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GLOBAL ENTREPRENEURSHIP MONITOR – Italy 2008 Executive Report Guido Corbetta Alexandra Dawson Giovanni Valentini EntER Centro di Ricerca Imprenditorialità e Imprenditori Centre for Research on Entrepreneurship and Entrepreneurs

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Page 1: GLOBAL ENTREPRENEURSHIP MONITOR – Italy 2008 Executive ... · GLOBAL ENTREPRENEURSHIP MONITOR – Italy 2008 Executive Report Guido Corbetta Alexandra Dawson Giovanni Valentini

GLOBAL ENTREPRENEURSHIP MONITOR – Italy

2008 Executive Report

Guido Corbetta

Alexandra Dawson

Giovanni Valentini

EntER Centro di Ricerca Imprenditorialità e Imprenditori Centre for Research on Entrepreneurship and Entrepreneurs

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This report is in English, with an Executive Summary available in English and Italian

Questo rapporto è stato scritto in inglese, con una sintesi dei principali risultati disponibile sia in inglese che in italiano

The authors gratefully acknowledge the generous financial support of Ernst & Young and Atradius Credit Insurance

Although GEM data were used in the preparation of the report, their interpretation and use are the sole responsibility of the authors.

© 2009 EntER, Bocconi University and GEM consortium

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Index

1. Introduction…………………………………………………………………………………… 6

1.1. The Global Entrepreneurship Monitor (GEM) project……………………………………………. 6

2. Executive Summary…………………………………………………………………………. 8

2.1. Entrepreneurial attitudes…………………………………………………………………………...8

2.2. Entrepreneurial activity………………………………………………………………………...…. 8

2.3. Entrepreneurial aspirations………………………………………………………………………... 9

2.4. Key findings in Italy……………………………………………………….…………………...…9

3. Sintesi del rapporto……………………………………………………………….....….…..11

3.1. Atteggiamenti imprenditoriali …………………………………………………………….……11

3.2. Attività imprenditoriali…………………………………………………………………...............11

3.3. Aspirazioni imprenditoriali………………………………………………………………………12

3.4. Principali risultati per l’Italia …………………………………………………………………12

4. Entrepreneurial attitudes, activity and aspirations in Italy and other GEM countries…………………………………………………………………………….…..……..14

4.1. Measuring entrepreneurial activity………………………………………………………………14

4.2. Explaining the variance in the level of entrepreneurial activity………………………….……...16

Economic development……………………………………………………………….................16

Entrepreneurial attitudes and perceptions……………………………………………………….18

Education…………………………………………………………………………………. ……..20

Entrepreneurial motivation………………………………………………………………………23

4.3. The distribution of entrepreneurial activity: a focus on Italy…...……………………………….24

Sector distribution……………………………………………………………………….............24

Regional distribution………………………………………………………………….................24

Age and gender structure……………………………………………………………...................25

4.4. Entrepreneurial aspirations………………………………………………………………………27

4.5. Business discontinuation………………………………………………………………………...31

4.6. Innovation confidence index…………………………………………………………………….32

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4.7. The national experts survey…………………………………………………………………….33

5. Implications for public policy…………………………………………………………..38

Appendix 1: GEM’s definition of entrepreneurship and data sources………………………………….40

Appendix 2: Glossary of main measures and terminology……………………………………………...42

Appendix 3: How GEM data differ from other measures of entrepreneurship………………….............43

Appendix 4: GEM Website and Data Availability………………………………………………………44

Appendix 5: Contacts and Authors……………………………………………………………………....45

Appendix 6: GEM Italy Sponsors………………………………………………………………………..46

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Exhibits Exhibit 1: GEM countries in 2008 by stage of economic development ......................................................................... 6 Exhibit 2: Prevalence rates (expressed in %) of entrepreneurial activity and business owner-managers, for those aged 18-64, by phase of economic development, 2008 ........................................................................................................ 15 Exhibit 3: Early-stage entrepreneurial activity (TEA), by phase of economic development, showing 95% confidence intervals, 2008 .............................................................................................................................................................. 16 Exhibit 4: Evolution of the TEA index in 2002-2008, for selected innovation-driven GEM countries ....................... 16 Exhibit 5: Early-stage entrepreneurial activity rates and per-capita GDP, 2008 .......................................................... 17 Exhibit 6: Entrepreneurial attitudes and perceptions, by phase of economic development, 2008. Figures are expressed in % .............................................................................................................................................................................. 19 Exhibit 7: Percentage of the population aged 18-64 that received voluntary or compulsory training in starting a business during or after school, 2008 ........................................................................................................................... 21 Exhibit 8: Perceived need for and availability and quality of entrepreneurship education and training, by country and country group (average ratings by experts from 1 to 5), 2008 ...................................................................................... 22 Exhibit 9: Educational attainment by entrepreneurs in Italy (% involved in early-stage and established businesses), 2008 .............................................................................................................................................................................. 23 Exhibit 10: Necessity- and improvement-driven opportunity motivations as a percentage of early-stage entrepreneurial activity, 2008 ....................................................................................................................................... 24 Exhibit 11: Sector distribution by age of business in Italy, 2008 ................................................................................. 25 Exhibit 12: Regional distribution of entrepreneurial initiatives by age of business in Italy, 2008 ............................... 26 Exhibit 13: Early-stage entrepreneurial activity for separate age groups by age of business in Italy, 2008 ................. 26 Exhibit 14: Early-stage entrepreneurial activity rates by gender, 2008 ........................................................................ 27 Exhibit 15: Prevalence rates of high-growth expectation early-stage entrepreneurship (HEA) in the adult population in GEM countries, 2002-2008 ...................................................................................................................................... 29 Exhibit 16: Prevalence rates of high-growth expectation early-stage entrepreneurship (HEA) as a percentage of TEA in GEM countries, 2002-2008 ...................................................................................................................................... 29 Exhibit 17: Percentage of early-stage entrepreneurial activity with new product-market combination in GEM countries, 2002-2008 .................................................................................................................................................... 30 Exhibit 18: Percentage of early-stage entrepreneurial activity in technology sectors in GEM countries, 2002-2008 .. 30 Exhibit 19: Percentage of entrepreneurial activities in Italy exporting, 2008 ............................................................... 31 Exhibit 20: Expressed reasons behind discontinuing businesses in Italy, 2008 ........................................................... 31 Exhibit 21: Innovation Confidence Index in GEM countries, 2007-2008 .................................................................... 32 Exhibit 22: National Expert Survey in Italy and other innovation-driven countries, 2008 ........................................... 35 Exhibit 23: National Expert Survey scores in Italy vs. average of innovation-driven countries, 2008 ........................ 36 Exhibit 24: The entrepreneurial process and GEM operational definitions .................................................................. 40

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1. Introduction

1.1. The Global Entrepreneurship Monitor (GEM) project

Since its inception in 1997 by scholars at Babson College and London Business School, GEM has developed into one of the world’s leading research consortia concerned with improving our understanding of the relationships between entrepreneurship and national development. Over the past decade, harmonized data on entrepreneurial attitudes, activity and aspirations have been collected to provide annual assessments of the entrepreneurial sector for a wide range of countries.

EntER, Bocconi University’s Centre for Research on Entrepreneurship and Entrepreneurs, has carried

out GEM research activities in Italy since 2003. This report is the sixth annual assessment of GEM data in Italy. With regard to global data, the report draws extensively on the 2008 GEM Global Executive Report written by Niels Bosma, Zoltan J. Acs, Erkko Autio, Alicia Coduras and Jonathan Levie. The Global report can be downloaded, together with reports from other participating countries, from http://gemconsortium.org.

GEM is a consortium of national teams. The project has, from the start, been designed as a

multinational, harmonized research programme providing annual assessments of entrepreneurship in a wide range of countries. In 2008, 43 countries participated in the GEM project. More than 150,000 adults were interviewed between May and October (outside holiday seasons) and answered questions on their attitudes toward and involvement in entrepreneurial activity.

Participating countries are divided into three groups, based on the 2008 Global Competitiveness

Report, in order to take into account their stage of economic development. As previous GEM research has shown, the relationship between entrepreneurship and economic development differs along phases of economic development. Therefore, a distinction is made between factor-driven countries, efficiency-driven countries and improvement-driven countries.

Exhibit 1: GEM countries in 2008 by stage of economic development

Angola, Bolivia, Bosnia and Herzegovina*, Colombia*, Ecuador*, Egypt, India, Iran*

Factor-driven economies

Argentina, Brazil, Chile, Croatia**, Dominican Republic, Hungary**, Jamaica, Latvia, Macedonia, Mexico, Peru, Romania, Russia, Serbia, South Africa, Turkey, Uruguay

Efficiency-driven economies

Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Japan, Korea Republic, Netherlands, Norway, Slovenia, Spain, United Kingdom, United States

Innovation-driven economies

* Transition country: from factor-driven to efficiency-driven ** Transition country: from efficiency-driven to innovation-driven

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Although it is widely acknowledged that entrepreneurship is an important force shaping the changes in the economic landscape, the understanding of the relationship between entrepreneurship and development is still far from complete. The quest to unravel the complex relationship has been particularly hampered by a lack of cross-national harmonized data sets on entrepreneurship. Since 1997, the GEM Research Programme has sought to address this by collecting relevant harmonized data on an annual basis. GEM focuses on three main objectives:

• to measure differences in the level of entrepreneurial activity among countries;

• to uncover factors determining national levels of entrepreneurial activity;

• to identify policies that may enhance national level of entrepreneurial activity.

Traditional analyses of economic growth and competitiveness have tended to neglect the role played by new and small firms in the economy. GEM takes a comprehensive approach and considers the degree of involvement in entrepreneurial activity within a country, identifying different types and phases of entrepreneurship.

