Global Entrepreneurship Monitor (GEM)

Project Overview & Selected Findings

Dr Paul Steffens, Deputy Director ACE

Department of Industry & Science: Industry and Innovation Workshop

Google: ACE QUT

What I will cover today

• Overview of the Global Entrepreneurship Monitor (GEM) Project

• Selected 2014 GEM findings

Overview of the GEM project

www.gemconsortium.org

GEM is the world’s largest entrepreneurship study

• Annual “benchmarking study” of entrepreneurship around the globe– Adult population survey – at least 2000 in each country– Harmonized survey and sampling approach– Entrepreneurship participation, attitudes, profile of business / entrepreneurs– Over 100 countries since 1999

• GEM by the numbers - 2014– surveyed 197,000 individuals– across 70 countries– 3,800 national experts – USD $9 million– 75% of world population – 89% of world GDP

• Australian participation– QUT is the current Australian partner with surveys in 2010, 2011, 2014, 2015– Swinburne various years 2001 - 2006

Potential Entrepreneur:Opportunities, Knowledge, Skills & Attitudes

Nascent Entrepreneur:Involved in Setting Up a Business

Owner-Manager of a New Business (up to 3.5 years old)

Owner-Manager of an Established Business (more than 3.5 years old)

Total Early-Stage Entrepreneurial Activity (TEA)

Conception Firm Birth Persistence

Discontinuation of Business

Early-stage Entrepreneurship Profile

Socio-demographics•Sex•Age

Socio-demographics•Sex•Age

Impact•Business growth•Innovation•Internationalization

Impact•Business growth•Innovation•Internationalization

Industry•SectorIndustry•Sector

GEM measures grass-roots entrepreneurship

Harmonized Survey of 2000 Adults in

each country

Selected 2014 GEM Findings• Our recent report is based on

2014 data

• Just finished 2015 data collection to be released Jan 2016

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Innovation-driven economies

0%

5%

10%

15%

20%

Perc

enta

ge o

f adu

lt p

opul

ation

(18-

64

year

s)

Grass roots entrepreneurship is alive and well in Australia

2006 2007 2008 2009 2010 2011 2012 2013 20140%

2%

4%

6%

8%

10%

12%

14%

16%

Australia Innovation Average USA UK

Perc

enta

ge o

f the

Adu

lt P

opul

taio

n (1

8-65

)

Trend in entrepreneurship rates through economic cycles

GFC

2006 2007 2008 2009 2010 2011 2012 2013 20140%

2%

4%

6%

8%

10%

12%

14%

Australia Innovation Average USA UK

Perc

enta

ge o

f the

Adu

lt P

opul

taio

n (1

8-65

)

Trend in opportunity entrepreneurship rates

GFC

2006 2007 2008 2009 2010 2011 2012 2013 20140.0%

1.0%

2.0%

3.0%

Australia Innovation Average USA UK

Perc

enta

ge o

f the

Adu

lt P

opul

taio

n (1

8-65

)

Trend in necessity entrepreneurship rates

GFC

Also measures Employee Entrepreneurial ActivityIta

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& T

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akia

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Uni

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Qat

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Innovation-driven economies

0%

2%

4%

6%

8%

10%

12%

14%

Perc

enta

ge o

f Adu

lt P

opul

ation

(18-

64

year

s)

EEA vs TEA

0% 2% 4% 6% 8% 10% 12% 14%0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

JapanItaly

GermanyFrance

BelgiumSpain DenmarkFinland Norway

Slovenia IrelandSweden

Switzerland LuxembourgGreece

TaiwanAustriaEstoniaNetherlands

PortugalPuerto Rico

United KingdomSlovakiaSingapore

Canada AustraliaUnited States

Trinidad & Tobago

Qatar

Employee Entrepreneurial Activity (EEA)Percentage of Adult Population (18-64)

Tota

l Ent

repr

eneu

rial A

ctivi

ty (T

EA)

Perc

enta

ge o

f Adu

lt Po

pula

iton

(18-

64)

EEA Average 6.01%

TEA Averate 8.54%

Informal Investment

Innovation driven

GEM Average United Kingdom

United States AustraliaAUD 0

AUD 10,000

AUD 20,000

AUD 30,000

AUD 40,000

AUD 50,000

AUD 60,000

0%

1%

2%

3%

4%

5%

6%

7%

3.3%

4.7%

2.1%

6.2%

5.1%

Average Funds -AUS Business Angel

Ave

rage

Info

rmal

Inve

stm

ent i

n A

US$

Perc

enta

ge o

f Adu

lt P

opul

ation

(18-

64)

