1 OECD/Eurostat [email protected] Entrepreneurship Indicators A joint OECD / Eurostat...

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OECD/Eurostat 2007 [email protected]

Entrepreneurship Indicators

A joint OECD / Eurostat project

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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

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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

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• 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.

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• 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.

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• 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.



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The list of indicators

A joint OECD / Eurostat project

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The question is, what we have to measure to provide the necessary information to policy makers in the

context of entrepreneurship

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The first component of the measurement relates to the state of

the economy with regard to the entrepreneurship phenomenon

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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

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The third component of the measurement relates to policy

targets that may be influenced by the entrepreneurship phenomenon

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We had very little time

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Performance DeterminantsImpact

(= policy targets)

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Firm births and deaths


Performance19 indicators

Firm survival

Employment in new firms

Competitiveness contribution

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Market conditions

Access to finance

Technology and infrastructures

Supply of entrepreneurial spirit

Entrepreneurship culture

Regulatory framework

Determinants~ 50 indicators

grouped in 6 categories

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Creation of more and better jobs

Economic growth

Productivity growth

Increased SME competitiveness

Poverty reduction

Globalization challengesmastered

Reduction ofinformal economy

Enhancement ofjob satisfaction

Growth of workforce flexibility

Emigration of talent stopped

Impact12 potential

policy target areas

“Lead markets” created

Technological changes utilized

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Performance Determinants Impact

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Employer firm birth rate


Employer firm death rate

Business churn

Net business population growth



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Firm survival




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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


Firm survival


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Firm survival



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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



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Firm survival



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Rate of high-growth firms by employment and/or turnover




“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

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• 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 2007.


Proposals to the EISG in detail

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Market conditions

Access to finance

Technology and infrastructures

Supply of entrepreneurial spirit

Entrepreneurship culture

Regulatory framework

Determinants~ 50 indicators

grouped in 6 categories

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• 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.


Proposals to the EISG in detail (2)

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Entrepreneurship IndicatorsPerformance, Determinants and Impact



Firm survival


Competitivenesscontribution

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

Accessto finance

Technology and infra-structure

Supply ofentrepreneurialspirit

Entrepre-neurshipculture

Regulatoryframework

Creation of moreand better jobs

Economic growth

Productivity growth

Increased SMEcompetitiveness

Poverty reduction

Globalizationchallenges mastered

Reduction ofinformal economy

Enhancement ofjob satisfaction

Growth of workforce flexibility

Emigration oftalent 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 debtfinancing

by firm size

VC investment as %

of GDP

Private Equity in %

of GDP

Business angel

financing

Employment VC-backed

firms

Credit guarantees

University / industry interface

Technological cooperation

between firms

Industrialtechnology

transfer

Communication:Broadband

access

Patent system,standards

R&D andInnovation

data

Characteristicsof

entrepreneurs

Education andexperience ofentrepreneurs

Business andE-ship

education

E-shipsupport

infrastructure

Immigrationand E-ship

Intrapreneurship

opportunities

Risk attitudein societies

Attitudestowards

entrepreneurs

Desire forbusiness

ownershipFiscal

environment

Court-legalframework

Safety andhealth

regulation

Labour market

regulation

Productregulation

Environmentregulation

Firm start,close, exit and

bankruptcyregulation

Average firm size after 3 years

Days to start

Procedures

Cost to start

Time to close

Bankruptcy stigma

Mezzaninefinancing

Technologicalchanges utilized

Creation of “lead markets”

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