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2. Executive Summary

2.1. Entrepreneurial attitudes The GEM 2008 surveys were conducted mostly during May and June, when the start of the credit crisis

loomed but before the true impact of the current economic crisis became apparent. Nevertheless, an overall decline in perceived opportunities to start a business in 2008 was observed. Countries showing the severest declines in the rate of perceived opportunities (between 50% and 30%) include Iceland, Chile, Ireland, Latvia and Hungary. Italy also saw a reduction, with opportunity perception down by 25% in 2008. This level is comparable to the drop in Spain (-25%) and the UK (-23%).

Overall, perceived skills and knowledge to start a business were not notably affected by the business

cycle. Also, intentions to start a business within three years did not appear to decline as much in 2008 as perceived opportunities. There are several possible explanations for this. First, the crisis may actually cause individuals to seriously consider becoming entrepreneurs in the near future because they fear they might lose their jobs. Second, the group of (potential) future entrepreneurs may be less pessimistic than the total adult population and may not perceive the financial crisis as a substantial burden for getting their own business started – they might for instance draw more heavily on their own (perceived) capabilities to start a business. Thirdly, they may have decided to defer the start-up to near the end of the three year period, in the expectation that the recession will be over within three years.

Italy, however, was an exception to this global picture. Both perception of one’s skills and knowledge

to start a business and intentions to start a business within three years were down compared to 2007 levels, by 21% and 29% respectively. These were the sharpest drops in these two indicators among European countries, suggesting a more pessimistic perception of the economic situation in Italy than elsewhere.

2.2. Entrepreneurial activity In factor-driven economies, which are characterised by small and local business activities, the rate of

involvement is high for both early-stage entrepreneurial activity and established business activity. In efficiency-driven economies, a clear distinction can be made between Latin American countries –

with relatively high early-stage entrepreneurial activity – and Eastern European countries – with relatively low rates of early-stage entrepreneurial activity.

Among innovation-driven economies, the United States has more early-stage entrepreneurial activity

(10.8% of the adult population in 2008) than EU countries and Japan. The rate of early-stage entrepreneurship in Japan has gradually increased in recent years, reaching 5.4% in 2008, which is around the EU average. Some European countries – most notably Belgium and Germany – consistently have the lowest rates of entrepreneurial activity levels (2.9% and 3.8% respectively in 2008). Italy’s level of early-stage entrepreneurial activity in 2008 was 4.6%, which is higher than Belgium and Germany’s but lower than that in Spain (7.0%), the UK (5.9%), and France (5.6%). These differences possibly reflect the relative risk aversion of certain European countries and their declared relative preference for employment over self-employment. But it also indicates that there are good income alternatives available, through jobs or social security.

The overall development of early-stage entrepreneurial activity in innovation-driven economies has

been quite stable over time. A slight and gradual rise is observed, from 5.7% in 2002 to 6.4% in 2008. For efficiency-driven economies the pattern is more sensitive to the business cycle. Argentina in particular has

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shown a significant reaction to its national economic crisis; in 2001-2003 the Argentinean rate of necessity early-stage entrepreneurs rose from 3.9% to 7.4%.

2.3. Entrepreneurial aspirations Most of the nascent and new entrepreneurs identified in GEM show either no or only limited growth

aspirations. High-growth expectation entrepreneurial activity (HEA) – defined as the prevalence of new and nascent entrepreneurs who expect their business will employ at least 20 people in five years’ time – varies widely between countries, as does the relative prevalence of this activity within early stage entrepreneurial activity as a whole. For example, Colombia, China, Peru and Chile exhibit the highest prevalence rates of high-expectation entrepreneurship among the factor- and efficiency-driven GEM countries. The United States, New Zealand, Iceland, and Canada have the highest levels of high-growth expectation entrepreneurial activity in innovation-driven economies. The HEA rate for these countries is well over 1%. The lowest levels of HEA, at under 0.5%, occur in Belgium (0.3%), France (0.3%), Germany (0.3%), Spain (0.4%), Finland (0.4%) and Italy (0.4%).

2.4. Key findings in Italy

In 2008, 4.6% of the adult population (or one adult out of every 22) in Italy was involved in early-stage entrepreneurship, as a nascent or new entrepreneur. Entrepreneurial activity in Italy does not differ significantly from that in various other European countries, although it has not increased in the last few years. According to National Experts interviewed by GEM, early-stage business is mostly constrained by a lack of financial resources for new entrepreneurs, inadequate physical infrastructure, as well as little attention by government policy and a lack of effective government programmes. However, there are other structural problems, as highlighted by the World Economic Forum, which have still not been dealt with. These include a rigid labour market, which hinders job creation, and the inefficient use of public resources. There are also high business costs and low investor confidence. On a more positive note, GEM experts highlight the fact that becoming an entrepreneur in Italy is a desirable career choice, that there is a capacity for entrepreneurship (in terms of skills and abilities) among the population, fostering entrepreneurship, as well as support for innovation, both among consumers and among firms. The latter accounts for one of Italy’s strengths, according to the World Economic Forum, i.e. the sophistication of its business environment: in other words Italy’s businesses produce goods high on the value chain using the latest production processes.

As in other comparable, innovation-driven, countries, the typical early stage entrepreneur in Italy is male (the prevalence rate is more than double than among women), is in the 24-35 year old category (43% of all early stage entrepreneurs) and well educated (with a university degree). In terms of regional distribution, 48.2% come from the North of the country, 17.5% from the Centre and 34.2% from the South and the Islands. Northern regions display greater early-stage entrepreneurial vitality, with a ratio of early-stage entrepreneurship to population size equal to 1.06 (the ratio for central regions is 0.91 and for southern regions, Sicily and Sardinia 0.96).

Established business owners in Italy are also typically male (the prevalence rate is two and a half times that among women) and older than early-stage entrepreneurs (42% are in the 35-44 age bracket). While this is similar to France and Spain, established entrepreneurs tend to be older in other countries: for example in the US, UK and Germany they are mostly from the 45-54 age range and in Japan, Denmark and Finland from the 55-64 age range. Similarly to early-stage entrepreneurs, established ones are also well educated. In terms of regional distribution, 52.8% come from the North of the country, 17.6% from the Centre and 29.6% from the South and the Islands. Again, northern regions display the greatest entrepreneurial vitality, with a ratio of established entrepreneurs to population size equal to 1.16 (the ratio for central regions is 0.91 and for southern regions, Sicily and Sardinia 0.83).

As noted above, Italy has one of the lowest levels of high-growth expectation entrepreneurial activity (HEA), with only 0.4% new and nascent entrepreneurs who expect their business will employ at least 20

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people in five years’ time. However, both early-stage and established activities tend to have a good technology content (12.5% and 8.3%, respectively, are active in medium or high technology sectors), placing Italy towards the top of the GEM countries – only Denmark and Ireland perform better with regard to early-stage activities and Norway, Denmark and Hungary with regard to established businesses. The internationalization of activities is comparable to the rest of Europe. Around 55% of both early-stage and established activities do not export, while 35% of early stage activities and 33% of established activities have up to a quarter of their customers outside the country.

The insights gained from the additional survey with National Experts confirm that Italy has some significant areas for improvement. The factors that mostly constrain entrepreneurial activity are: first, financial support (e.g., availability of debt and equity), which was cited as a constraining factor by 64% of respondents – the highest percentage among innovation-driven economies. Second, government policies supporting entrepreneurship, which was cited as a constraining factor by 58% of respondents (only Greece had a higher percentage, with 63%). Third, government programmes supporting entrepreneurship, which was cited as a constraining factor by 50% of respondents (again, this was the highest percentage among innovation-driven economies).

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3. Sintesi del rapporto

3.1. Atteggiamenti imprenditoriali

Le indagini GEM 2008 sono state realizzate prevalentemente durante i mesi di maggio e giugno, quando si cominciava ad intravvedere l’inizio della crisi economica e finanziaria, ma prima che il suo reale impatto divenisse apparente. Nonostante ciò, nel 2008, è stato osservato un generale declino nella percezione delle opportunità per avviare una nuova attività imprenditoriale. I Paesi che mostrano le maggiori riduzioni nella percentuale di opportunità percepite (tra il 50% ed il 30%) includono Islanda, Cile, Irlanda, Lettonia ed Ungheria. Anche in Italia si è osservata una diminuzione, nella misura del 25% rispetto al 2007, comparabile alla riduzione in Spagna (-25%) e nel Regno Unito (-23%).

In generale, nei Paesi GEM, il momento economico non sembra aver avuto un impatto notevole sulla

percezione delle abilità e delle conoscenze necessarie per avviare un’iniziativa imprenditoriale. Inoltre, le intenzioni dichiarate dagli individui nei riguardi dell’avvio di un’iniziativa imprenditoriale nei prossimi tre anni si sono ridotte in misura minore rispetto alle opportunità percepite. Vi sono diverse spiegazioni al riguardo. Primo, la crisi in atto potrebbe avere l’effetto di spingere gli individui a considerare seriamente la possibilità di diventare imprenditori nel prossimo futuro, perché temono di perdere il proprio lavoro. Secondo, il gruppo di (potenziali) futuri imprenditori potrebbe essere meno pessimista rispetto al totale della popolazione adulta e, pertanto, potrebbe non percepire la crisi finanziaria come un ostacolo rilevante all’avvio di una nuova attività, ad esempio perché hanno una maggiore percezione delle proprie capacità imprenditoriali. Terzo, potrebbero aver deciso di posticipare la decisione di creare uno start-up verso la fine del triennio, in quanto si aspettano che la recessione finirà nel giro di tre anni.

Tuttavia, l’Italia è un’eccezione a questo quadro generale. Sia la percezione delle proprie abilità e della

conoscenza necessarie per avviare una nuova attività che l’intenzione di creare uno start-up nei prossimi tre anni si sono ridotte rispetto al 2007, rispettivamente del 21% e 29%. Queste riduzioni sono più elevate tra tutti i Paesi europei e possono essere lette come un’indicazione del fatto che in Italia vi è una percezione più negativa dell’attuale situazione rispetto ad altri Paesi.

