hunter centre for strathclyde Global Entrepreneurship Monitor Scotland 2002 Jonathan Levie Wendy Brown Laura Galloway

Global Entrepreneurship Monitor RESEARCH QUESTIONS How does the level of entrepreneurial activity vary between countries? Does the level of entrepreneurial activity affect economic growth? What makes a country entrepreneurial? What policies might enhance entrepreneurial activity?

GEM Scotland 2002 AIMS Measure differences in entrepreneurial activity between 37 participating GEM sovereign nations & Scotland Identify factors that account for Scotland's level of entrepreneurial activity Suggest implications for public policy

GEM2002 Methodology Standardised Cross-national Data: 37 nations 62% of world population 92% of world GDP Representative Sample: >2000 adults per nation Key Informant Sample: > 30 experts interviewed per nation

Measuring Entrepreneurial Activity [TEA] % of adults actively starting a business (nascent entrepreneurship rate) + % of adults running a new business (owner/managers of businesses < 3½ yrs old) = Total Entrepreneurial Activity (TEA)

Scottish TEA rate : 4.6% GEM 37 nation average TEA rate : 12% Scottish Female TEA rate now same as UK Female TEA rate Scottish Male and Female TEA rates are not significantly different Young male TEA rates have declined Opportunity perception rate among young male Scots has increased Summary Highlights

Low rates of informal investment for the 3 rd year running High potential entrepreneurship rate is low because overall entrepreneurship rate is low (the issue is quantity not just quality) Non-white immigrants are more entrepreneurial than other groups Scotland & Ireland Demographic and policy differences account for gap in entrepreneurship rates Summary Highlights contd.

How Scotland Compares Japan Russia Belgium France Hong Kong Croatia Sweden Chinese Taipei Poland SCOTLAND Finland Netherlands Slovenia Spain Germany United Kingdom Italy Singapore Denmark South Africa Hungary Israel Switzerland Australia Norway Canada Ireland U.S.A. Iceland China Mexico Brazil New Zealand Argentina Korea Chile India Thailand Total Sample Country average TEA Score (% of adults 18-64) [95% Confidence Interval] TEA scores for 37 sovereign nations & Scotland Finland Denmark Israel Norway Ireland New Zealand United Kingdom Scotland

High Potential Entrepreneurship Percentage of individuals in sample who exhibited High Potential Entrepreneurship Percentage of entrepreneurs in sample who exhibited High Potential Entrepreneurship High Potential Entrepreneurship in Scotland is more an issue of quantity than quality

Immigrant/Ethnic Entrepreneurship UK GEM sample (aged only) by origin and ethnic background Non-white immigrants have significantly higher entrepreneurial activity % in sample TEA score % contribution White UK-born90584 Non-white UK-born262 White immigrants to UK576 Non-white immigrants to UK3128

Immigrant/Ethnic Entrepreneurship Scottish GEM sample (aged only) Immigrants to Scotland have significantly higher entrepreneurial activity % in sample TEA score % contribution White Scots83468 Non-white Scots0-- White UK-born, not Scots12823 Non-white UK-born, not Scots0-- White immigrants to UK353 Non-white immigrants to UK1226

Scotland and Ireland compared A dynamic and youthful population has a positive effect on entrepreneurial activity Six-year population growth rates and TEA rates of 36 GEM2002 nations

Policy & Programmes Review “A New Approach to Entrepreneurship” Scottish Enterprise, January Encouraging Innovative, High-Growth Starts Encouraging More People to Start Businesses Increasing the Contribution of Education to Entrepreneurship SMART, SUCCESSFUL SCOTLAND “GENERATING ENTREPRENEURIAL DYNAMISM” “Going For Growth” Jack McConnell’s October speech

Encourage ‘growth of enterprise’ as well as enterprise growth - Education for enterprise focus correct - More quantity and quality support needed Policy Implications Develop research-based policies that encourage informal (friends and family) investment Develop research-based policies that encourage entrepreneurial immigrants