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Entrepreneurship Indicators Project

This project aims to develop internationally comparable measures of entrepreneurship and identify the factors that enhance or impede it. It involves engaging countries and other participants, defining and measuring entrepreneurship, providing frameworks for indicators, and sharing examples of entrepreneurship indicators. The project is supported by the OECD, Kauffman Foundation, and the International Consortium for Entrepreneurship.

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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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