and growth of businesses

Must measure both creation and growth

Distinguish self-employment; identify size class

Creation of firms not sole, or most important, objective
10
Existing Data
Little cross-national uniformity of data
GEM: broad coverage but limited firm information
World Bank: Entry Rates and “Doing Business”
Eurobarometer and European Observatory
EIM Compendium: Self-employment/SME data
Some national data sets
Eurostat FoBS; US (Kauffman) Surveys and Index
Well established firm survey in France; HHLD survey in UK
UK, Canadian, Eurobarometer surveys on SME financing
Numerous measures of ‘attitudes on entrepreneurship’
Business Demography: Eurostat, OECD










11
2003 Entrepreneurship rates
%
25.0
GEM
self employ-EIM
self employ-OECD
OECD - Birth rate
WB - Entry rate
20.0
15.0
10.0
5.0
at
es
St
ni
te
d
U
U
ni
te
d
Ki
ng
do
m
ed
en
Sw
Sp
ai
n
Ze
al
an
d
N
ew
nd
s
et
he
rla
N
Ita
ly
an
y
er
m
G
nc
e
Fr
a
Fi
nl
an
d
an
ad
a
C
Au
st
ra
l ia
0.0
12
%
2002/2001 Entrepreneurship rates variation
60
40
20
0
-20
-40
St
at
es
ni
te
d
Ki
U
ni
te
d
U
40
ng
do
m
ed
en
Sw
Sp
ai
n
et
he
rla
nd
s
N
ew
Ze
al
an
d
N
G
Ita
ly
er
m
nc
e
an
y
2003/2002 Entrepreneurship rates variation
Fr
a
Fi
nl
an
d
60
an
ad
a
%
C
Au
st
ra
lia
-60
GEM
self employ-EIM
self employ-OECD
OECD - Birth rate
WB - Entry rate
20
0
-20
-40
self employ-EIM
self employ-OECD
St
ni
te
d
U
Ki
ni
te
d
at
es
ng
do
m
ed
en
Sw
Sp
ai
n
Ze
al
an
d
N
OECD - Birth rate
U
GEM
ew
nd
s
et
he
rla
N
Ita
ly
an
y
G
er
m
nc
e
Fr
a
Fi
nl
an
d
an
ad
a
C
Au
st
ra
l ia
-60
13
WB - Entry rate
Setting Indicator Priorities

Several categories of Indicators:

Entrepreneurship Performance or Degree of E-Ship

Framework Conditions or Determinants of E-Ship

Attributes of entrepreneurs and entrepreneurial firms

Some indicators link to policy; e.g. Education

Others enhance knowledge and help target programs:
e.g. Age, Entrepreneurial Heredity
14
Entrepreneurship Performance Indicators

Firm start-up rates, by size category

Measures of high-growth firms
************************************************************************************************


Business ownership; Business density
Entrepreneurial activity (TEA):
– Population involved in business creation

Relative importance of SME sector

Growth in SME payrolls

Degree of entry and exit “churn”

Firm survival rates

Number of university spin-offs created
15
Framework Condition Indicators

Entrepreneurship education

Access to financing

Taxation and incentives

Innovation and R&D

Access to technology

Re-start possibilities; Bankruptcy environment

Ease of entry; Administrative burdens

Patents and patent productivity

Infrastructure and Quality of life
16
Attributes of Entrepreneurs

Demographic characteristics of entrepreneur

Citizenship, family history of entrepreneurship

Industry experience

Previous failures

Employment and financial characteristics
17
Engaging Participants to Move Forward

Overall direction through OECD Steering Group

All OECD countries involved through Statistics Committee

Close collaboration with Eurostat

Collaboration with other data providers:

–
World Bank, EIM (Netherlands)
–
Venture Capital and Private Equity Associations
Ongoing search for financial and intellectual support
18
Entrepreneurship Indicators Steering Group

Australia

Canada

Denmark

Finland

Germany

Italy

Korea

Netherlands

Hungary

UK

USA

European
Commission
19
Steering Group Meeting
Agreed to ambitious Work Programme

Task Force set up to refine definition of Entrepreneurship

Broad agreement on list of Indicators

Task Force to finalise initial set of core indicators

Inventory of Entrepreneurship Data sources for Fall 2007

Study on defining High Growth – March 2007

Study on data sources re Equity Finance – June ’07

Joint Eurostat/OECD Data Collection on Start-Up Rates;
High Growth firms
20
Steering Group Meeting

Work Programme (Continued)

Draft Measurement Handbook – Fall ‘07

Mini-Compendium of Entrepreneurship Indicators – Fall ‘07
Other initiatives:



Collaborate with EIM Research Group (Netherlands) on
Self-Employment; Business Ownership
Joint work with EIM on other Measures
Potential work with World Bank on new firm entry data
extending beyond OECD/Eurostat
21
To contact us:
[email protected]
Coordination and Equity Finance Project
[email protected]
High Growth Project and Start-Up Data
[email protected]
Project Manager
22