Regional Summit on GROWING STATE ECONOMIES Nashville, TN November 14, 2011 Global Entrepreneurship Monitor Research: Highlights Abdul Ali, Ph.D. 1
Babson College # 1 Entrepreneurship Undergraduate: 1995-2011 MBA: 1994-2011 #1 in Student Entrepreneurial Skills (2011) Undergraduate: #1 Entrepreneurship (2011)
AGENDA Global Entrepreneurship Monitor (GEM) Overview Methodology Key findings Attitudes, Activity, Aspirations Demographics National Trends and Differences across Select Regions
GEM Model Basic Requirements Established Firms (Primary Economy) Social, Cultural, Political Context Efficiency Enhancers Innovation and entrepreneurship New plants, firm growth Entrepreneurship Attitudes Activity Aspirations National Economic Growth 4
Measuring Entrepreneurship Activity Discontinuation of Business Total Early-Stage Entrepreneurial Activity (TEA) Potential Entrepreneur: Opportunities, Knowledge, and Skills 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) 5
Efficiency- Innovation- Driven Driven Innovation-Driven Factor-Bosnia Efficiency- and Innovation- Belgium, Denmark, DrivenHerzegovina, Finland, DrivenFrance, Driven Germany, Egypt, Greece, Iran, Croatia, Iceland, Ireland, United States and Italy, Eastern Netherlands, Pakistan, Hungary, Norway, Portugal, Western Europe MENA/Sout Factor- Efficiency- Innovation- Spain, Sweden, Switzerland, Latvia, hasia Saudi Europe United Factor- Driven Driven Driven Kingdom, Macedonia, Efficiency- Tunisia Slovenia Israel Arabia, Factor-Driven Efficiency-Driven United States West Bank Montenegro, Driven Australia, Malaysia, Argentina, and Asia Angola, Brazil, Gaza Romania, Japan, Latin America Vanuatu China, Chile, Sub- Colombia, Pacific Russia, Republic and Jamaica, Ghana, South Saharan Taiwan Costa Rica, Turkey of Korea Guatemala, Uganda, Africa Caribbean Ecuador, Africa Mexico, Bolivia Zambia Peru, Trinidad and Tobago, Uruguay GEM Countries 6
Small Business Administration Regions MW7: IA,KS, MO, NE MW5: IL, IN, MI, MN, OH, WI S6: AR, LA, NM,OK,TX S4: AL, FL, GA, KY, MS, NC, SC, TN
Perceived Opportunities and Capabilities: U.S.A. 7 6 5 4 3 2 1 2000 2002 2004 2006 2008 2010 2012 Opportunity Skills Fear of Failure
Perceptions about Entrepreneurship in the U.S.A. 8 7 6 5 4 3 2 1 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Career Choice Social Status Media Coverage
Attitudes: Regional Differences in 2009-2010 7 6 5 4 3 2 1 S4 MW5 S6 MW7 National Opportunity Skills Fear of Failure S4: AL, FL, GA, KY, MS, NC, SC, TN S6: AR, LA, NM,OK,TX MW5: IL, IN, MI, MN, OH, WI MW7: IA,KS, MO, NE
1 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% Entrepreneurial Activity Rate in the U.S.A. 2000 2002 2004 2006 2008 2010 2012 Nascent New Business Established Business
Entrepreneurial Activity Rate: Regional Differences in 2009-2010 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% S4 MW5 S6 MW7 National Nascent New Business Established Business S4: AL, FL, GA, KY, MS, NC, SC, TN S6: AR, LA, NM,OK,TX MW5: IL, IN, MI, MN, OH, WI MW7: IA,KS, MO, NE
Age Distribution among U.S. Early-stage Entrepreneurs 10 9 8 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 Years 18-24 25-34 35-44 45-54 55-64 65 +
Gender Differences in the U.S. Entrepreneurial Activity 18.0% 16.0% 14.0% 12.0% 1 8.0% 6.0% 4.0% 2.0% 2000 2002 2004 2006 2008 2010 2012 TEA Male TEA Female
Gender Differences across Regions: Entrepreneurial Activity in 2009-2010 14.0% 12.0% 1 8.0% 6.0% 4.0% 2.0% S4 MW5 S6 MW7 National Male Female S4: AL, FL, GA, KY, MS, NC, SC, TN S6: AR, LA, NM,OK,TX MW5: IL, IN, MI, MN, OH, WI MW7: IA,KS, MO, NE
