hunter centre for strathclyde Global Entrepreneurship Monitor Scotland 2003 Jonathan Levie Wendy Brown Sarah Cooper

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 2003 AIMS Measure differences in entrepreneurial activity between 31 participating GEM sovereign nations & Scotland Identify factors that account for Scotland's level of entrepreneurial activity Suggest implications for public policy

GEM2003 Methodology Standardised Cross-national Data: 31 nations in nations in database 63% of world population Representative Sample: >2000 adults per nation, 100,000 total Key Informant Sample: 1300 experts interviewed

Total 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)

Summary Highlights 1.20% rise in TEA rate to 5.5%; typical rate for Europe. Attitudes are now also typical. 2.TEA rates highest among recent in-migrants. 3.More female Scots try to start social enterprises than private businesses. 4.Scotland has good record of university spinouts but policy is confused and quality and quantity could still be raised. 5.Scots are reluctant to seek external private sector finance; there is now a finance gap below £20,000.

How Scotland Compares TEA scores for 31 sovereign nations & Scotland Finland Denmark Norway Ireland New Zealand United Kingdom Scotland

Attitudes to Entrepreneurship Attitudes in Scotland are now the same as in UK and small modern nations

Enterprise Culture in Scotland Scotland’s enterprise culture is no different to that of the UK and small modern nations

In-migration & new business activity in UK In the UK, recent in-migrants have significantly higher rates of new business activity

Social and private enterprise in Scotland Starting social enterprises is more popular than starting private businesses for females – but not for males

Social and private enterprise in Scotland Social entrepreneurs are more diverse than private business entrepreneurs

University spinouts in Scotland Scottish universities produce the same number of spinouts (and licenses) as research-intensive US universities and at a lower cost Government Policy towards spinouts in Scotland is confused (ITIs versus SHEFC) Quality and quantity could still be improved by: - bringing in experienced new venture managers to run spinouts - creating a Scottish Technology Review

Finance for entrepreneurs in Scotland Expected & secured sources of finance: Nascent entrepreneurs only

Finance for entrepreneurs in Scotland Scottish nascent entrepreneurs are less likely to seek private sector investment Only 33% of Scots think there are adequate sources of startup finance in their region (39% in UK) But 50% need only £10,000 or less to start and 85% need £20,000 or less And success rates in securing finance are high for those who try Is perception worse than reality?

Policy & Programmes Review £49M Enterprise In Education Programme a world first for Scotland Review of Social Enterprise published but no action plan by yearend Fresh Talent initiative but no specific in- migration programmes in place by yearend Business Gateway (re) launch Intermediate/intermediary Technology Institutes launched

Attitudes and Culture are no longer “Scottish” problems; but enterprise education is needed because entrepreneurs are still rare The real enemy to new business startup rates is population decline; in-migration will help Social enterprise seems to have low political priority in Scotland: local vested interests may be the cause; private venture philanthropy may be a solution Policy on spinouts is confused; focus now should be on broadcasting technological capabilities and drawing in management talent The finance gap is now at low end; quasi-public lending may be a solution Policy Implications

Demographics & Entrepreneurship A dynamic and youthful population has a positive effect on entrepreneurial activity Six-year population growth rates and TEA rates of 36 GEM2002 nations