Entrepreneurship Indicators

Entrepreneurship Indicators A joint OECD / Eurostat project OECD/Eurostat 2007axel.behrens@ec.europa.eu

Task force on entrepreneurship indicators – manual drafting group • Chair: Eurostat • Composition: • OECD • European countries: Denmark, Latvia, Sweden, Germany, Portugal, Estonia, Italy • Non-European countries: Canada, United States • European Commission: Eurostat, DG Enterprise • Meetings: Feb 2007, May 2007, planned Sep 2007 Entrepreneurship Indicators- Performance, Determinants and Impact OECD/Eurostat 2007axel.behrens@ec.europa.eu

Task force on entrepreneurship indicators – manual drafting group • Main results and conclusions (1): • This group would take first steps in drafting a methodological manual on entrepreneurship. • The core part of the manual will be a harmonized list of indicators, structured as appropriate, with related reference documents. It was agreed that there needs to be room for the development of future indicators. • The important role of business demography for the entrepreneurship project was highlighted. Therefore it was considered to be crucial to publish as soon as possible the methodological manual for business demography • Eurostat will commit significant resources for future entrepreneurship statistics within its new MEETS programme Entrepreneurship Indicators- Performance, Determinants and Impact OECD/Eurostat 2007axel.behrens@ec.europa.eu

Task force on entrepreneurship indicators – manual drafting group • Main results and conclusions (2): • It was agreed to set a threshold for firm creation with the “employer firm birth (death) rate” indicating the emergence of a new firm with at least one employee. • There was agreement on the remainder of sections A and B of the matrix list, it was proposed to merge both, as the border lines are not so clear cut. These would be the core indicators describing the performance of an economy in terms of entreprenership. Entrepreneurship Indicators- Performance, Determinants and Impact OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact • Task force on entrepreneurship indicators – manual drafting group • Main results and conclusions (3): • In view of the significant political interest in self employment in the EU and beyond, it was decided to consider LFS data as a promising source to measure the rate of self employment and other indicators related to the entrepreneur (as a person). • It was decided to use the experiences gained in the Eurostat pilot project on linking trade data and enterprise variables for the analysis of entrepreneurship effects on export and for the measurement of export propensity of new firms. OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Task force on entrepreneurship indicators – manual drafting group Main results and conclusions (4): • On indicators related to high growth, it was agreed that indicators of high growth will be included in the core list of Entrepreneurship Indicators but a final decision on the precise terms of the definitions will await the findings of the workshop to take place in the fall. • The group concluded consensus on the basic structure of the matrix list. It was proposed to present the the basic structure of this list for approval to the Istanbul meeting of the EISG. At the same time EISG is requested to give the mandate to draft a manual to this group. OECD/Eurostat 2007axel.behrens@ec.europa.eu

The list of indicators A joint OECD / Eurostat project OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact The question is, what we have to measure to provide the necessary information to policy makers in the context of entrepreneurship OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact The first component of the measurement relates to the state of the economy with regard to the entrepreneurship phenomenon OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact The second component of the measurement relates to factors that might have an inpact on the entrepreneurship phenomenon and that can be subjected to political control OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact The third component of the measurement relates to policy targets that may be influenced by the entrepreneurship phenomenon OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact We had very little time OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Performance Determinants Impact (= policy targets) OECD/Eurostat 2007axel.behrens@ec.europa.eu

Performance 19 indicators Entrepreneurship Indicators- Performance, Determinants and Impact Firm births and deaths Firm survival Employment in new firms Competitiveness contribution OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Determinants ~ 50 indicators grouped in 6 categories Market conditions Access to finance Technology and infrastructures Supply of entrepreneurial spirit Entrepreneurship culture Regulatory framework OECD/Eurostat 2007axel.behrens@ec.europa.eu

Impact 12 potential policy target areas Creation of more and better jobs Globalization challenges mastered Entrepreneurship Indicators- Performance, Determinants and Impact Economic growth Technological changes utilized Productivity growth Reduction of informal economy Increased SME competitiveness Enhancement of job satisfaction “Lead markets” created Growth of workforce flexibility Poverty reduction Emigration of talent stopped OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Performance Determinants Impact OECD/Eurostat 2007axel.behrens@ec.europa.eu

