1 OECD/Eurostat Entrepreneurship Indicators A joint OECD / Eurostat project

2 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Task force on entrepreneurship indicators – manual drafting group Chair: Eurostat Composition: OECD European countries: Denmark, Latvia, Sweden, Germany, Portugal, Estonia, Italy Non-European countries: Canada, United States European Commission: Eurostat, DG Enterprise Meetings: Feb 2007, May 2007, planned Sep 2007

3 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Task force on entrepreneurship indicators – manual drafting group Main results and conclusions (1): This group would take first steps in drafting a methodological manual on entrepreneurship. The core part of the manual will be a harmonized list of indicators, structured as appropriate, with related reference documents. It was agreed that there needs to be room for the development of future indicators. The important role of business demography for the entrepreneurship project was highlighted. Therefore it was considered to be crucial to publish as soon as possible the methodological manual for business demography Eurostat will commit significant resources for future entrepreneurship statistics within its new MEETS programme

4 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Task force on entrepreneurship indicators – manual drafting group Main results and conclusions (2): It was agreed to set a threshold for firm creation with the “employer firm birth (death) rate” indicating the emergence of a new firm with at least one employee. There was agreement on the remainder of sections A and B of the matrix list, it was proposed to merge both, as the border lines are not so clear cut. These would be the core indicators describing the performance of an economy in terms of entreprenership.

5 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Task force on entrepreneurship indicators – manual drafting group Main results and conclusions (3): In view of the significant political interest in self employment in the EU and beyond, it was decided to consider LFS data as a promising source to measure the rate of self employment and other indicators related to the entrepreneur (as a person). It was decided to use the experiences gained in the Eurostat pilot project on linking trade data and enterprise variables for the analysis of entrepreneurship effects on export and for the measurement of export propensity of new firms.

6 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact On indicators related to high growth, it was agreed that indicators of high growth will be included in the core list of Entrepreneurship Indicators but a final decision on the precise terms of the definitions will await the findings of the workshop to take place in the fall. The group concluded consensus on the basic structure of the matrix list. It was proposed to present the the basic structure of this list for approval to the Istanbul meeting of the EISG. At the same time EISG is requested to give the mandate to draft a manual to this group. Task force on entrepreneurship indicators – manual drafting group Main results and conclusions (4):

7 OECD/Eurostat The list of indicators A joint OECD / Eurostat project

8 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact The question is, what we have to measure to provide the necessary information to policy makers in the context of entrepreneurship

9 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact The first component of the measurement relates to the state of the economy with regard to the entrepreneurship phenomenon

10 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact The second component of the measurement relates to factors that might have an inpact on the entrepreneurship phenomenon and that can be subjected to political control

11 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact The third component of the measurement relates to policy targets that may be influenced by the entrepreneurship phenomenon

12 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact We had very little time

13 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact PerformanceDeterminants Impact (= policy targets)

14 OECD/Eurostat Firm births and deaths Entrepreneurship Indicators - Performance, Determinants and Impact Performance 19 indicators Firm survival Employment in new firms Competitiveness contribution

15 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Market conditions Access to finance Technology and infrastructures Supply of entrepreneurial spirit Entrepreneurship culture Regulatory framework Determinants ~ 50 indicators grouped in 6 categories

16 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Creation of more and better jobs Economic growth Productivity growth Increased SME competitiveness Poverty reduction Globalization challenges mastered Reduction of informal economy Enhancement of job satisfaction Growth of workforce flexibility Emigration of talent stopped Impact 12 potential policy target areas “Lead markets” created Technological changes utilized

17 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact PerformanceDeterminantsImpact

18 OECD/Eurostat Employer firm birth rate Entrepreneurship Indicators - Performance, Determinants and Impact Employer firm death rate Business churn Net business population growth Firm births and deaths Performance 19 indicators

19 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Firm births and deaths Firm survival Employment in new firms Competitiveness contribution Performance 19 indicators

20 OECD/Eurostat Survival rate among 3-year old businesses Survival rate among 5-year old businesses Proportion of young firms with 3-year survival Proportion of young firms with 5-year survival Entrepreneurship Indicators - Performance, Determinants and Impact Firm survival Performance 19 indicators

