1.2: Global Entrepreneurship Monitor Flashcards
What is the purpose/goal of the GEM and how many countries does it cover?
- To study the causes and implications of entrepreneurial activity across countries
- To improve our understanding of the relationship between entrepreneurship and national development
• 73 participating countries as of 2014
What are the 3 stages of the life of business owners and what are their characteristics?
• Nascent entrepreneurs:
– They commit resources for a business they expect to own themselves – have not paid wages for more than three months
• New business owners:
– Individuals who are currently owners of a company they help manage – own part or all of this business
– Have received wages / salaries up to 42 months
• Established business owners:
– Own and manage a business that has been running for more than 42 months.
What are the two types of entrepreneurs?
– Opportunity entrepreneurs: exploit business opportunities
– Necessity entrepreneurs: start a business because they do not have better employment alternatives
What are the three types of countries studied in GEM according to their economic activities, how does economic development compare across them, and what kind of entrepreneurship generally occurs?
• Factor-driven countries:
– Low level of economic development, with a large agricultural sector; industrial activity starts to develop, often around the extraction of natural resources; this leads to a migration from agriculture to industry and to an oversupply of labor, from which necessity entrepreneurship develops
• Efficiency-driven countries:
– As industry develops further, economies of scale are built and productivity increases; this leads to capital formation which finances an emerging small-scale and medium-sized manufacturing sector
• Innovation-driven countries:
– Industrial activity gradually shifts towards a service sector; due to an increasing R&D and knowledge intensity, small and innovative new ventures have an advantage over incumbents; necessity entrepreneurship is replaced by opportunity entrepreneurship
What are the three things that the GEM measures (AAA)?
The GEM Adult Population Surveys ask a representative sample of at least 2.000 adults in each country about:
• Entrepreneurial attitudes (perceived opportunities and capabilities, intentions, fear of failure)
• Entrepreneurial activity (nascent entrepreneurship, new business ownership, established ownership)
• Entrepreneurial aspirations (high-growth expectation/early- stage entrepreneurial activity)
Why could there be a difference of Total early-stage Entrepreneurial Activity between Germany and the USA?
There’s no right percentage of entrepreneurship. For example, in Germany there’s a low % of new ventures, but there is also a low% of failures. The difference could be because of different perception, psychology, and societal values.
What’s the difference of TEA % between males and females for factor, efficiency, and innovation driven entrepreneurship?
% of adult male/female population:
- Factor-driven: Same % of males and females (16%).
- Efficiency-driven: More % of males than females (17% vs 13%).
- Innovation-driven: More % of males than females (11% vs 7%).
What could explain the male-female gap in entrepreneurship, and how is this trend changing?
Main driver is perception (to explain male-female gap), as women appear to be less confident. Where over-confidence is a main driver of entrepreneurship, and men usually are overconfident.
The men-women ratio is becoming smaller with the years.
Is the rate of 18-24 aged entrepreneurs larger than the rate of 55-64 aged entrepreneurs in Germany for Innovation-driven Companies?
No, each are 3.4%.
How do ages of entrepreneurs compare across each type of economic activity?
Oldest: Factor-driven
Middle: Efficiency-driven
Youngest: Innovation-driven
What is the most common personality trait of all types of entrepreneurs?
Believing they have the required skills and knowledge: overconfidence.
What is the trend of the perception of good opportunities to found a company in Germany from 2002 to 2017?
It is a positive trend. 20 vs. 45% of people who believe so.
How does the overconfidence level of Germany compared to that of 23 other countries studied by the GEM in 2017?
- GEM 2017: In Germany 37% of adults (age 18-64) surveyed consider themselves capable enough to implement a business founding.
- Germany is ranked 19 of 23 reference countries
What are the main reasons in Germany for founding an innovation-driven company compared to other countries?
- Public support programs
- Consultation and eager suppliers for new companies
- Financing opportunities
What are the main sources of financing (more than 50%) in Asia, Africa, Europe, Latin America, and North America?
- Asia: Family
- Africa: Family
- Europe: Family and Banks
- Latin America: Family and Banks
- North America: Banks and Government