3.2. Attività imprenditoriali I Paesi meno sviluppati (factor-driven nella terminologia GEM) sono caratterizzati da numerose attività

di piccole dimensioni e a scala locale e presentano un tasso di coinvolgimento nell’attività imprenditoriale nelle fasi iniziali (early-stage) ed in quella avviata piuttosto elevati.

I Paesi a sviluppo medio (efficiency-driven) presentano una netta distinzione tra i Paesi Latino-

Americani, caratterizzati da attività imprenditoriale early-stage relativamente elevata, ed i Paesi dell’Europa dell’Est, caratterizzati da attività imprenditoriale early-stage relativamente ridotta.

Tra i Paesi più sviluppati (innovation-driven), gli Stati Uniti hanno un tasso di attività imprenditoriale

early-stage più elevato rispetto ai Paesi UE e al Giappone e pari al 10,8% della popolazione adulta nel 2008. Il tasso di attività imprenditoriale early-stage in Giappone è gradatamente aumentato negli ultimi anni, fino a raggiungere un livello pari a 5,4% nel 2008, simile alla media dei Paesi UE. In alcuni Paesi europei, in particolare Belgio e Germania, si registrano i tassi imprenditoriali più ridotti, pari rispettivamente al 2,9% e 3,8% nel 2008. In Italia, nel 2008, si è osservato un tasso pari al 4,6%, più elevato di quello di Belgio e Germania, ma inferiore a quello di Spagna (7%), Regno Unito (5,9%) e Francia (5,6%). Queste differenze potrebbero riflettere differenze nell’avversione al rischio nella popolazione dei vari Paesi o la prevalenza in alcuni Paesi di individui che preferiscono il lavoro dipendente rispetto a quello autonomo. Inoltre, potrebbe essere un’indicazione del fatto che vi sono buone

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alternative di reddito disponibili, grazie alla disponibilità di alternative di lavoro o ad una rete di sussidi economici e/o sociali.

Lo sviluppo complessivo dell’attività imprenditoriale early-stage nei Paesi più sviluppati si è

mantenuto piuttosto stabile nel tempo, con un leggero e graduale incremento dal 5,7% nel 2002 al 6,4% nel 2008. I Paesi a sviluppo medio sono più sensibili al ciclo congiunturale e, tra questi, l’Argentina ha avuto una reazione significativa alla propria crisi economica nazionale, con un aumento degli imprenditori early-stage spinti dalla necessità dal 3,9% nel 2001 al 7,4% nel 2003.

3.3. Aspirazioni imprenditoriali La maggior parte degli imprenditori early-stage identificati da GEM mostra aspirazioni di crescita nulle

o limitate. L’attività imprenditoriale con elevate previsioni di crescita (high-growth entrepreneurial activity o HEA), definita come la proporzione di imprenditori early-stage che si aspetta che la propria attività avrà almeno 20 dipendenti tra cinque anni, varia da Paese a Paese. Ad esempio, Colombia, Cina, Perù e Cile hanno i tassi più elevati tra i Paesi a basso e medio sviluppo, mentre Stati Uniti, Nuova Zelanda, Islanda e Canada hanno i livelli più elevati tra i Paesi più sviluppati, con tassi HEA maggiori di 1. I livelli più contenuti, sotto lo 0,5%, si osservano in Belgio (0,3%), Francia (0,3%), Germania (0,3%), Spagna (0,4%), Finlandia (0,4%) ed Italia (0,4%).

3.4. Principali risultati per l’Italia Nel 2008, il 4,6% della popolazione adulta, ossia un adulto su 22, in Italia era coinvolto in un’attività

imprenditoriale early-stage (definita da GEM come un’attività con meno di tre anni e mezzo di vita). L’attività imprenditoriale in Italia non è significativamente diversa da quella rilevata in diversi altri Paesi europei, sebbene non sia aumentata negli ultimi anni. Secondo gli Esperti Nazionali intervistati da GEM, i maggiori ostacoli alle attività early-stage sono la mancanza di sufficienti risorse finanziarie, l’inadeguatezza delle infrastrutture fisiche e la scarsa attenzione da parte della politica e dei programmi governativi. Vi sono, inoltre, altri problemi strutturali, così come sottolineato dal World Economic Forum, e tra questi emergono la rigidità del mercato del lavoro che ostacola la creazione di nuovi posti di lavoro, l’inefficienza nell’uso delle risorse pubbliche e gli elevati costi legati alla gestione di un’attività economica. Giudizi più positivi sono stati espressi riguardo al fatto che diventare imprenditore in Italia è una scelta di carriera desiderabile. Inoltre, gli Esperti nazionali hanno osservato il fatto che nella popolazione vi sono capacità e conoscenze che consentono agli individui di diventare imprenditori, oltre che un atteggiamento positivo nei confronti dell’innovazione, da parte sia delle imprese che dei consumatori. Quest’ultimo fatto è confermato dal World Economic Forum, secondo il quale in Italia vi è un’elevata sofisticazione delle attività economiche, in quanto producono beni che sono posizionati in alto nella catena di valore ed utilizzano i più recenti processi di produzione.

Così come in altri Paesi sviluppati, il tipico imprenditore early-stage in Italia è maschio (la percentuale

è più che doppia rispetto alle donne), ha un’età compresa tra 24 e 35 anni (il 43% di tutti gli imprenditori early-stage) ed è ben istruito (laureato). La distribuzione regionale vede il 48,2% degli imprenditori early-stage nelle regioni settentrionali, il 17,5% al Centro ed il 34,2% nel Sud e nelle Isole. Le regioni settentrionali mostrano la maggiore vitalità imprenditoriale early-stage, con un rapporto tra imprenditorialità early-stage e la popolazione pari a 1,06 (il rapporto nelle regioni centrali è pari a 0,91 e nelle regioni meridionali e Isole è pari a 0,96).

Anche gli imprenditori avviati in Italia sono tipicamente uomini (la percentuale di uomini è pari a due

volte e mezza rispetto a quella delle donne), ma hanno un’età maggiore rispetto agli imprenditori early-stage (il 42% ha un’età compresa tra i 35 ed i 44 anni). Il dato relativo all’età è simile a quanto osservato in Francia e Spagna, mentre gli imprenditori avviati hanno un’età ancora maggiore in altri paesi, ad esempio Stati Uniti, Regno Unito e Germania (età compresa tra 45 e 54 anni) e Giappone, Danimarca e Finlandia (età compresa tra 55 e 64 anni). Anche gli imprenditori avviati in genere hanno un grado di istruzione elevato. La distribuzione regionale vede il 52,8% degli imprenditori early-stage nelle regioni

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settentrionali, il 17,6% al Centro ed il 29,6% nel Sud e nelle Isole. Anche qui, le regioni settentrionali mostrano la maggiore vitalità imprenditoriale early-stage, con un rapporto tra imprenditorialità early-stage e la popolazione pari a 1,16 (il rapporto nelle regioni centrali è pari a 0,91 e nelle regioni meridionali e Isole è pari a 0,83).

Come già osservato sopra, l’Italia ha uno tra i livelli più bassi di attività imprenditoriali ad elevata

previsione di crescita (HEA) e soltanto lo 0,4% degli imprenditori early-stage si aspetta che la propria attività avrà almeno 20 dipendenti nel giro di cinque anni. Tuttavia, sia le attività early-stage che quelle avviate hanno un buon contenuto tecnologico (rispettivamente il 12,5% e l’8,3% di tali attività sono attive in settori a media o a elevata tecnologia), collocando l’Italia tra le prime posizioni tra i Paesi GEM. E’ superata soltanto da Danimarca e Irlanda, con riferimento alle attività early-stage, e da Norvegia, Danimarca ed Ungheria, con riferimento alle attività avviate. L’internazionalizzazione delle attività è comparabile al resto dell’Europa. Circa il 55% delle attività (sia early-stage che avviate) non prevede esportazioni, mentre il 35% delle attività early-stage e il 33% delle attività avviate prevede di avere un quarto dei propri clienti all’estero.

Gli approfondimenti ottenuti grazie all’indagine svolta presso gli Esperti Nazionali confermano che

l’Italia ha diverse aree che richiedono attenzione. I fattori maggiormente citati, tra quelli che ostacolano l’attività imprenditoriale, sono il supporto finanziario (ad esempio la disponibilità di prestiti), citato dal 64% dei partecipanti (la percentuale più alta tra i Paesi maggiormente sviluppati), le politiche statali a sostegno dell’imprenditorialità, citate dal 58% dei partecipanti (solamente la Grecia ha riportato una percentuale più elevata, con il 63%) ed i programmi statali a sostegno dell’imprenditorialità, citati dal 50% dei partecipanti (anche questa la percentuale più alta tra i Paesi maggiormente sviluppati).

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4. Entrepreneurial attitudes, activity and aspirations in Italy and other GEM countries

We now present the results of the survey on entrepreneurial activities in Italy, and we compare them to those of other GEM countries, focusing in particular on other innovation-driven countries.

The remainder of the report is organized as follows. First, we measure entrepreneurial activities across GEM countries. Then we try to explain the variation in the level of entrepreneurial activities across countries. We then consider more in depth the situation of Italy, analyzing the socio-spatial distribution of entrepreneurial activities. We then consider the aspirations – i.e., the intended future plans – of those who started a new business and we conclude by discussing the results of additional surveys aimed at better understanding countries’ economic and social environment for entrepreneurship.

4.1. Measuring entrepreneurial activity

Exhibit 2 summarises the involvement in entrepreneurial activities over several phases of the entrepreneurial process for each of the 43 GEM 2008 countries. Countries are grouped according to the major phases of economic development, consistent with the classification of Porter & Schwab’s Global Competitiveness Report 2008-2009.

