Entrepreneurship Indicators Project Developing Comparable Measures of Entrepreneurship and the Factors That Enhance or Impede It Tim Davis OECD Statistics Directorate Istat-Eurostat-OECD Seminar on Entrepreneurship Indicators Rome, December 6/7,

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Entrepreneurship Indicators Project Developing
Comparable Measures of Entrepreneurship and the
Factors That Enhance or Impede ItTim Davis
OECD Statistics Directorate Istat-Eurostat-OECD
Seminar on Entrepreneurship IndicatorsRome,
December 6/7, 2006

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Entrepreneurship Indicators Project

• Background
• Fundamental Aims of the Project
• Definition and Measurement Issues
• Some Existing Measures and Issues
• Setting Indicator Priorities
• Examples of Entrepreneurship Indicators
• Engaging Countries and Other Participants
• Discussion and Decisions on initiatives by
  Entrepreneurship Indicators Steering Group

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BackgroundEntrepreneurship Indicators Project

• Long history of OECD and other interest in E-Ship
• Numerous OECD entrepreneurship studies

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Entrepreneurship-Related Work at OECD

• SMEs and Employment Creation, 1996
• Fostering Entrepreneurship, (Jobs Strategy), 1998
• Women Entrepreneurs in SMEs, 1998
• Small Business, Job Creation and Growth, 1998
• Impact of Product Market Regulation, 1999 and
  2005
• Linking Entrepreneurship to Growth, 2000
• Business Views on Red Tape, 2001
• Entrepreneurship and Local Development, 2003
• Firm Demographics and Survival, 2003
• Factors of Success and Statistical Strategies,
  2002
• Fostering Firm Creation and Entrepreneurship,
  2004
• Micro-Policies for Growth and Productivity, 2005

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BackgroundEntrepreneurship Indicators Project

• Long history of OECD and other interest in E-Ship
• Numerous OECD entrepreneurship studies
• Explicit policy priority for virtually all
  countries
• Entrepreneurship programs in most countries
• For - Employment, growth and productivity
• - Newly-developing market economies
• - Target groups
• Little explicit entrepreneurship data at NSOs
• Little sustained international statistical
  development

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BackgroundEntrepreneurship Indicators Project

• Demand for data from OECD Ministerial in Istanbul
• OECD created Centre for Entrepreneurship (CFE)
• Feasibility Study
• There are data gaps. There are potential data
  sources
• Strong demand for harmonised definitions and data
• Member-country interest and support
• Financial support and a push from
• Kauffman Foundation
• International Consortium for Entrepreneurship
  (ICE)
• Will countries accept to harmonise? Invest in
  data?
• Strong, cautious YES from OECD Statistics
  Committee

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Fundamental Aims of the Project

• Compile and publish a Compendium on
  Entrepreneurship
• STEPS
• Develop a Measurement Handbook Framework,
  standard definitions and measurement tools
• Establish Indicator Priorities Identify data
  required by policy-makers to measure E-Ship and
  underlying factors
• Develop Existing Data and Pilot survey questions
• Engage national and international bodies so that
  money and effort will be devoted to producing
  data

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Advantages of OECD-Led International Survey

• Policy-relevant statistics driven by countries
• Established fora for policy-statistics
  collaboration
• Extensive network of key countries
• Share methodological developments
• Standard definitions, concepts
• Economies of scale re questionnaires, tools
• Linkages to NSOs and Registers
• Experience established through other
  international measures (PISA, PIAAC)

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What is Entrepreneurship? - Definitions

• An attitude? A behaviour? A specific economic
  activity?
• Numerous definitions exist
• Ability to marshal resources to capitalize on
  opportunities
• Willing to take risks, be innovative exploit
  opportunities
• None of these are limited to new or small firms
• Term is often (incorrectly) applied to leaders,
  hard workers, innovators, any SME or anyone in
  business
• Should we include
• Entrepreneurship in existing even old firms
• Are take-overs and transitions entrepreneurship?

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What is Entrepreneurship? - Measures

• For some
• Its self-employment the act of creating new
  firms
• More firm creation leads to more high growth
• Research shows thats not true
• But for others, including EIP, it is more
• Entrepreneurship is the process leading to the
  creation and growth of businesses
• Must measure both creation and growth
• Distinguish self-employment identify size class
• Creation of firms not sole, or most important,
  objective

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Existing Data

• Little cross-national uniformity of data
• GEM broad coverage but limited firm information
• World Bank Entry Rates and Doing Business
• Eurobarometer and European Observatory
• EIM Compendium Self-employment/SME data
• Some national data sets
• Eurostat FoBS US (Kauffman) Surveys and Index
• Well established firm survey in France HHLD
  survey in UK
• UK, Canadian, Eurobarometer surveys on SME
  financing
• Numerous measures of attitudes on
  entrepreneurship
• Business Demography Eurostat, OECD

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Setting Indicator Priorities

• Several categories of Indicators
• Entrepreneurship Performance or Degree of E-Ship
• Framework Conditions or Determinants of E-Ship
• Attributes of entrepreneurs and entrepreneurial
  firms
• Some indicators link to policy e.g. Education
• Others enhance knowledge and help target
  programs
• e.g. Age, Entrepreneurial Heredity

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Entrepreneurship Performance Indicators

• Firm start-up rates, by size category
• Measures of high-growth firms
• 
  
  
• Business ownership Business density
• Entrepreneurial activity (TEA)
• Population involved in business creation
• Relative importance of SME sector
• Growth in SME payrolls
• Degree of entry and exit churn
• Firm survival rates
• Number of university spin-offs created

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Framework Condition Indicators

• Entrepreneurship education
• Access to financing
• Taxation and incentives
• Innovation and RD
• Access to technology
• Re-start possibilities Bankruptcy environment
• Ease of entry Administrative burdens
• Patents and patent productivity
• Infrastructure and Quality of life

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Attributes of Entrepreneurs

• Demographic characteristics of entrepreneur
• Citizenship, family history of entrepreneurship
• Industry experience
• Previous failures
• Employment and financial characteristics

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Engaging Participants to Move Forward

• Overall direction through OECD Steering Group
• All OECD countries involved through Statistics
  Committee
• Close collaboration with Eurostat
• Collaboration with other data providers
• World Bank, EIM (Netherlands)
• Venture Capital and Private Equity Associations
• Ongoing search for financial and intellectual
  support

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Entrepreneurship Indicators Steering Group

• Australia
• Denmark
• Germany
• Korea
• Hungary
• USA

• Canada
• Finland
• Italy
• Netherlands
• UK
• European Commission

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Steering Group Meeting

• Agreed to ambitious Work Programme
• Task Force set up to refine definition of
  Entrepreneurship
• Broad agreement on list of Indicators
• Task Force to finalise initial set of core
  indicators
• Inventory of Entrepreneurship Data sources for
  Fall 2007
• Study on defining High Growth March 2007
• Study on data sources re Equity Finance June
  07
• Joint Eurostat/OECD Data Collection on Start-Up
  Rates High Growth firms

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Steering Group Meeting

• Work Programme (Continued)
• Draft Measurement Handbook Fall 07
• Mini-Compendium of Entrepreneurship Indicators
  Fall 07
• Other initiatives
• Collaborate with EIM Research Group (Netherlands)
  on Self-Employment Business Ownership
• Joint work with EIM on other Measures
• Potential work with World Bank on new firm entry
  data extending beyond OECD/Eurostat

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To contact us

• Julia.gauch_at_oecd.org
• Coordination and Equity Finance Project
• Eric.gonnard_at_oecd.org
• High Growth Project and Start-Up Data
• tim.davis_at_oecd.org
• Project Manager