Summer school “Entrepreneurship in Russia: theory and practice, research methodology” Golits y no

1. Russian Early Entrepreneurship Under Global Crisis Conditions Summer school “Entrepreneurship in Russia: theory and practice, research methodology” Golitsyno August 2009 Moscow GEM team State University – Higher School of Economics

2. Research Conceptual Model: GEM Methodology • Entrepreneurship – any attempt to start new business – e.g. self-employment, creating a new business venture or expanding of existing business – made by an individual, a group of people or a company. • Crisis conditions: • w • w • w Changes in structure and strategies Production declines Unemployment rate increases Incomes decrease Demand goes down Narrowing of financial markets Limited access to financial resources

3. GEM Data Description and Analytical Opportunities • Level of entrepreneurial activity in Russia • contribution of the entrepreneurial activity to the economic growth • Internal structure of entrepreneurship (socio-demographic etc.)Entrepreneurial framework conditions • Level of entrepreneurial activity • National level Dynamics comparisons • International level

4. Some main indicators of EE in Russia * % of adult population

5. “A social enterprise is any business venture created for a social purpose–mitigating/reducing a social problem or a market failure–and to generate social value while operating with the financial discipline, innovationand determination of a private sector business” Virtue Ventures The Phenomenon of Social Entrepreneurship: new, urgent and multifaceted • Criteria for Social Entrepreneurship • Social Purpose • Enterprise Approach • Self-repayment and financial sustainability • Process of continuous innovation, adaptation, and learning* • Heightened accountability to the constituencies served and for the outcomes created* • *J. Gregory Dees: “The Meaning of “Social Entrepreneurship” • Accepted approaches: • Social Entrepreneurship as an institution that provides support to particular stratas of society • Social Entrepreneurship as a method of economic growth stimulation • Social Entrepreneurship as a system of solving social problems in contrast to Government Saint Petersburg 3 Moscow 3 Urals 9 South 3 Volga 5 Other Central Cities 6 Siberia 5

6. EE distribution by types of settlement: Tendencies Revelation

7. Impact of Crisis: Main Hypotheses Hypothesis 1: Additional reasons for business discontinuation under crisis • Due to the worsening of macroeconomic situation rate of business discontinuation increases Increase in business discontinuation rate in small and medium towns Hypothesis 2: Change of financial resources accumulation under crisis • Narrowing of financial markets leads to increase of ‘team entrepreneurship’ being a strategy of economic capital accumulation Diminishing of possibilities for self-investing and growing importance of informal financing

8. Shares of nascent and discontinued entrepreneurs in the sample Business Discontinuation by Type of Settlement Shares of discontinued entrepreneurs, by type of settlement • The level of discontinued businesses has risen significantly (t-criterion, 95%) • The changes in the discontinuation rate are not statistically significant across different settlement types • (Chi-square criterion, α = 5%)

9. Team Entrepreneurship: Tool to Accumulate Financial Capital Financial sources attracted by early entrepreneurs Team entrepreneurship rate (TER) dynamics • According to T-criterion at the 95% confidence level the changes in TER are substantial • Lack of own funds is one of the factors of the team entrepreneurship growth (Chi-square nonparametric test, 95%) • According to T-criterion at the 95% confidence level the concentration of informal funds is increasing • Expected returns doesn’t define the readiness of informal investors to put money into business (Chi-square nonparametric test, 95%)

10. Summary and Implications Some evidences: Recommendations to: • Novice entrepreneus: check opportunities of team and social entrepreneurship • Government:spend in entrepr. education, support social networks (business angels, venture capitalists etc.) to combine or join financial resources • Researchers:crisis impact factors identification and broader outlook at the process

11. Thank You for Your Kind Attention!