We consider several measures of entrepreneurial activities: the percentage of adult population involved in a nascent entrepreneurial activity (i.e., active for less than three months), a new business (an activity with more than three months, but less than 42 months), or is an established business owner manager. TEA, a key index of GEM, assesses the percentage of active people involved in early stage entrepreneurial activity, i.e. either in a nascent or in a new business (or both). Finally, the overall entrepreneurial activity measure assesses the percentage of active population that is either involved in early-stage entrepreneurial activity or owner-manager of an established business.1

Italy displays levels of established entrepreneurs (6.5% of the adult population) higher than early-stage ones (4.6%) and this is similar to many other innovation-driven countries. The US is a notable exception, where both early-stage and established entrepreneurial activity is higher than in EU-countries and Japan. In Italy, the rate of nascent entrepreneurs is among the lowest at 2.0% (against an average of innovation-driven economies of 3.6%), indicating that in 2008 few individuals started setting up a new entrepreneurial activity compared to other countries.

Taken together, the numbers in the table thus provide a picture of the characteristics of overall entrepreneurial activity for each country, covering the entire economic spectrum.

To further explore significant differences in the entrepreneurial activity across countries, exhibit 3 presents the 95% percent confidence interval of early-stage entrepreneurial activity (TEA) rates for GEM countries. The countries are grouped by phase of economic development and ranked within groups in ascending order of the national point estimate for TEA. If the vertical bars on either side of the point estimates for TEA of any two countries do not overlap, this means that they have statistically different TEA rates.

Clearly, factor-driven and efficiency-driven economies display a much higher variance in the level of entrepreneurial activity as compared to innovation driven economies. And among these last countries, Italy’s TEA is not statistically different from that of Belgium, Germany, Denmark, Netherlands, Japan, France and the United Kingdom.

To analyze whether this is an indication of a broader trend or an occasional result, exhibit 4 reports the temporal variation of TEA in a number of countries. Though the average level of TEA has displayed little variance over time, most countries have observed less stable TEA rates as compared to the average, indicating that the level of entrepreneurship might fluctuate in non perfectly correlated ways across 1 See Appendix 2 for a glossary of terminology used in this report.

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countries. Italy saw its TEA declining in 2008, and in any case showed values consistently below the average since 2003. Exhibit 2: Prevalence rates (expressed in %) of entrepreneurial activity and business owner-managers, for those aged 18-64, by phase of economic development, 2008

Nascent Entrepre-

neurial Activity

New Business Owner-

managers

Early-Stage Entrepre-

neurial Activity (TEA)

Established Business Owner-

managers

Overall Entrepre-

neurial Activity

Business disconti-nuations

rate

Sample size

Factor-driven economies

Iran 5.9 3.4 9.2 6.8 15.7 5.2 3,119 Bosnia and Herzegovina 6.4 2.7 9.0 8.7 17.1 5.0 1,586 Egypt 7.9 5.5 13.1 8.0 20.2 6.3 2,603 Angola 19.3 4.1 22.7 4.1 26.0 23.4 1,490 India 6.9 4.9 11.5 16.5 27.6 10.1 1,919 Ecuador 8.7 9.1 17.2 11.9 28.1 5.9 2,142 Colombia 13.8 11.7 24.5 14.1 36.7 7.1 2,000 Bolivia 17.4 14.3 29.8 19.1 45.6 10.5 1,879 Efficiency-driven economies

Russia 1.7 2.0 3.5 1.1 4.4 1.1 1,660 Romania 2.5 1.6 4.0 2.1 5.9 2.2 1,667 Latvia 3.9 2.8 6.5 3.0 9.4 1.7 2,011 South Africa 5.7 2.1 7.8 2.3 9.9 5.8 2,719 Turkey 3.2 3.0 6.0 4.8 10.7 3.9 2,400 Hungary 3.8 2.8 6.6 5.3 11.8 1.1 1,994 Croatia 4.9 2.8 7.6 4.8 12.3 2.9 1,696 Serbia 4.0 3.6 7.6 9.3 16.5 3.7 1,813 Mexico 9.3 4.0 13.1 4.9 17.8 13.6 2,433 Uruguay 7.7 4.4 11.9 7.9 19.3 9.1 1,645 Chile 8.6 5.8 14.1 6.8 20.2 5.8 4,068 Jamaica 9.0 7.1 15.6 9.1 24.3 8.9 2,399 Macedonia 7.2 7.7 14.5 11.0 24.8 5.3 1,746 Brazil 2.9 9.3 12.0 14.6 26.4 3.5 2,000 Dominican Republic 11.7 9.8 20.4 8.2 27.9 11.3 2,013 Argentina 8.5 8.5 16.5 13.5 29.6 10.2 1,731 Peru 19.7 6.8 25.6 8.3 32.7 10.4 1,990 Innovation-driven economies

Belgium 2.0 0.9 2.9 2.6 5.3 1.5 1,997 Germany 2.4 1.5 3.8 4.0 7.7 1.8 4,751 France 3.8 1.9 5.6 2.8 8.2 2.2 1,573 Denmark 2.3 2.3 4.4 4.4 8.4 1.9 2,012 Israel 3.5 3.1 6.4 4.5 10.6 3.2 1,778 Italy 2.0 2.7 4.6 6.5 11.0 1.8 2,970 United Kingdom 3.1 2.9 5.9 6.0 11.7 2.1 5,892 Slovenia 4.1 2.4 6.4 5.6 11.8 1.3 3,019 Netherlands 2.1 3.2 5.2 7.2 12.3 1.6 2,534 Japan 3.2 2.3 5.4 7.9 12.7 1.0 1,879 Spain 3.3 3.9 7.0 9.1 14.8 1.3 30,879 Norway 5.0 4.0 8.7 7.7 15.8 3.4 1,614 Finland 4.1 3.3 7.3 9.2 16.0 2.1 2,011 Ireland 3.3 4.3 7.6 9.0 16.3 3.6 1,924 Iceland 6.5 3.6 10.1 7.1 16.7 3.4 2,002 United States 5.9 5.0 10.8 8.3 18.7 4.4 3,441 Greece 5.3 4.6 9.9 12.6 22.0 2.9 1,962 Korea Republic 3.5 6.5 10.0 12.8 22.6 4.7 2,000

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Exhibit 3: Early-stage entrepreneurial activity (TEA), by phase of economic development, showing 95% confidence intervals, 2008

0%

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Factor-driven economies Efficiency-driven economies Innovation-driven economies

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Exhibit 4: Evolution of the TEA index in 2002-2008, for selected innovation-driven GEM countries

Country 2002 2003 2004 2005 2006 2007 2008 Average 2002-2008

Ireland 9.1% 8.1% 7.7% 9.8% 7.4% 8.2% 7.6% 8.3% Spain 4.6% 6.8% 5.2% 5.7% 7.3% 7.6% 7.0% 6.3% UK 5.4% 6.4% 6.3% 6.2% 5.8% 5.5% 5.9% 5.9%

Finland 4.6% 6.9% 4.4% 5.0% 5.0% 6.9% 7.3% 5.7% Hungary 6.6% n.a. 4.3% 1.9% 6.0% 6.9% 6.6% 5.4% Denmark 6.5% 5.9% 5.3% 4.8% 5.3% 5.4% 4.4% 5.4% Germany 5.2% 5.2% 4.5% 5.4% 4.2% n.a. 3.8% 4.7% Slovenia 4.6% 4.1% 2.6% 4.4% 4.6% 4.8% 6.4% 4.5%

Italy 5.9% 3.2% 4.3% 4.9% 3.5% 5.0% 4.6% 4.5% Netherlands 4.6% 3.6% 5.1% 4.4% 5.4% 2.1% 5.2% 4.3%

France 3.2% 1.6% 6.0% 5.4% 4.4% 3.2% 5.6% 4.2% Sweden 4.0% 4.1% 3.7% 4.0% 3.5% 4.2% n.a. 3.9% Belgium 3.0% 3.9% 3.5% 3.9% 2.7% 3.2% 2.9% 3.3%

Average all countries 5.2% 5.0% 4.8% 5.1% 5.0% 5.3% 5.6% 5.1%

4.2. Explaining the variance in the level of entrepreneurial activity

Economic development The level of economic development is a first relevant factor that might explain the variance in the level

of entrepreneurial activity across countries. In particular, GEM reports have demonstrated a consistent U-shaped association between a country’s level of economic development and its level and type of entrepreneurial activity. Exhibit 5 illustrates this U-shaped relationship between per capita GDP levels and TEA rates for 2008. The U-shape pattern can be explained as follows: in countries with low levels of per

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capita income the national economy is characterized by the prevalence of many, very small businesses. As per capita income increases, industrialization and economies of scale allow larger and established firms to satisfy the increasing demand of growing markets and to increase their relative role in the economy. An important factor for achieving growth is the presence of macroeconomic and political stability, which is reflected by the development of strong institutions. The increase in the role of large firms may be accompanied by a reduction in the number of new businesses, since a growing number of people find stable employment in large industrial plants. Thus, for countries with low levels of per capita income, a decrease in prevalence rates of entrepreneurial activity may be a good sign, especially if this is accompanied by economic growth and political stability. As further increases in income are experienced, the role played by the entrepreneurial sector may increase, as more individuals can access the resources to go into business for themselves in an economic environment that allows the exploitation of opportunities.

However, the dispersion of TEA country estimates around the line of best fit in Exhibit 5 suggests that entrepreneurship rates are not just a function of differences in economic development (or welfare), but also of other factors. Entrepreneurship is not only an economic event: it is a socioeconomic phenomenon. National societies and their economies are to a large extent shaped by historical developments. The rapidly expanding body of entrepreneurship studies as well as ten years of GEM research indicates that entrepreneurial activity rates may differ across countries for cultural, institutional, economic, and demographic reasons. The next sections will explore in more details some of these reasons.