Performance 19 indicators Entrepreneurship Indicators- Performance, Determinants and Impact Firm births and deaths Employer firm birth rate Employer firm death rate Business churn Net business population growth OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Performance 19 indicators Firm survival Survival rate among 3-year old businesses Survival rate among 5-year old businesses Proportion of young firms with 3-year survival Proportion of young firms with 5-year survival OECD/Eurostat 2007axel.behrens@ec.europa.eu

Performance 19 indicators Entrepreneurship Indicators- Performance, Determinants and Impact Employment in new firms Self employment: Business ownership rate among start-ups Self employment: Business ownership rate in total firm population Employment rate in 3 (and/or 5) year old firms Average firm size by employees after 3 (and/or 5) years Percentage of adults in population starting a new firm per month OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Performance 19 indicators Competitiveness contribution Rate of high-growth firms by employment and/or turnover “Gazelles”: Rate of young high-growth firms by employment and/or turnover Value-added contribution by new firms Contribution of firms to productivity growth by size Contribution of firms to productivity growth by age Export propensity of new/small firms OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Task force on entrepreneurship indicators – manual drafting group Proposals to the EISG in detail • The EISG is asked to approve the list of performance indicators and to mandate the MDG to produce a manual, where these indicators are described in detail. This manual should become a joined Eurostat/OECD manual, preferably supported also by other international organisations, and should lead to a situation that all data produced on the basis of this manual would be internationally comparable. • To keep the current momentum, a first publication of data according to this list is planned before the end of 2007. OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Performance Determinants Impact OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Determinants ~ 50 indicators grouped in 6 categories Market conditions Access to finance Technology and infrastructures Supply of entrepreneurial spirit Entrepreneurship culture Regulatory framework OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators- Performance, Determinants and Impact Task force on entrepreneurship indicators – manual drafting group Proposals to the EISG in detail (2) • As far as the determinants of entrepreneurship are concerned, the MDG is proposing to the EISG to agree to the list of 6 areas of interest. Work on these areas is in different stages of development. • Work from different sources may feed these areas. In some cases this goes beyond the sphere of National Statistical Offices, i.e. goes beyond official statistics. A combination of sources is possible. • These areas should give a frame for work in the different fields. OECD/Eurostat 2007axel.behrens@ec.europa.eu

Performance Determinants Impact Entrepreneurship Indicators Creation of more and better jobs Firm births and deaths Market conditions Access to finance Technology and infrastructure Supply of entrepre neurial spirit Entrepre- neurship culture Regulatory framework Economic growth Employer firm birth rate Employer firm death rate Business churn Productivity growth Net business population growth Competition, competitive arena Measures for debt financing University / industry interface Characteristics of entrepreneurs Risk attitude in societies Firm start, close, exit and bankruptcy regulation Firm survival Creation of “lead markets” Anti-trust laws Cost of debt financing by firm size Technological cooperation between firms Education and experience of entrepreneurs Attitudes towards entrepreneurs Survival rate 3 years Days to start Increased SME competitiveness Survival rate 5 years Procedures Proportion 3 years survival Cost to start Proportion 5 years survival Degree of public ownership VC invest ment as % of GDP Time to close Poverty reduction Industrial technology transfer Desire for business ownership Employment in new firms Business and E-ship education Bankruptcy stigma Performance, Determinants and Impact Degree of public involvement Fiscal environment Technological changes utilized Ownership rate start-ups Private Equity in % of GDP Communication: Broadband access Ownership rate business population Employment rate young firms E-ship support infrastructure Court-legal framework Average firm size after 3 years Access to the domestic market, public procurement Globalization challenges mastered % adults starting firms Business angel financing Competitiveness contribution Patent system, standards Safety and health regulation Immigration and E-ship Reduction of informal economy Access to foreign markets Rate of high-growth firms Mezzanine financing R&D and Innovation data Intrapre neurship opportunities Rate of Gazelles Labour market regulation Enhancement of job satisfaction Value-added young firms Export share of young firms Productivity contribution Employment VC-backed firms Productivity growth contribution Export propensity Product regulation Growth of work force flexibility Measures of export credits Credit guarantees Environment regulation Emigration of talent stopped OECD/Eurostat 2007axel.behrens@ec.europa.eu

Entrepreneurship Indicators