21 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Firm births and deaths Employment in new firms Firm survival Competitiveness contribution Performance 19 indicators

22 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Self employment: Business ownership rate among start-ups Self employment: Business ownership rate in total firm population Employment rate in 3 (and/or 5) year old firms Average firm size by employees after 3 (and/or 5) years Percentage of adults in population starting a new firm per month Employment in new firms Performance 19 indicators

23 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Firm births and deaths Employment in new firms Firm survival Competitiveness contribution Performance 19 indicators

24 OECD/Eurostat Rate of high-growth firms by employment and/or turnover Competitiveness contribution Entrepreneurship Indicators - Performance, Determinants and Impact Performance 19 indicators “Gazelles”: Rate of young high-growth firms by employment and/or turnover Value-added contribution by new firms Contribution of firms to productivity growth by size Contribution of firms to productivity growth by age Export propensity of new/small firms

25 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact The EISG is asked to approve the list of performance indicators and to mandate the MDG to produce a manual, where these indicators are described in detail. This manual should become a joined Eurostat/OECD manual, preferably supported also by other international organisations, and should lead to a situation that all data produced on the basis of this manual would be internationally comparable. To keep the current momentum, a first publication of data according to this list is planned before the end of Task force on entrepreneurship indicators – manual drafting group Proposals to the EISG in detail

26 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact PerformanceDeterminantsImpact

27 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact Market conditions Access to finance Technology and infrastructures Supply of entrepreneurial spirit Entrepreneurship culture Regulatory framework Determinants ~ 50 indicators grouped in 6 categories

28 OECD/Eurostat Entrepreneurship Indicators - Performance, Determinants and Impact As far as the determinants of entrepreneurship are concerned, the MDG is proposing to the EISG to agree to the list of 6 areas of interest. Work on these areas is in different stages of development. Work from different sources may feed these areas. In some cases this goes beyond the sphere of National Statistical Offices, i.e. goes beyond official statistics. A combination of sources is possible. These areas should give a frame for work in the different fields. Task force on entrepreneurship indicators – manual drafting group Proposals to the EISG in detail (2)

29 OECD/Eurostat Entrepreneurship Indicators Performance, Determinants and Impact PerformanceDeterminantsImpact Firm births and deaths Firm survival Employment in new firms Competitiveness contribution Employer firm birth rate Employer firm death rate Business churn Net business population growth Survival rate 3 years Survival rate 5 years Proportion 3 years survival Proportion 5 years survival Employment rate young firms % adults starting firms Ownership rate business population Ownership rate start-ups Rate of high-growth firms Rate of Gazelles Value-added young firms Productivity contribution Productivity growth contribution Export propensity Market conditions Access to finance Technology and infra- structure Supply of entrepre neurial spirit Entrepre- neurship culture Regulatory framework Creation of more and better jobs Economic growth Productivity growth Increased SME competitiveness Poverty reduction Globalization challenges mastered Reduction of informal economy Enhancement of job satisfaction Growth of work force flexibility Emigration of talent stopped Competition, competitive arena Anti-trust laws Degree of public ownership Degree of public involvement Access to the domestic market, public procurement Access to foreign markets Export share of young firms Measures of export credits Measures for debt financing Cost of debt financing by firm size VC invest ment as % of GDP Private Equity in % of GDP Business angel financing Employment VC-backed firms Credit guarantees University / industry interface Technological cooperation between firms Industrial technology transfer Communication: Broadband access Patent system, standards R&D and Innovation data Characteristics of entrepreneurs Education and experience of entrepreneurs Business and E-ship education E-ship support infrastructure Immigration and E-ship Intrapre neurship opportunities Risk attitude in societies Attitudes towards entrepreneurs Desire for business ownership Fiscal environment Court-legal framework Safety and health regulation Labour market regulation Product regulation Environment regulation Firm start, close, exit and bankruptcy regulation Average firm size after 3 years Days to start Procedures Cost to start Time to close Bankruptcy stigma Mezzanine financing Technological changes utilized Creation of “lead markets”