Exhibit 5: Early-stage entrepreneurial activity rates and per-capita GDP, 2008

0%

5%

10%

15%

20%

25%

30%

0 10.000 20.000 30.000 40.000 50.000 60.000GDP per Capita, in Purchasing Power Parities (PPP)

Prev

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AO: Angola AR: ArgentinaBA: Bosnia & Herz. BE: BelgiumBO: Bolivia BR: Brazil CL: Chile CO: ColombiaDE: Germany DK: Denmark DO: Dominican Rep.EC: EcuadorEG: Egypt ES: Spain FI: Finland

FR: France GR: Greece HR: Croatia HU: Hungary IE: Ireland IL: Israel IN: India IR: Iran IS: Iceland IT: Italy JM: Jamaica JP: JapanKR: Korea Rep. LV: Latvia

MK: MacedoniaMX: MexicoNL: NetherlandsNO: NorwayPE: Peru RO: Romania RU Russia SI: Slovenia TR: Turkey UK: United Kingdom US: United States UY: Uruguay YU: Serbia ZA: South Africa

IN

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UK

IS

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NO

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Entrepreneurial attitudes and perceptions The level of entrepreneurial activity in a country may depend both on ‘supply’ factors as well as on

‘demand’ factors. In turn, these factors are affected by a number of individual perceptions. More specifically, on the supply side – i.e., the “pool” of potential entrepreneurs – important perceptions include individual willingness and ability to actually become an entrepreneur. Education levels and the availability of entrepreneurship training programmes are possible determinants of perceived skills. On the demand side – the “space for” entrepreneurship – there need to be opportunities for entrepreneurship, but equally important is that entrepreneurs perceive that there are opportunities for starting a business.

Though there are more factors than these at play. As people see more and more successful entrepreneurs in their direct environment, this may enhance their perception of their own ability to succeed in an entrepreneurial venture without enhancing actual capabilities. This effect may be stronger when the economic climate is favourable. Furthermore, there may be demographic differences in (perceived) entrepreneurial capabilities for historical socio-economic or cultural reasons. Policy programmes may explicitly target groups exhibiting low shares of perceived capabilities as well as low shares of actual capabilities. Thus, several distinct national conditions may affect perceived capabilities directly and indirectly.

Exhibit 6 lists several GEM indicators concerning individuals’ perceptions toward entrepreneurship for each of the 43 GEM 2008 nations. Italy displays an average perception of entrepreneurial skills among the population: 35% of the adult population believes they have the required knowledge and skills to become an entrepreneur against an average of innovation-drive economies of 39% (notice that individuals’ average perceived skills are highly correlated with the TEA index, r = 0.67, indicating that self consciousness is a key driver of entrepreneurship). Yet, only 7% of the population is expecting to start a new business in the next three years. This is similar to other innovation-driven economies in Europe. It can be explained by administrative burdens attached to starting a business, reducing the attractiveness of entrepreneurship, or by high employment protection. It may also be explained by the “fear of failure”, which is often considered as an important cultural component that is detrimental to new firm activity and is relatively high in Italy (48% of those who see good opportunities to start a business in the future say that the fear of failure prevents them to actually start a business, against an average of 39.7% of similar countries).

As expected, there is a very high correlation (r = 0.62) between the share of people that personally know somebody who started a business in the past and their optimism in foreseeing opportunities for starting a business in the future.

With regard to national attitudes to entrepreneurship – assessed by the percentage of individuals who feel that in their country entrepreneurship is considered a desirable career choice and by the popularity of entrepreneurship measured by media coverage for new businesses – some anomalies are apparent in innovation-driven countries. For example, whilst in Italy entrepreneurship does not receive a lot of media attention and scores significantly below the average, starting a business is still regarded as a good career choice, well above the average. A similar pattern is observed in Denmark, and exactly the opposite in Japan.

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Exhibit 6: Entrepreneurial attitudes and perceptions, by phase of economic development, 2008. Figures are expressed in %

Sees good opportunities for starting a business in the next 6 months a)

Fear of failure would prevent to start a business b)

Personally knows someone who started a business in the past 2 years a)

Has the required knowledge and skills to start a business a)

Expects to start a business in the next 3 years a)

Country attitudes perceived by individuals

Entrepreneur-ship considered as desirable career choice c)

Media attention for entrepre-neurship c)

Factor-driven economies Angola 74 45 71 44 27 49 46 Bolivia 52 49 38 67 38 81 60 Bosnia and Herzegovina 50 26 39 62 25 82 60 Colombia 65 41 34 54 60 92 78 Ecuador 50 35 33 66 37 79 57 Egypt 40 25 40 53 35 73 57 India 58 46 56 45 33 67 81 Iran 35 22 45 58 36 57 53

Efficiency-driven economies Argentina 48 40 30 53 15 69 80 Brazil 44 43 44 49 26 68 78 Chile 30 34 41 54 29 80 44 Croatia 53 36 51 56 10 70 61 Dominican Republic 58 31 54 70 30 92 64 Hungary 26 47 26 43 6 48 19 Jamaica 52 26 46 65 17 81 71 Latvia 37 37 33 23 7 75 71 Macedonia 47 35 46 52 39 80 66 Mexico 59 31 50 55 26 66 52 Peru 60 38 50 66 34 82 71 Romania 45 52 36 21 9 . 56 Russia 39 66 33 14 3 60 50 Serbia 56 28 52 60 31 72 67 South Africa 60 38 41 31 13 65 69 Turkey 47 39 27 44 21 72 63 Uruguay 57 33 40 58 17 71 67

Innovation-driven economies Belgium 23 30 28 34 6 47 38 Denmark 69 43 43 30 5 57 32 Finland 54 32 46 30 5 46 71 France 34 53 33 25 13 63 48 Germany 35 49 29 30 4 56 50 Greece 35 55 35 46 13 76 55 Iceland 38 36 60 45 12 61 81 Ireland 35 37 33 42 6 55 65 Israel 39 43 35 35 14 58 57 Italy 35 48 30 35 7 68 40 Japan 13 44 21 9 4 26 59 Korea Republic 20 32 32 23 17 69 67 Netherlands 54 33 32 30 4 85 61 Norway 46 28 34 33 7 61 71 Slovenia 55 33 50 44 7 58 67 Spain 32 52 36 43 5 68 43 United Kingdom 41 38 23 45 5 52 54 United States 44 28 33 48 7 63 73

a) Denominator: non-entrepreneurially active adult population 18-64 years b) Denominator: non-entrepreneurially active adult population 18-64 years that sees good opportunities to start a business c) Denominator: adult population 18-64 years

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Education As perceived skills seem to play a pivotal role in driving entrepreneurship, we should contrast these

results with data on the relationship between formal education and entrepreneurship.

In 2008, 38 GEM countries collected additional data on entrepreneurship education and training through their Adult Population Survey. Every respondent was asked if they had had training in starting a business during or after school, and whether this was voluntary or compulsory. For after-school training, the nature of the training provider was also obtained. This provided national-level estimates of the quantity of entrepreneurship education and training in each nation, and of the relative importance of different types of provider. Exhibit 7 shows the percentage of working age adults who received training in starting a business in each country, by country groups. Overall levels of trained individuals varied greatly by country within country groups. In innovation-driven countries, it varied from 48% in Finland to 13% in Israel. Italy is positioned towards the bottom, with 17% of the population receiving training in starting a business.

In addition, entrepreneurship experts in 31 countries were asked to rate the provision of entrepreneurship education and training in their country. Exhibit 8 shows average ratings on a 1 to 5 scale by entrepreneurship experts in each country on the need for, availability of, and quality of entrepreneurship education and training by country and country group. Within each country group, average scores varied little from country to country. The average scores by country type suggest that start-up entrepreneurs’ need for external help reduces slightly as countries develop economically, and the availability of that help increases. The perceived level of help is insufficient in factor-driven countries and generally sufficient in innovation-driven countries. The perceived quality of school-level entrepreneurship education and training increases with economic development, but perceived quality of post-school entrepreneurship education does not, and it is seen as inadequate in almost all innovation-driven countries. This suggests that experts in most innovation-driven countries see plenty of help available, but question its quality.

In Italy, experts feel that entrepreneurs need help with their plans before start-up (score of 3.3, equal to the innovation-driven country average of 3.3). However, Italy scores worse than other innovation-driven countries with regard to “enough help available outside education system” (Italy scores 2.8, while the innovation-driven country average is 3.3) and with regard to “quality of entrepreneurship education and training at school” (Italy scores 1.8, while the innovation-driven country average is 2.2). Quality of entrepreneurship education and training after school is perceived as being similar to other innovation-driven countries (Italy scores 2.8, which is the same as the average for other similar countries).

Exhibit 9 shows the distribution of educational attainment by entrepreneurs in Italy, distinguishing early-stage entrepreneurs and established ones. The highest prevalence rates are among individuals with higher educational attainment and this is in line with most other innovation-driven countries. Data indicate that 3.1% of the adult population that has some secondary education is involved in early-stage entrepreneurship, 3.9% of the adult population that has completed their secondary education is involved in early-stage entrepreneurship and 7.9% of the adult population that has completed their graduate studies or has post-graduate experience is involved in early-stage entrepreneurship.

Prevalence rates differ for established entrepreneurs and this is possibly a reflection of the fact that they are older than early-stage entrepreneurs: 4.7% of the adult population that has some secondary education is an established entrepreneur, 6.9% of the adult population that has completed their secondary education is an established entrepreneur and 7.4% of the adult population that has completed their graduate studies or has post-graduate experience is an established entrepreneur.

