Barriers to Entrepreneurship Aggelos Tsakanikas Laboratory of Industrial and Energy Economics –...
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Transcript of Barriers to Entrepreneurship Aggelos Tsakanikas Laboratory of Industrial and Energy Economics –...
Barriers to Entrepreneurship
Aggelos Tsakanikas
Laboratory of Industrial and Energy Economics – National Technical University of Athens
Early stage entrepreneurs in Greece
Early Stage entrepreneurship(TEA index)
Potentialentrepreneurs Knowledge
& capabilities
NascentEntrepreneur
Starting a business
New entrepreneur
(< 3,5 years old)
Established entrepreneur
(> 3,5 years old)
Idea Firm creation
Survival
•Wide concept of entrepreneurship
•Unit of analysis: the individual
Global Entrepreneurship Monitor (GEM)
Source: ΙΟΒΕ, GEM
TEA entrepreneurs in Greece
8% of the population
Main characteristics 2010
Necessity entrepreneurship: 27% Opportunity entrepreneurship: 39%
Mostly men, on average 41 years old Limited participation of tertiary graduates Self-employment: ~60% only 1 person Focused on consumer oriented activities (retail) Use of modern technologies, but no significant
innovation
Attitudes towards entrepreneurship
High levels of self confidence (knowledge and skills to start a business): 1st place in Europe
But at the same time world champions in fear of failure factor
Entrepreneurship: A desirable career choice (2nd place in Europe)
High level of status and respect for entrepreneurs Some good ideas and opportunities, but various
problems when trying to proceed…
But at the same time…
It’s expensive to start up in Greece Average initial capital investment:
~30.000 € (higher than european average)
It’s also risky in terms of personal funds Own capital (from savings): 53% of the
investment’s cost Half of the rest from close family and
only 1/3 from Banks (or used to…).
Doing Business 2012
Ease of... Doing Business
2012 rankDoing Business
2011 rankChange in
rank
Doing Business 100 101 +1
Starting a Business 135 149 14
Dealing with Construction Permits
41 42 1
Getting electricity 77 78 1
Registering Property 150 151 1
Getting Credit 78 75 -3
Protecting Investors 155 153 -2
Paying Taxes 83 80 -3
Trading Across Borders 84 86 2
Enforcing Contracts 90 91 1
Resolving Insolvency 57 50 -7Source: Doing Business 2012, World Bank
Starting a business
Ease of... Doing Business 2012 rank 135
Starting a business Doing Business 2011 rank 149
GREECE OECD
Procedures 10 5
Time (days 10 12
Cost (% of income per capita) 20.1 4.7
Paid-in Min. Capital (% of income per capita) 22.8 14.1
Source: Doing Business 2012, World Bank
Barriers to entrepreneurship
1. Getting Funding
2. Costly procedures for starting a business
3. Labour market rigidities
4. Closed professions
5. Complicated public procurement procedures
6. Complex and unstable tax regulation and administration
7. Poor research / innovation
8. Old fashioned institutional set up in education (memory based system and no critical thinking)
9. Ambiguous societal attitude towards entrepreneurship
But today we need to work harder
Need to change the mindset of young people towards entrepreneurship The Public sector not an option anymore
Need to prepare graduates in terms of capabilities to formulate an action plan (marketing their ideas)
New funding mechanisms & schemes: possibility for synergies between them and family (own) funding, towards a more rational allocation of resources
Effective mechanisms that help the entrepreneur after the initiation of his/her venture is actually lacking in Greece
Need to overcome the toxic culture of the “easy” way out
Quality, Value adding activities, differentiation
Vision and planning