gem uk 2014 launch presentation. march 3rd 2015
TRANSCRIPT
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How Entrepreneurial is the UK?
GEM UK 2014 Results
Mark Hart, Jonathan Levie, Karen Bonner and Cord Christian-Drews
GEM UK 2014 Launch Event BIS Research Conference London, 3rd March 2015
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Presentation Structure
• What is GEM? • GEM Global Messages 2014 • GEM UK Headline Results – 2003-2014
– International comparisons – Opportunity Vs Necessity – Gender and Age – Sub-national geographies
• Entrepreneurial Aspiration
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GEM is an international project aimed at understanding the relationship between entrepreneurship, environment and economic development
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GEM’s Primary Focus
• To measure differences in entrepreneurial attitudes, activity and aspiration between countries
• To uncover factors which underpin these differences • To identify policies that may enhance entrepreneurial
activity.
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Role and Contribution of GEM
• In 2014, the GEM research consortium measured entrepreneurial activity of working age adults (~200,000 individuals) in 73 countries, collectively representing all global regions of the world and a broad range of economic development levels.
• The samples represent an estimated 72% of the world’s
population and 90% of the world’s total GDP. • GEM Global considered as the world’s most authoritative
comparative study of entrepreneurial activity in the general adult population.
• The Global GEM Executive 2014 Report was published in February 2015 and can be found at www.gemconsortium.org
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Key theoretical assertion in the GEM Model
• relationship between national-level new business activity and
the institutional environment (Entrepreneurial Framework Conditions - EFC) – i.e., national levels of entrepreneurial opportunity and entrepreneurial capacity
• In GEM we measure these two dimensions with the following two questions from the individual respondents:
• ‘there are good opportunities where I live in the next 6 months’ (opportunity perception) and,
• ‘I have the skills, knowledge and experience to start a business’
(start-up skills perception) in the adult population.
• Focus on structural conditions that regulate the allocation of effort to entrepreneurial activity in the population as a whole
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Social, Cultural, Political Context
Basic requirements
- Institutions - Infrastructure - Macroeconomic stability - Health and primary
education
New branches, firm growth
Established Firms (Primary Economy)
National Economic Growth
(Jobs and Technical Innovation)
Efficiency enhancers
- Higher education & training
- Goods market efficiency - Labour market efficiency - Financial market
sophistication - Technological readiness - Market size
Innovation and entrepreneurship
- Entrepreneurial finance - Gov. entrepreneurship
programs - Entrepreneurship
education - R&D transfer - Commercial, legal
infrastructure for entrepreneurship
- Entry regulation
Attitudes: Perceived opportunities Perceived capacity
Aspirations: Growth Innovation Social value creation
Activity: Early-stage Persistence Exits
Entrepreneurship
GEM Conceptual Model
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GEM Entrepreneurial Pipeline
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Key Messages from GEM Global 2014
• African economies showed the highest ability to perceive and pursue entrepreneurial opportunities with little fear of failure.
• In contrast, European Union nations are less optimistic, see fewer opportunities and are more uncertain about their skills in acting entrepreneurially.
• Total early-stage Entrepreneurial Activity (TEA) is highest among factor-driven economies and declines in economies with higher Gross Domestic Product per capita (GDP pc).
• The lowest TEA rates overall are in European economies (7.8% in EU
economies and 6.0% in non-EU economies).
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GEM UK 2014
• In 2014, 10,750 adults aged 16-80 were sampled for GEM UK (just over 200,000 worldwide).
• Supported by BIS, Welsh Government, Hunter Centre for Entrepreneurship, Invest NI and PRIME.
• UK pooled dataset (2003-14) for ~300,000 adults (16-80yr
olds).