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Exhibit 7: Percentage of the population aged 18-64 that received voluntary or compulsory training in starting a business during or after school, 2008

School voluntaryi

School compulsory School any After school

voluntaryi After school compulsory

After school any Any training

Factor-driven economies Egypt 3.8 0.9 4.7 2.1 2.1 4.2 7.5

India 3.3 1.7 5 3.8 7 10.8 13.1

Bolivia 8.2 2.4 10.6 10.3 3.9 14.2 19.1

Bosnia and Herzegovina 12.7 0.8 13.5 8.1 2.5 10.6 19.9

Ecuador 16.1 4.3 20.4 8.3 7.3 15.6 27.2

Iran 8.9 6.6 15.4 9.2 10.3 19.5 28.9

Colombia 19.2 4 23.2 20.7 8.7 29.4 40

Country average 10.3 3 13.3 8.8 6.2 14.9 22.2 Efficiency-driven economies

Turkey 1.9 0.6 2.5 1.9 2.3 4.2 6.3

Dominican Republic 4.7 0.6 5.3 1.9 2.1 4 7.7

Romania 3.3 2.2 5.5 2.8 1.8 4.6 8

Brazil 4.5 0.8 5.3 1.6 5 6.6 9.4

Serbia 1.5 1.5 3 2.6 4.9 7.6 10.2

South Africa 6.6 2.7 9.3 3.8 5.2 9 13.8

Mexico 5.8 3.6 9.5 3.6 5.9 9.5 15.5

Argentina 6.4 3.2 9.6 7.3 3.6 10.9 17.4

Macedonia 10.3 2.3 12.6 7.2 3.7 10.9 19.1

Jamaica 6.8 9.2 16 2.9 6.4 9.3 21

Uruguay 9.7 1 10.7 9.5 8.9 18.4 24.1

Hungary 2.8 14.2 17.1 1.4 8.6 10 24.4

Croatia 8.6 11.1 19.7 8 7.6 15.6 27.6

Latvia 6.1 8.4 14.5 9 10.1 19.1 28

Peru 11.5 2.9 14.4 12.2 12.5 24.7 29.6

Chile 16.8 8.5 25.3 18.9 13.8 32.7 42.5

Country average 6.7 4.6 11.3 5.6 6.3 12.3 19 Innovation-driven economies

Israel 4.1 1.7 5.8 4.5 4.1 8.6 12.8

Korea Republic 2.7 3.2 5.9 3.8 5.4 9.2 13.6

Italy 6 4.2 10.2 5.3 3.7 9.1 16.5 Greece 5 1.2 6.1 6.4 6.5 12.9 17

Japan 2.8 2.1 4.9 10.1 5.6 15.7 17.4

France 5.3 4.9 10.2 5.9 6.6 12.5 18.1

United Kingdom 5.8 3.1 8.9 7.7 6.1 13.8 19.5

Germany 10.3 2 12.3 8.4 4.7 13.2 21

Spain 9.5 3 12.5 7.9 6.8 14.7 21.9

Denmark 2.4 7.1 9.5 2.1 11.9 14 22

Ireland 8.1 5.8 14 9.9 7.6 17.5 26.1

Iceland 6.5 5.3 11.8 11.3 6.5 17.8 26.7

Belgium 17.8 7 25 3 15.2 18.2 33.3

Slovenia 13 11.3 24.3 10.3 12.3 22.6 35.7

Finland 10.1 7.8 17.9 19.6 20.8 40.4 47.9

Country average 7.3 4.6 11.9 7.7 8.3 16 23.3 i: “Voluntary” includes those reporting voluntary training or a mix of voluntary and compulsory training.

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Exhibit 8: Perceived need for and availability and quality of entrepreneurship education and training, by country and country group (average ratings by experts from 1 to 5), 2008

Entrepreneurs in general need help with their plans before start-up

Enough help available outside education system

Quality of entrepreneurship education and training at school

Quality of entrepreneurship education and training after school

Factor-driven economies

Bolivia 3.9 2.3 1.7 2.6

Bosnia and Herzegovina 4.1 2.7 1.9 2.4

Colombia 4.3 2.6 2.0 3.2

Ecuador 3.8 2.3 1.6 2.6

Egypt 4.3 2.1 1.3 1.8

Iran 4.5 3.2 1.7 2.4

Country averages 4.2 2.5 1.7 2.5

Efficiency-driven economies

Argentina 4.2 2.8 2.1 3.4

Brazil 4.2 2.9 1.6 2.8

Chile 4.1 2.6 1.6 2.9

Croatia 4.2 3.1 2.2 2.8

Dominican Republic 4.2 2.3 1.7 3.2

Jamaica 3.8 2.7 2.0 2.8

Macedonia 4.3 3.1 2.2 2.8

Mexico 4.4 2.9 1.7 3.0

Peru 3.9 2.5 1.9 2.9

Russia n.a. n.a. 2.5 3.1

Serbia 3.9 3.1 2.0 2.9

South Africa 4.1 2.4 1.9 2.5

Turkey 4.1 2.6 1.9 2.7

Uruguay 3.9 3.2 2.1 2.9

Country average 4.2 2.8 2.1 3.4

Innovation-driven economies

Denmark 4.3 3.1 2.4 2.4

Finland 4.0 3.7 2.5 2.8

Germany 3.6 3.9 1.9 2.7

Greece 3.7 2.4 1.8 2.5

Ireland 4.1 3.6 2.5 3.0

Italy 4.0 2.8 1.8 2.8

South Korea 3.9 3.6 2.4 2.9

Norway 4.3 2.9 2.6 2.9

Slovenia 3.8 3.5 2.4 3.0

Spain 4.3 3.3 1.9 2.9

United States 3.9 3.3 2.1 2.9

Country averages 4.0 3.3 2.2 2.8

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Exhibit 9: Educational attainment by entrepreneurs in Italy (% involved in early-stage and established businesses), 2008

0

1

2

3

4

5

6

7

8

Early stage Established

Some secondary education

Secondary education

Graduate & postgraduateesperience

Entrepreneurial motivation Ultimately, to understand the variance in the level of entrepreneurial activities we should ask a simple

question: why do individuals become entrepreneurs? Although most individuals are pulled into entrepreneurial activity because of opportunity recognition, others are pushed into entrepreneurship because they have no other means of making a living, or because they fear becoming unemployed in the near future. For those who are pulled to entrepreneurship, two major drivers of opportunity entrepreneurship can be identified: those who are pulled primarily because they desire independence, and those who are primarily pulled to entrepreneurship because they want to increase their income as compared to, for instance, being an employee. The remaining share includes people who maintain that they have no other way of earning a living (necessity-motivated entrepreneurs) and people who became involved in entrepreneurial activity primarily to maintain their income.

In Italy, 3.64% of the adult population was pulled into entrepreneurial activity because of opportunity recognition, whilst only 0.66% was driven by necessity. Out of opportunity-driven entrepreneurs, 67.1% desired greater independence, 24.8% wanted to increase their income and 7.0% wanted to maintain their income (the remaining 1.1% did not respond).

The empirical evidence shows that the countries with high relative prevalence of improvement-driven opportunity entrepreneurship are primarily innovation-driven countries. In these countries, opportunities may be expected to be more abundant, and individuals may have more alternatives to make a living. Therefore the trend of the degree of opportunity TEA in terms of GDP per capita gradually slopes upward in Exhibit 10. The downward sloping line describes the pattern of the degree of necessity entrepreneurship. Thus, when countries progress in economic development, their rate of necessity entrepreneurship decreases. This is a clear example of economic development impacting the TEA rate and not the other way around.

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Exhibit 10: Necessity- and improvement-driven opportunity motivations as a percentage of early-stage entrepreneurial activity, 2008

R2 = 0.41

R2 = 0.55

0%

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4.3. The distribution of entrepreneurial activity: a focus on Italy

In this section we will explore in some more depth how entrepreneurial activities are distributed in Italy, in terms of the economic and geographic environment as well as of individual demographic characteristics.

Sector distribution

Exhibit 11 shows the distribution of early-stage entrepreneurial activity and established business owner/managers by industry sector. In Italy, this distribution is similar to that in other innovation-driven countries, where business services (i.e., tertiary activities that target other firms as main customers, such as finance, data analysis, insurance, etc.) prevail. In Italy, they accounted for 37.6% of early-stage activities and 27.9% of established businesses. Consumer services (e.g., retail, restaurants, tourism) were the second largest sector (32.0% and 28.7%, respectively). Transforming businesses (manufacturing and construction), which are typical of efficiency-driven countries, accounted for 24.5% and 34.8% respectively in Italy. Extraction businesses (farming, forestry, fishing, mining), which are typical of factor-driven economies, accounted for 6.0% and 8.6%, respectively.

Regional distribution

Exhibit 12 shows the distribution of entrepreneurs among Italian regions, which are divided into three areas: North, Centre and South/Islands. The columns include demographic data (column b), early-stage entrepreneurship rate (column c) and established business rate (column e). The ratio of early-stage entrepreneurship rate to population (column d) and of established business rate to population (column f) indicates entrepreneurial vitality by regional area. As can be seen, in northern regions, ratios are greater than 1, indicating there are more entrepreneurs (especially with regard to established businesses) relative to the population, compared to other areas of Italy.

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Age and gender structure

Exhibit 13 shows how rates of early-stage entrepreneurial activity differ across age groups. The shapes of the age distributions are very similar across country groups. The 25-34 years age group has the highest prevalence rate in Italy for early-stage activity (42.5%) and this is similar for GEM countries in every phase of economic development. Thereafter the rates decrease as age increases (the 35-44 year old group accounts for 30.7%, 45-54 for 15.6% and 55-64 for 4.4%). This inverted U-shape pattern reflects the interaction between desire to start a business, which tends to reduce with age, and perceived skills, which on the contrary tends to increase with age.

Established entrepreneurs tend to be slightly older and the prevalent age group in Italy is 35-44, accounting for 41.4% of established entrepreneurs. The second largest age group is 45-54 (30.1%), while 55-64 accounts for 13.3% and the youngest (18-24 years old) for only 1.9%.

Exhibit 14 displays the differences in female and male participation for each GEM country in 2008, ordered by major phase of economic development and female participation rate. The ratio of female to male participation varies considerably in each phase, reflecting different culture and customs regarding female participation in economic activity. In some factor-driven economies, for example Ecuador and Bolivia, female TEA rates are just below male TEA rates. In Angola, women are actually more likely to be involved in early-stage activity as compared to men. For efficiency-driven economies, the gender gap in TEA rates is also quite low in many Latin American countries and Jamaica. In many, but not all, eastern European countries male TEA rates are substantially higher than female TEA rates.

