Entrepreneurship Thought for the Day:

1. Entrepreneurship Thought for the Day: Entrepreneurship is the transformation of an idea into an opportunity. Jeff Timmons Babson College

3. But that’s not what I came here to talk to you about. Arlo Guthrie Alice’s Restaurant

4. Global Entrepreneurship Monitor 2000 NGA Policy Academy Palm Springs, California November 16, 2000

5. What is GEM 2000? • Collaborative effort of the world’s best scholars in entrepreneurship to study the relationship between entrepreneurship and economic growth. • Comparable assessment in 21 countries (compared to 10 in 1999). • Based on a sample survey of the adult population, in-depth interviews with national experts on entrepreneurship in each country, and standardized secondary data.

6. GEM2000 Focuses on Three Questions: • Does the level of entrepreneurial activity vary between countries, and if so, by how much? • Does the level of entrepreneurial activity affect a country’s rate of economic growth? • What makes a country entrepreneurial?

7. Finding One: The level of entrepreneurship differs significantly between countries.

8. Finding Two: Entrepreneurship is strongly associated with economic growth? • The level of entrepreneurial activity explains 70 percent of the difference in economic growth among nations. • All nations with high levels of entrepreneurial activity have above average rates of economic growth. • Only a few nations that have above average rates of economic growth have low levels of entrepreneurship.

9. Finding Three: Most firms are started and operated by men with peak entrepreneurial activity among those aged 25-34.

10. Finding Four: Financial Support is highly associated with the level of entrepreneurial activity.

11. Finding Five: Education plays a vital role in entrepreneurship. • Taken alone, post-secondary education explains 40 percent of the difference in entrepreneurial activity among GEM countries. • Entrepreneurship education was ranked among the top priorities by experts interviewed in all of the GEM countries.

12. Finding Six: The perceived social legitimacy of entrepreneurship makes a difference.

13. National Expert Analysis

14. Public Policy Implications • Promoting entrepreneurship, its role in society and the opportunities it presents for personal gain, appear to be critical for facilitating economic growth. • Policies geared toward enhancing the entrepreneurial capacity of a society (i.e., the skills and motivation to pursue opportunities) will have the greatest impact on the level of entrepreneurial activity. • Increasing the participation of women and minorities in entrepreneurship is necessary for long-term economic prosperity.

15. Public Policy Implications (continued) • For the greatest long-term impact, policies should encourage the involvement of people younger than 25 and older than 44 in the entrepreneurial process. • Any government committed to sustained economic progress must ensure that all aspects of its economic system are conducive to and supportive of increased levels of entrepreneurial activity. This includes minimizing taxation, ensuring access to labor, lowering non-wage labor costs, reducing the regulatory burden and making it easier to do business with the government.

16. Public Policy Implications (continued) • Policies should facilitate the development of a professional venture capital industry and create incentives for private individuals to invest directly in early-stage businesses. [NOTE: Private capital investment in the U.S. ($63+ billion in 1999) outpaced investment by the venture capital industry ($46 billion).]