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GEM UK Datasets – underpins a range of unique analyses
• International benchmarks and comparative analysis – tracking entrepreneurial attitudes, aspiration and activity over time of the adult population
• Only source of data on key groups of individuals - e.g.,
women, young people and ethnic minority groups • Sub-national analysis with the pooled dataset – Home
Nations, city-regions/LEPs – multi-level analytical techniques • Input into wider conceptual frameworks – GEDI • Opportunities for longitudinal analysis - PSED
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Participation in Entrepreneurship
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Early-Stage Entrepreneurial Activity (TEA)
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Early-Stage Entrepreneurial Activity – UK Home Nations
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Opportunity and Necessity Entrepreneurship
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Rising Nascent Opportunity in 2014
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Digging Deeper
• A deeper understanding of entrepreneurial motivation – beyond simplistic opportunity and necessity motives – is important
• ……….especially when it comes to predicting
entrepreneurs’ expectations about growing their business and hiring employees
• Which were one key link to subsequent business
performance (in terms of job growth, innovation and exporting)
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“Entrepreneurial Journey” of Necessity-motivated Entrepreneurs
Active (53%)
Sold (2%)
Closed (15%)
Dormant (8%)
Nascent (23%)
Growth (19%)
No change (78%)
Decline (3%)
Performance: Job Growth (N= 125 active businesses)
>25% of customers outside UK (11%)
1-25% of customers outside UK (21%)
No exports (68%)
Performance: Exports (N= 125 active businesses)
High (6%)
Some (42%)
None (52%)
Performance: Innovation (N= 124 active businesses)
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Female Early-Stage Entrepreneurial Activity 2003-14
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Senior Entrepreneurship (50-64 years old)
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UK Entrepreneurial Attitudes
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Measures of Entrepreneurial Aspiration – 2014
(% of TEA or
EBO
entrepreneurs)
High Job
Expectation:
More than ten
jobs and
growth more
than 50%
New Product-
Market
High or
Medium tech
sectors
Exporting:
More than
25% of
customers
outside the
country TEA EBO TEA EBO TEA EBO TEA EBO
UK 17.6 3.6 24.7 13.8 8.4 9.4 15.9 9.9
France 16.9 1.6 40.1 10.6 11.3 0 21.7 12.3
Germany 14.1 3.5 24.0 14.3 6.8 10.4 21.1 11.8
US 27.3 4.2 36.7 18.4 9.4 6.5 14.5 7.5
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High Job Expectation
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Headline Findings from 2014 • The TEA rate in 2014 of 8.6% further confirms the higher long-
term trend in early-stage entrepreneurial activity in the UK.
• UK has pulled ahead of France and Germany in the entrepreneurship stakes - for the last four years it has significantly outperformed both of these countries in the number of early-stage entrepreneurs
• In 2014 one in five working age individuals in the UK intended
to start a business within the next three years, were actively trying to start a business, or were running their own business.
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• Growth in early-stage entrepreneurial activity in the UK is mainly because more men, especially those aged between 50 and 64 years old, are taking the first steps to running their own business.
• While this means that the “gender gap” in early-
stage entrepreneurship has risen this year, a longer term view reveals that the TEA rate of 5.7 per cent for women in 2014 has almost doubled in ten years.
Headline Findings from 2014 (2)
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Headline Findings from 2014 (3)
• Entrepreneurial attitudes: the percentage of non-entrepreneurs of working-age in the UK who agreed there were good opportunities for starting a business in their local area in the next six months has now risen to 37 per cent in 2014.
• This marks a return to pre-recession levels of 2007 and suggests a growing sense of optimism among the wider population for business start-up.
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Deepening Analysis and New Directions
• Work has commenced in 2013 & 2014 to develop a pilot ‘Panel Study of Entrepreneurial Dynamics’ (PSED) in the UK – led by Professor Paul Reynolds (Marie Curie Research Fellow at Aston))
• GEM UK core dataset will feed into the work of the Enterprise
Research Centre (ERC) on ‘High Aspiration Entrepreneurs’; ‘Diversity and Small Firm Growth’; ‘Understanding Motivations for Entrepreneurship’; ‘Sociology of Enterprise’; ‘Evaluation of SULCo’ for the BBB. (www.enterpriseresearch.ac.uk)
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Contact us:
If you would like any more information about the GEM UK and Global projects and any of its activities please contact Professor Mark Hart
([email protected]); Professor Jonathan Levie ([email protected]) or Karen Bonner ([email protected])
More details about the activities of GEM can be found at:
www.gemconsortium.org