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Developing Short-Term Business Dynamics Indicators for Entrepreneurship Policy

This document explores the need for real-time indicators of business births and deaths, proposing the use of Labour Force Surveys and Business Registers to improve international comparability and inform evidence-based entrepreneurship policies. Advantages and disadvantages of these sources are discussed, along with recommendations for future steps.

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Developing Short-Term Business Dynamics Indicators for Entrepreneurship Policy

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  1. Entrepreneurship Indicators Steering GroupDEVELOPING SHORT-TERM INDICATORS OF BUSINESS DYNAMICS BUSINESS BIRTHS AND DEATHSNadim AhmadJulia GauchOECD Statistics Directorate June 25, 2007 Istanbul, Turkey

  2. Overview • Background information: The OECD/ Eurostat Framework on BD • A need for real time indicators • The OECD Proposal • Labour Force Surveys • Administrative Registers • Conclusions and future steps

  3. The OECD/Eurostat Business demography Framework • Importance of business births and deaths for policy makers and entrepreneurship • Inform evidence based entrepreneurship policy • Main purpose of the BD OECD/Eurostat Framework: Improve international comparability of business births and deaths. • However, partial picture of entrepreneurship in real time.

  4. A need for real time indicators • Weakness of indicators based on Business registers: Data available 2 or 3 years after the reference period • Limit to measure of entrepreneurship in real time. • Need for complementary initiatives. Need to develop more timely indicators • 2 OECD initiatives

  5. The OECD Proposal: Labour Force Surveys • Source of information for the labour market • Source of information for entrepreneurship policies (stock of self-employment ) • EIM and the COMPENDIA database: - Measure of business ownership. - Based on harmonised data from the OECD Labour Force Survey - 23 OECD countries. • Collaboration OECD/EIM: - Improve the quality of data -Encourage more disaggregation by sector • Source of information for business births and deaths

  6. The use of LFSs for short term business births and deaths indicators Advantages - Key advantage: Timely indicators - Possible to create dynamic variables analogous to self- employment births and deaths - Ability to link to entrepreneur characteristics Disadvantages - Unincorporated vs. incorporated self employed - Sample sizes small - Lack of harmonisation between LFSs

  7. The OECD Proposal: Business Registers • Produce short-term indicators from Business Registers • Establish a correlation between exists and entries from administrative sources and “pure” births and deaths from the BD Framework. • Possible to create short-term proxies of birth and deaths rates

  8. Conclusions and steps forward • Timeliness of LFS as the main advantage; disaggregated data. • Start for correlation has been established; further research is needed • Involvement of international bodies: OECD/ EIM and UNECE/ Eurostat/OECD Expert Group (2009)

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