In innovation-driven countries, the general rule of thumb is that men are twice as likely to be involved in early-stage entrepreneurial activity than women. However, this gap is lower in Germany (1.2 men for each woman), Spain (1.4) and the United States (1.4). In Italy the ratio is equal to 2.3 men for each woman among early-stage entrepreneurs. Lower female participation rates can be found in Belgium (with a ratio of 2.4), France (2.5), Japan (2.6) and Ireland (2.8).

There are even fewer women among established entrepreneurs. Here, the ratio is equal to 2.5 men for each woman in Italy, one of the worst among GEM countries. There is a better ratio in Spain (1.4), the US (1.6), Ireland (2.4), Germany (2.2), Ireland (2.4). The UK is at the same level (2.5), whilst there are lower female participation rates, relative to men, in Belgium (2.9), France (3.0) and Japan (3.0).

Exhibit 11: Sector distribution by age of business in Italy, 2008

0102030405060708090

100

Early stage Established

ExctractiveTransformingConsumer orientedBusiness oriented

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Exhibit 12: Regional distribution of entrepreneurial initiatives by age of business in Italy, 2008

a. Area2 b. Population (% of total)

c. TEA d. Early-stage entrepreneurial

vitality (c/b)

e. Established businesses

f. Established entrepreneurial

vitality (e/b)

North 45.5 48.2 1.06 52.8 1.16

Centre 19.3 17.5 0.91 17.6 0.91

South & Islands 35.8 34.2 0.96 29.6 0.83

Exhibit 13: Early-stage entrepreneurial activity for separate age groups by age of business in Italy, 2008

0102030405060708090

100

Early stage Established

55-6445-5435-4424-3418-24

2 North includes the following regions: Emilia Romagna, Friuli Venezia Giulia, Liguria, Lombardy, Piedmont, Trentino Alto Adige, Valle d’Aosta, Veneto; Centre includes: Lazio, Marche, Toscana, Umbria; South and Islands includes: Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia, Sicily.

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Exhibit 14: Early-stage entrepreneurial activity rates by gender, 2008

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4.4. Entrepreneurial aspirations

Having analyzed the level of entrepreneurial activity and its key determinants, we now turn to its expected consequences.

In particular, several studies show that relatively few early-stage entrepreneurial firms contribute a disproportionate share of all new jobs created by new firms. In the following analysis, seven years of GEM data (years 2002-2008) are combined to take a closer look at how growth ambitions differ among early-stage entrepreneurs. GEM asks all identified early-stage entrepreneurs how many employees they expect to have within five years’ time. Expectations of high-growth are rare among nascent and new entrepreneurs. Only 70% of all start-up attempts expected any job creation at all. Only 8% of all start-up attempts expected to create 20 or more jobs. In the remainder of this section, we focus on the prevalence of new and nascent entrepreneurs who expect their business will employ at least 20 people in five years’ time. This is known as high-growth expectation early-stage entrepreneurial activity, or HEA.

Exhibit 15 presents the HEA rate in the adult population of GEM countries for which a sufficient sample size was available, grouped on the basis of GDP per capita. The vertical bars indicate the 95% confidence interval. If vertical bars overlap between two countries, the difference between those countries is not considered statistically significant. Data are broadly consistent with the notion that national HEA rates vary with economic context. The United States, New Zealand, Iceland, and Canada have higher levels of HEA than other innovation-driven economies. In Italy, as well as the United Kingdom, Switzerland, Germany, Slovenia, Norway, and Denmark, the HEA rate is between 0.5% and 0.8%. The lowest levels of HEA, at under 0.5%, occur in Belgium, France, Spain, Japan, Finland, and Greece.

We have further analysed high growth expectations by considering the relative prevalence of HEA entrepreneurs among all TEA entrepreneurs. This shows a slightly different pattern, which is shown in Exhibit 16. The countries with arguably the “healthiest” entrepreneurial anatomies, in this sample of nations, are Singapore, Hong Kong, China, and Turkey. For example, in Singapore and Hong Kong, over 20% of nascent and new entrepreneurs aspire for rapid growth, the highest relative prevalence of HEA of all innovation-driven countries in the sample. Thus, in spite of its low overall rate of entrepreneurial

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activity, the contribution of entrepreneurs to these two densely populated economies may be quite significant.

Greece and Spain stand out as countries where very few nascent and new entrepreneurs (around 5%) anticipate creating a business of significant size. Also France, Finland, Belgium, Australia, and Norway exhibit low levels of entrepreneurial growth ambition, with less than 10% of all start-up attempts expecting high-growth. Instead, in Italy, there is a relatively high proportion of HEA, which is statistically similar to that in Sweden, the UK, Ireland and even the US.

Innovation is an important means by which entrepreneurial firms contribute to economic growth. GEM assesses innovation in entrepreneurial businesses in a variety of ways. First, there are assessments of early-stage entrepreneurs and established business owner-managers concerning the novelty (or unfamiliarity) of their products or services relative to customers’ current experience. A second way that GEM assesses the innovativeness of entrepreneurial businesses is by measuring the degree of competition faced by the business, or whether the owner-manager perceives that many, few, or no other businesses offer similar products or services.

Exhibit 17 evaluates GEM countries on an index that combines the two measures of innovation discussed above (product novelty and degree of competition), and ranks countries in their country groups on the relative prevalence of innovative early-stage entrepreneurial activity. In essence, this index measures the percentage of early-stage entrepreneurs with novel product-market combinations. These entrepreneurs offer a product or service they believe is new to some or all customers and they also believe that there are few or no businesses offering the same product. In order to derive more precise estimates, we combined GEM data from 2002-2008.

Looking at the country groups, it is apparent that in each group there are countries with high and low relative prevalence of innovative early-stage entrepreneurial activity. Interestingly, within the innovation-driven country group, the EU-countries emerge as having – on average – the highest relative prevalence. However, there is a wide variation in relative prevalence, even within the EU. For example, Greece, Spain, and Italy have relatively few new product-market oriented entrepreneurs in early-stage entrepreneurial activity, whereas Denmark, Slovenia, France, and Ireland have high rates.

GEM collects information on the business activities of nascent entrepreneurs and owner-managers. Exhibit 18 presents the share of early-stage entrepreneurs who are active in technology sectors according to the OECD definition. This figure confirms that countries in the innovation-driven stage have higher shares of technology-related early-stage entrepreneurial activity. Also here, some European countries tend to score high, although some (including Italy) can be found at the lower end of the ranking of innovation-driven economies on this measure.

Another measure of growth potential is the percentage of export expectation, which is shown in Exhibit 19. Most entrepreneurial activities in Italy do not export (55.0% of early-stage and 55.3% of established). This is similar to other innovation-driven countries: for example, with regard to early-stage activities, 52.2% in France do not export, 56.4% in Spain, 50.7% in the UK. However, the situation is different in Germany and the US, where respectively 59.8% and 51.1% have between 1% and 25% of their customers abroad.

In Italy, 34.6% of early-stage activities and 32.7% of established activities have 1%-25% of their customers outside the country; 8.1% of early-stage activities and 10.9% of established activities have 26%-75% of their customers outside the country; and 2.3% of early-stage activities and 1.1% of established activities have 76%-100% of their customers outside the country.

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Exhibit 15: Prevalence rates of high-growth expectation early-stage entrepreneurship (HEA) in the adult population in GEM countries, 2002-2008

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Exhibit 16: Prevalence rates of high-growth expectation early-stage entrepreneurship (HEA) as a percentage of TEA in GEM countries, 2002-2008

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Exhibit 17: Percentage of early-stage entrepreneurial activity with new product-market combination in GEM countries, 2002-2008

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Exhibit 18: Percentage of early-stage entrepreneurial activity in technology sectors in GEM countries, 2002-2008

0%

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Exhibit 19: Percentage of entrepreneurial activities in Italy exporting, 2008

0102030405060708090

100

Early stage Established

76-100% customers outsidecountry26-75% customers outsidecountry1-25% customers outsidecountryNo customers outside country

4.5. Business discontinuation

Business discontinuation is an important feature of dynamic economies, and entries and exits of businesses are closely correlated. Exhibit 3, above, displayed prevalence rates of people who discontinued, sold, or quit a business in the twelve months preceding the GEM survey. It can be seen that business discontinuance rates are relatively high in factor-driven economies and relatively low in innovation-driven economies (in Italy, it was 1.8%). Among high-income countries, Norway, the United States, Iceland, and Ireland have the highest rates of business discontinuation, suggesting that is these countries there is a rapid turnover of business experiments.

Respondents who discontinued a business in the last 12 months were also asked to state the most important reason for doing so. Exhibit 20 shows that the reason that was cited most often for quitting in Italy was the business not being profitable (41% of respondents). This was the prevalent reason in all innovation-driven countries, where, on average, it was cited in less than 35% of cases. However, the discontinuation of a business does not necessarily mean the business failed. Personal reasons caused around 20-25% of all discontinuations in GEM countries (27.5% in Italy). Such reasons could include sickness, family, or business partner bereavement, divorce, the need to finance an event such as a wedding through sale of business assets rather than the business itself, or simply boredom. Other reasons, in Italy, were: problems getting finance (10.5%), retirement (8.1%), another job or business opportunity (5.8%), opportunity to sell (4.7%) and exit planned in advance (2.5%).

Exhibit 20: Expressed reasons behind discontinuing businesses in Italy, 2008

0

10

20

30

40

50

60

70

80

90

100 Exit planned in advance

Opportunity to sell

Another job or businessopportunityRetirement

Problems getting finance

Personal reasons

Business not profitable

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4.6. Innovation confidence index

In 2007, the IIIP Innovation Confidence Index was developed by the Institute for Innovation & Information Productivity (IIIP) in association with GEM. This year, 26 GEM countries collected data on personal innovation confidence through the Adult Population Survey (APS), more than doubling the number of participating countries. The premise behind the Index is that innovative entrepreneurs need customers who are willing to buy new products and services and to try products and services that utilize new technology. Consumers who are receptive to such innovations tend to believe that they will improve their life.

