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Entrepreneurship Indicators Project

Entrepreneurship Indicators Project Developing Comparable Measures of Entrepreneurship and the Factors that Enhance or Impede It Tim Davis OECD Statistics Directorate Structural Business Statistics Meeting May 10/11, 2007, Paris. Entrepreneurship Indicators Project. Background

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Entrepreneurship Indicators Project

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  1. Entrepreneurship Indicators Project Developing Comparable Measures of Entrepreneurship and the Factors that Enhance or Impede ItTim Davis OECD Statistics DirectorateStructural Business Statistics Meeting May 10/11, 2007, Paris

  2. Entrepreneurship Indicators Project • Background • Fundamental Aims of the Project • Engaging Countries and Other Participants • Definitions and Measures • Frameworks for Entrepreneurship and for Indicators • Examples of Entrepreneurship Indicators • Forthcoming meetings • Key deliverables in 2007and 2008

  3. Background • Long history of OECD and other interest in E-Ship • Numerous OECD entrepreneurship studies • Explicit policy priority for virtually all countries • Little explicit “entrepreneurship” data at NSOs • Little sustained international statistical development • Asked to test feasibility of better international measures • Financial support and a push from: • Kauffman Foundation • International Consortium for Entrepreneurship (ICE)

  4. 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

  5. ICE Countries • Canada • Denmark • Finland • Netherlands • Norway • Sweden • United States • OECD

  6. Feasibility Study • Confusion regarding definitions/measures • Inadequacy or non-comparability of any single measure • Opinion surveys and case studies supply many indicators • Member-country interest and ‘support’ • Demand for internationally-comparable measures • Entrepreneurship • Determinants of entrepreneurship • Linked to Policy objectives • Relevant to policy tools available to countries • Many data gaps but also potential data sources

  7. Feasibility Study and Action Plan BUT • Will countries accept to harmonise data? • Will countries invest in data? • Cautious “Yes” voiced through Statistics Committee • With CSTAT support and additional Kauffman funding • Project launched in Fall 2006 • Important additional support from: • ICE Consortium • Denmark • OECD • Eurostat • Effectively…..a Joint OECD/Eurostat Project

  8. Fundamental Aims and Steps of the Project • 1. Measurement Manual: Standard definitions and measurement tools • 2. Compile and publish a Compendium on Entrepreneurship STEPS • Engage national and international bodies so that money and effort will be devoted to producing data • Establish Indicator Priorities: Identify data required by policy-makers to measure Entrepreneurship and underlying factors • Agree on definitions, methods and sources • Data collection from Statistical Business Registers • Partner with other data producers; Identify and assemble other data from existing sources • Develop, pilot and run (co-ordinate) new entrepreneurship surveys

  9. Engaging countries – and others – in the EIP • The Entrepreneurship Indicators Steering Group • Eurostat • Broadens European input; Implementation experience • Partner on Manuals and data collection • International Consortium on Entrepreneurship (ICE) • Committee on Industry, Innovation, Entrepreneurship • Working Party on SMEs and Entrepreneurship (OECD) • Strengthens Policy and Research inputs • Committee on Statistics (OECD) • Links to Entrepreneurship Research Bodies (EIM)

  10. Entrepreneurship Indicators Steering Group • “Informal Body” created by Stats Directorate and Committee • Sub-set of OECD countries + other experts • Statistical and entrepreneurship policy/research expertise • 1st Meeting: Dec 06 (Rome); 2nd Meeting: June 07 (Istanbul) • Still some membership gaps • Australia • Canada • Denmark • Finland • Germany • Hungary • Italy • Korea • Netherlands • Sweden • United Kingdom • United States • Eurostat • EU Commission-DG-ENT • OECD – CFE • World Bank • Kauffman Foundation

  11. 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 necessarily limited to new or small firms • Term is often (simplistically) applied to leaders, hard workers, innovators, any SME or anyone in business

  12. Entrepreneurship Definitions • Does a single, perfect definition exist? • And could it be measured? • Steering Group is developing an overarching definition • A conceptual description to guide choice of measures But • Statisticians want to leap ahead to the process • Break it down to measure inputs and outputs • If “entrepreneurship” is happening …….. …………….what is the measurable result?

  13. Fundamental or “Umbrella” Definitions • Broad by design: Vetting and approvals yet to come • Will accommodate numerous, specific policy goals and associated measures • The entrepreneur is the person who creates and exchanges value through the identification and employment of changes in resources, opportunities and/or innovation. • Entrepreneurship is the phenomena associated with the mindset, planning and activities that create and exchange value through the identification and employment of changes in resources, opportunities and/or innovation. • Entrepreneurial activity is the enterprising human action associated with the creation and exchange of value through the identification and employment of resources, opportunities and/or innovation.

  14. What is Entrepreneurship? - Measures For some: • It’s simply self-employment or creation of new firms • Assume more firm creation leads to more high growth But for others, including us, it is more: • Important to link to (OECD/EU) policy interests • Entrepreneurship is the process leading to the creation and growth of businesses • Must measure both creation and growth

  15. What is Entrepreneurship? - Measures Are policy-makers also interested in: • Entrepreneurship in existing – even old – firms ? • Take-overs, reactivations, transfers and transitions ? • Export behaviour ? Innovation by young firms ? • Initially, more measures are desirable • Clarity and comparability are key • Measures of entrepreneurship and its drivers

  16. Entrepreneurship Process: Demand and Supply Model External Factors influencing • Incentives • Culture/Motivation • Framework Conditions Entrepreneurship Performance Demand Opportunities Supply Abilities • Technology Transfer • Access to Market • Financial Capital • Social/Human Capital • Firm Creation • High-growth firms • Business Density

  17. Organising Indicators Several categories of Indicators: • Determinants or Framework Conditions for Entrepreneurship • Performance or Degree of Entrepreneurship • Impact of Entrepreneurship Also • 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

  18. Entrepreneurship Framework

  19. Indicator Priorities and Definitions • Ideally: Establish complete indicator list first • Schedule dictates simultaneous work • A Steering Group Task Force is defining indicators • While some data collection already under way • Manual Drafting Group is joint OECD/Eurostat activity • Joint Business Demography Manual • Joint Entrepreneurship Indicators Manual

  20. Indicator Examples: Entrepreneurship Performance • Firm start-up rates, by size category • Measures of high-growth firms ************************************************************************************************ • Firm survival rates • Business density • Degree of entry and exit “churn” • Business ownership; Self-employment • Innovation measures; Commercialisation of research • Attributes of the entrepreneurial firms

  21. Indicator Examples: Entrepreneurship Determinants • Access to financing • Entrepreneurship education • Taxation and incentives • Business infrastructure • Ease of entry • Administrative and regulatory burdens • Innovation and R&D • Access to technology • Re-start possibilities; Bankruptcy environment

  22. Entrepreneurship Indicators: Performance, Determinants, Impact

  23. Key Deliverables 2007/2008 Fall 2007 • High Growth Definitions and Measures (Seminar) • Risk Capital Definitions and Data sources December 2007 • Preliminary OECD-Eurostat Measurement Manual • Compendium of available indicators September 2008 • Measurement Manual • Compendium of Entrepreneurship Indicators 2007/2008 • Sponsorship and funding support

  24. Forthcoming Meetings and Activities June 2007 (Istanbul) • Entrepreneurship Indicators Steering Group • Workshop on Entrepreneurship Indicators at World Forum on Statistics, Knowledge and Policy Fall 2007 • Seminar on High Growth • Entrepreneurship Indicators Steering Group • ICE Consortium Meeting

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