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Measuring Entrepreneurship New Indicators from the OECD-Eurostat Entrepreneurship Indicators Programme II Workshop on Entrepreneurship Indicators university of Huelva Huelva, Spain - Nov. 17-18, 2008 Tim Davis OECD Statistics Directorate. Overview. Why measure Entrepreneurship?

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Overview

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  1. Measuring Entrepreneurship New Indicators from the OECD-Eurostat Entrepreneurship Indicators Programme II Workshop on Entrepreneurship Indicators university of Huelva Huelva, Spain - Nov. 17-18, 2008Tim Davis OECD Statistics Directorate

  2. Overview • Why measure Entrepreneurship? • Why measure Entrepreneurship internationally? • What is the: “Entrepreneurship Indicators Programme “ • Model, Definitions, Framework and Measures • First EIP data release …. TODAY www.oecd.org/statistics/entrepreneurshipindicators • Results and outputs of current phase • Next steps and beyond

  3. Importance of Entrepreneurship • Long recognized ………………… but endogenous • Policy interest only in latter part of 20th Century • New, more productive firms enter • Less productive firms leave • Those remaining must improve • Maybe….. • But perhaps “entrepreneurship” too broad • Not everyone starting a firm is “productive” • SME ≠ Entrepreneurship

  4. Why Measure Entrepreneurship?Internationally • Policymakers took interest in Entrepreneurship • Many encouraged and tracked “start-ups” • But “American” success eluded them • Productivity gaps continued, and grew • Global restructuring added pressures • What are we missing? • How can we be more like …. them

  5. Genesis of Entrepreneurship Indicators Programme • 2005: Kauffman Foundation: Feasibility Study • What are needs and options? • What role could an organisation like OECD play ? • Eurostat was also exploring entrepreneurship • Survey on Factors of Business Success (FoBS) • Danish-led ICE consortium sponsored Study of “official” Start-up Rates • Huelva Workshop I - Entrepreneurship Statistics

  6. Outcome of Feasibility Study • Entrepreneurship was a policy priority • Limited involvement of NSOs • Few internationally-comparable measures • Fundamental definitions and concepts missing • Measures lacked Policy Context • Desire for regional and target-group data • Need information on firms and entrepreneurs • Basic business demography data incomparable • Strong resistance to new firm surveys

  7. OECD Launched EIPin September 2006 • Make entrepreneurship data boring and routine • Get NSOs and Eurostat involved EIP Approach to Entrepreneurship Measurement • Definitions • A Simple Theoretical Model • A Framework of Indicators • Measurement Manual • Indicators and database

  8. EIP Definitions • Entrepreneurs: those persons (business owners) who seek to generate value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets. • Entrepreneurial activity: the enterprising human action in pursuit of the generation of value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets. • Entrepreneurship is the phenomenon associated with entrepreneurial activity.

  9. Some Important Principles • Entrepreneur vs. Entrepreneurship • Not just small or young firms • Not all firms are entrepreneurial • They are doing something “new” • Some entrepreneurs fail • “Value” can be defined in different ways • Indicators focus on business entrepreneurship

  10. Definitions and Indicators • EIP offers broad definition of entrepreneurship • No single measure perfectly reflects definition • A variety of indicators required • Distinguish aspects and types of entrepreneurship • Employers vs. non-employers • Measures of High Growth and Gazelles • Innovative firms • Exporting firms For example…………….

  11. Sub-Dividing Entrepreneurial Firms High-Growth Replicators High-Growth Innovators High Growth Company Growth Replicators Low Growth Replicators Low Growth Low Growth Replicators Innovators Degree of Innovation

  12. A Simple Modelof Entrepreneurship

  13. Model Framework

  14. Core Indicators

  15. Entrepreneurship Measurement Manual • Boring but essential • Core Definitions • Framework for understanding and developing • Indicators and data specifications • First step was Eurostat-OECD Manual on Business Demography Statistics(2007) • Entrepreneurship Manual for 2009

  16. Structural IndicatorsEnterprise Population by size class

  17. Structural IndicatorsEmployment, by Size Class

  18. Structural IndicatorsValue Added by Size Class

  19. Structural IndicatorsExport Performance

  20. Entrepreneurial Performance IndicatorsEmployer Enterprise Birth/Death - Manufacturing

  21. Entrepreneurial Performance IndicatorsEmployer Enterprise Birth/Death - Services

  22. Entrepreneurial Performance IndicatorsSurvival Rates – One Year Survival Rate

  23. Entrepreneurial Performance IndicatorsSurvival Rates – Share of One Year Old Firms

  24. Entrepreneurial Performance IndicatorsHigh growth Enterprises – By Employment

  25. Entrepreneurial Performance IndicatorsHigh growth Enterprises – By Turnover

  26. Entrepreneurial Performance IndicatorsGazelles – By Employment

  27. Entrepreneurial Performance IndicatorsGazelles – By Turnover

  28. Entrepreneurship Indicators Programme …….Taking stock of progress • Many NSOs and policy experts engaged • Entrepreneurship Indicators Steering Group • Definitions and measurement framework • Core indicators of entrepreneurial performance • 18 countries in first round data collection • Determinant indicators of entrepreneurship ….. demand and supply indicators of Andalusia Model

  29. Messages from the Workshop • Link Determinants and Performance • Continue to exploit existing data • Consider composite indicators • Build new partnerships • Develop regional indicators and analysis

  30. Next steps:Linking Determinants to Performance • Encourage analytical activities • Develop microdata-based indicators • But private databases “weak” for small firms • Benchmark Orbis/Amadeus to NSO firm data • Co-ordinated, multi-country microdata studies e.g. -OECD study: entrepreneurship & innovation -Danish-led study: High growth firms growth

  31. Next steps:Consolidate and build the programme • Engage more countries • Broaden role and membership of EISG • Extend performance indicators • Develop Determinant Indicators • R&D and Technology • Access to Finance • Entrepreneurship Education • ……………….

  32. Measuring Entrepreneurship A Digest of Indicators www.oecd.org/statistics/entrepreneurshipindicators OR Google: OECD entrepreneurship indicators

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