2014 Special Topic

YOUTH ENTREPRENEURSHIP

18 - 24 years 25 - 35 years 35 - 44 years 45 - 54 years 55 - 64 years0%

5%

10%

15%

20%

Australia

United States

Innovation Driven Economies

Perc

enta

ge o

f adu

lt p

opul

ation

(18-

64)

Youth entrepreneurship is the only age group we lag behind the US

Entrepreneurial Education at School Maters - ALOT

18-24 25-340%

5%

10%

15%

20%

25%

30%No Training at SchoolEntrpreneurship Training at School

Perc

ent o

f Ind

ivid

uals

as

Entr

epre

neur

s

Our youth entrepreneurs are not as ambitious

18-24 25-34 35-44 45-54 55-640.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%High Aspiration TEA

Developed Countries

USA

Austalia

Age Bracket

Perc

enta

ge o

f Pop

ulati

on

High aspiration is >20 employees in 5 years time

Unique features of GEM• Captures early stage entrepreneurship and informal economy

– Benchmarking against ~80 other economies– Trends

• Start-up characteristics– Necessity vs opportunity– Aspirations– Technology etc,

• Entrepreneur profile– Age– Gender

• Entrepreneurship waterfall (at population level)– Intentions nascent young business established business exits

• Employee entrepreneurial activity (EEA)

• Entrepreneurial Attitudes

• Informal investment

• Annual special topics– 2014 Youth– 2015 Social

Challenges of GEM

• Smallish sample size limits “statistical accuracy”– Larger Australian sample - $$– Each state– Some analyses can be aggregated across years

• Not longitudinal panel study

• Response rates– Introduces biases– Mobile vs landline balancing

Thank you

QUESTIONS?

Extra Slides

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Factor-driven economies Efficiency-driven economies Innovation-driven economies

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Perc

enta

ge o

f adu

lt po

pula

tion

(18-

64 y

ears

)

http://www.gemconsortium.org/

Economic development drives entrepreneurship's role in the economy Innovation-driven

(advanced)economies

Factor-driven(undeveloped)

economies

Efficiency-driven(developing)economies

Economic development drives entrepreneurship's role in the economy

Factor-Driven Efficency-Driven Innovation-Driven0%

10%

20%

30%

40%

50%

60%

Necessity-driven

Improvement-driven opportunity

Entr

epre

neur

ial A

ctivi

ty (T

EA):

Per

cent

age

of A

dult

Popu

latio

n

Entrepreneurial participation varies by age around the world

http://www.gemconsortium.org/

Latin Americ

a & Carib

bean

Middle East & North

Africa

Sub-Saharan Africa

Asia Pacifi

c & South Asia

Europe – EU28

Europe – Non EU28

North Americ

a0

5

10

15

20

25

30

35

18 - 24 years25 - 35 years35 - 44 years45 - 54 years55 - 64 years

Perceived Opportunities for Start-up is an Issue for Seniors

Opportunities Available Personal Capabilities Fear of Failure Prevents0%

10%

20%

30%

40%

50%

60%Entrepreneurship Perceptions

Developed Average

18-54

55-64

65-99

Senior’s perceptions of society attitudes are mostly on par with others

Good Career Choice High Status of Entrepeneurs Positive Attitudes in Media0%

10%

20%

30%

40%

50%

60%

70%

80%Society Entrepreneurship Perceptions

Developed Average

18-54

55-64

65-99

Data from GEM would again suggest Australia stacks up pretty well – except on “new technology” start-ups

High Aspiration New Product / Market New Technology0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%GEM Higher-Impact Entrepreneurial Activity

Developed Countries

USA

Austalia

Perc

enta

ge o

f Pop

ulati

on

Youth again lower for ventures featuring “new products”

18-24 25-34 35-44 45-54 55-640.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%New Product / Market TEA

Developed Countries

USA

Austalia

Age Bracket

Perc

enta

ge o

f Pop

ulati

on

But we perform relatively poorly for “technology” entrepreneurs

18-24 25-34 35-44 45-54 55-640.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%New Technology TEA

Developed Countries

USA

Austalia

Age Bracket

Perc

enta

ge o

f Pop

ulati

on

Participation across the “entrepreneurship waterfall”

Factor Driven Efficiency Driven

Innovation Driven

United States United Kingdom

Australia0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Nascent Baby Business Established Business Discontinuance

Perc

enta

ge o

f Pop

ulai

ton

(18-

64)