Necessity versus Opportunity: U.S.A. 12.0% 1 8.0% 6.0% 4.0% 2.0% 2000 2002 2004 2006 2008 2010 2012 Opportunity Necessity
Necessity Versus Opportunity: Regional Differences in 2009-2010 10 9 8 7 6 5 4 3 2 1 S4 MW5 S6 MW7 National Opportunity Necessity S4: AL, FL, GA, KY, MS, NC, SC, TN S6: AR, LA, NM,OK,TX MW5: IL, IN, MI, MN, OH, WI MW7: IA,KS, MO, NE
4 Developing Innovative Products: U.S.A. 35.0% 3 25.0% 2 15.0% 1 5.0% 2000 2002 2004 2006 2008 2010 2012 Entrepreneurs Established Businesses
Innovative Products: Regional Differences in 2009-2010 4 35.0% 3 25.0% 2 15.0% 1 5.0% S4 MW5 S6 MW7 National Entrepreneurs Establishes Businesses S4: AL, FL, GA, KY, MS, NC, SC, TN S5: AR, LA, NM,OK,TX MW6: IL, IN, MI, MN, OH, WI MW7: IA,KS, MO, NE
Job Growth Expectations in the U.S.A. (Adding 6 or more jobs in 5 years) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 2000 2002 2004 2006 2008 2010 2012 Entrepreneurs Established Businesses
5 45.0% 4 35.0% 3 25.0% 2 15.0% 1 5.0% *in next 5 years Job Growth Expectations for Entrepreneurs in the U.S.A.* 2000 2002 2004 2006 2008 2010 2012 No Jobs 1-5 Jobs 6-19 Jobs 20 + Jobs
Job Growth Expectations for Established Businesses * 5 45.0% 4 35.0% 3 25.0% 2 15.0% 1 5.0% 2000 2002 2004 2006 2008 2010 2012 No Jobs 1-5 Jobs 6-19 Jobs 20 + Jobs *in next 5 years
Job Growth Expectations: Regional Differences in 2009-2010* 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% S4 MW5 S6 MW7 National Entrepreneurs Establishes Businesses S4: AL, FL, GA, KY, MS, NC, SC, TN S5: AR, LA, NM,OK,TX MW6: IL, IN, MI, MN, OH, WI *Adding 6 or more jobs MW7: IA,KS, MO, NE
Findings U.S. continues to rank high in entrepreneurial activity though composition of entrepreneurial activity is changing More from established businesses The gender gap is narrowing Necessity-driven entrepreneurship increased while rates of opportunity-driven ventures dropped significantly Relative prevalence of high-growth expectations in both earlystage entrepreneurs and established business owners Entrepreneurs: more optimistic about future but finding business success is becoming more elusive Funding falls Midwest saw the greatest rebound GEM 2010
Implications Facilitate Necessity/ Encourage Opportunity Ensure both Stability and Dynamism Look Beyond a Simple Count of Entrepreneurs Ensure Entrepreneurship is Available to All Groups in Society Promote Entrepreneurship Mindset Across Society 25
People become entrepreneurs, and in so doing, create sources of income for their families. They bring to life new products and services that provide value and improvements to their communities and to those around the world. As such, they create jobs and contribute to the economic development and comparative advantage of their societies. www.gemconsortium.org Thank You
Back-up Slides
SBA Regions Region I Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont Region II New York, New Jersey, Puerto Rico, and The U.S. Virgin Islands Region III Delaware, Maryland, Pennsylvania, Virginia, Washington, DC, and West Virginia Region IV Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee Region V Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin Region VI Arkansas, Louisiana, New Mexico, Oklahoma, and Texas Region VII Iowa, Kansas, Missouri, and Nebraska Region VIII Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming Region IX Arizona, California, Guam, Hawaii, and Nevada Region X Alaska, Idaho, Oregon, and Washington