The index captures these three dimensions of innovation confidence (IC): willingness to buy new products or services, willingness to try products or services that involve new technology, and the belief that new products or services will improve one’s life. Each dimension is measured using a five-point scale and then combined into an index at the country level. The final IC Index is the average percentage of the sample agreeing to each item. Exhibit 21 plots the results in rank order by country. It shows that innovation confidence varies widely, even among countries at similar stages of economic development, but tends to be lower in more developed economies. In Italy, the IC index in 2008 was higher than the UK’s and above the average for innovation-driven countries.

For more details on the IIIP Innovation Confidence Index, see www.iii-p.org

Exhibit 21: Innovation Confidence Index in GEM countries, 2007-2008

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4.7. The national experts survey

Another important source of data for the GEM project is a survey among national experts and entrepreneurs (NES). The survey is aimed at measuring the perception of people who have first hand experience of entrepreneurial activities and asks them about the efficacy and efficiency of their countries with respect to a vast a number of issues, which are grouped in 22 areas. These are multi-item indices, with a score ranging from 1 (low) to 5 (high), based on GEM data from the NES survey:

1. financial environment i.e., the availability of public and private source of funding for entrepreneurs (equity, debt, grants and subsidies);

2. government policies on entrepreneurship, specifically with regard to whether entrepreneurship and support for new and growing firms is a high priority;

3. government policies on entrepreneurship, specifically with regard to the extent to which government policies reflected in taxes or regulations or the application of either are either size-neutral or encourage new and growing firms;

4. the degree of public support for new companies through government programmes, government agencies, science parks and incubators, etc.;

5. the quality of teaching in primary and secondary education with regard to entrepreneurship (e.g., whether it encourages creativity, self-sufficiency, and personal initiative, provides adequate instruction in market economic principles, etc.);

6. the quality of education and training at university and professional level (e.g., whether universities provide good and adequate preparation for starting up and growing new firms);

7. the need for early-stage entrepreneurs to have external assistance with regard to their plans prior to start-up;

8. the presence of adequate public and/or private centres or agencies that can provide persons with adequate education and training on entrepreneurship independently of the educational formal system;

9. the level of R&D transfer (e.g., whether new technology, science, and other knowledge are efficiently transferred from universities and public research centres to new and growing firms, the availability of subsidies to acquire new technology, etc.);

10. the presence of commercial and professional services to support early-stage entrepreneurs (e.g., legal and accounting services);

11. internal market dynamics i.e., the extent to which the markets for consumer and business-to-business goods and services change dramatically from year to year;

12. internal market burdens i.e., the extent to which new and growing firms can easily enter new markets;

13. physical infrastructures and services access (including roads, utilities, communications, etc.);

14. cultural, social norms and society support (with regard to whether the national culture is highly supportive of individual success achieved through own personal efforts, emphasizes self-sufficiency, autonomy, and personal initiative, etc.);

15. perception of opportunities for start-ups (e.g., whether there are plenty of good opportunities for the creation of new firms, individuals can easily pursue entrepreneurial opportunities, etc.);

16. extent to which there are skills and abilities in the population to create and manage start-ups;

17. extent to which becoming an entrepreneur is considered a desirable career choice, carries respect and status in the population, etc.;

18. intellectual property rights (IPR) situation (the extent to which the legislation is comprehensive, efficiently enforced, etc.);

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19. support for women entrepreneurs, including the provision of social services;

20. support for high growth start-ups (including support from policy makers and government programmes);

21. support for innovation from the companies’ point of view (the extent to which companies like to experiment with new technologies and with new ways of doing things, whether innovation is highly valued by companies, etc.);

22. support for innovation from the consumers’ point of view (the extent to which innovation is highly valued by consumers, whether consumers like to try out new products and services, etc.).

Exhibits 22 and 23 show results for Italy and ten other innovation-driven countries that participated in the NES in 2008. According to National Experts interviewed by GEM, early-stage business in Italy is mostly constrained by a lack of financial resources for new entrepreneurs, inadequate physical infrastructure, as well as little attention by government policy and a lack of effective government programmes. However, there are other structural problems, as highlighted by the World Economic Forum, which have still not been dealt with. These include a rigid labour market, which hinders job creation, and the inefficient use of public resources. There are also high business costs and low investor confidence. On a more positive note, GEM experts highlight the fact that becoming an entrepreneur in Italy is a desirable career choice, that there is a capacity for entrepreneurship (in terms of skills and abilities) among the population, fostering entrepreneurship, as well as support for innovation, both among consumers and among firms.

Exhibit 22 shows how each country ranks, relative to other countries, with regard to the 22 categories. Nordic countries (Denmark, Finland and Norway), Germany, the US and Korea obtained the best scores in the categories analyzed (these are in bold in the table). Italy (shaded column) does not rank well in most areas. It is in the three lowest positions in 17 out of 22 categories. The only areas in which Italy scores relatively better are: desirability of career as an entrepreneur (4th), internal market dynamics (5th), need for external assistance for start-ups (6th), support for innovation by companies (7th), and support for innovation by consumers (5th).

Exhibit 23 shows the scores Experts assigned to Italy for each of the 22 categories and these are compared to the average for all innovation-driven countries. The categories are presented in decreasing order of score assigned to Italy. Italy’s score is well below the average with regard to physical infrastructure, government policies (both in connection to tax and bureaucracy and to whether entrepreneurship is a priority), IPR and support for high growth entrepreneurship. On a more positive note, the perception of opportunities for start-ups in the next six months is higher than the average.

National Experts were also asked what, in their opinion, are the factors that mostly constrain entrepreneurship in their country. In Italy, these were the financial environment (cited by 63.9% of experts), government policy (58.3%) and government programmes (50.0%). Factors that mostly support entrepreneurship in Italy, according to Experts, were skills and capacity for entrepreneurship among the population (cited by 57.6% of experts), cultural and social norms (45.5%) and the economic climate (27.3%).

Finally, Experts were asked in which area they would recommend intervention in order to foster greater entrepreneurship in their country. Government policy was cited by 52.9% of experts, the financial environment by 47.1% and government programmes by 44.1%. Results are displayed in exhibit 24 (multiple responses were possible).

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Exhibit 22: National Expert Survey in Italy and other innovation-driven countries, 2008 Country Ranking Denmark Finland Germany Greece Ireland Italy Korea Norway Slovenia Spain USA 1 Financial environment 6 2 4 7 5 11 9 1 8 10 3 2 Government policies: priorities

& support 5 2 3 8 4 11 1 10 9 6 7

3 Government policies: tax & bureaucracy 2 1 6 9 3 11 5 4 10 7 8

4 Government programmes 6 7 1 10 2 11 3 4 9 5 8 5 Education: Primary &

Secondary 4 3 9 11 2 10 6 1 5 8 7

6 Education: University & Professional 11 5 8 10 4 9 3 6 2 7 1

7 Need for external assistance 3 5 11 10 4 6 8 2 9 1 7 8 Public & private agencies 7 2 1 11 3 9 10 8 4 5 6 9 R&D transfer 7 6 3 10 2 11 1 4 9 8 5 10 Commercial & professional

services 5 2 4 7 3 11 10 1 8 9 6

11 Internal market dynamics 11 10 4 7 6 5 1 8 2 9 3 12 Internal market burdens 1 3 5 7 2 11 8 6 10 9 4 13 Physical infrastructure 2 1 5 8 10 11 4 3 6 9 7 14 Cultural & social norms 7 4 9 8 3 10 2 6 11 5 1 15 Opportunity perception 6 1 7 11 2 10 4 3 8 9 5 16 Skills & abilities 5 6 11 7 3 9 2 1 4 10 8 17 Desirability of career 5 8 11 9 2 4 3 6 10 7 1 18 IPR 2 1 4 11 6 10 3 5 8 9 7 19 Support for women 3 1 9 11 5 10 8 2 4 7 6 20 Support for high growth 2 5 3 11 1 10 6 8 9 7 4 21 Support for innovation (firms) 4 3 8 10 5 7 1 6 11 9 2 22 Support for innovation

(consumers) 3 8 10 9 4 5 2 7 11 6 1

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Exhibit 23: National Expert Survey scores in Italy vs. average of innovation-driven countries, 2008

0 1 2 3 4 5

Govt policies, tax & bureucracy

Education (Primary & Secondary)

Govt policies, priorities & support

R&D transfer

Fin. Environment

Govt programmes

Internal market burdens

Cultural & social norms

Skills & abilities

Opportunity perception

IPR

Education (University & Professional)

Support for high grow th entrepreneurship

Commercial & professional services

Public & private agencies

Physical infrastructure

Internal market dynamics

Support for w omen entrepreneurs

Support for innovation (companies)

Desirability of career

Support for innovation (consumers)

Need for external assistance

Average score

Italy score

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Exhibit 24: Factors constraining and supporting entrepreneurship & recommendations by National Experts in Italy, 2008

Factors constraining entrepreneurship % of Experts citing the factor

Financial environment 63.9% Government policy 58.3% Government programmes 50.0% Factors supporting entrepreneurship

Skills and capacity for entrepreneurship 57.6%

Cultural & social norms 45.5% Economic climate 27.3% Key recommendations to foster entrepreneurship

Government policy 52.9% Financial environment 47.1% Government programmes 44.1%

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5. Implications for public policy

Since 2003, the Italian level of early-stage entrepreneurial activity has been constantly below the average of the most representative innovation-driven economies. And this has happened despite the fact that starting a business is widely considered a desirable career choice in Italy, and consumers are regarded to be widely open to experiment new products or services.

So, what prevents individuals from becoming entrepreneurs in such a potentially fertile environment and what can policy makers do about it?

The national level of entrepreneurial activity depends upon local opportunities, and entrepreneurial capacity and skills to pursue such opportunities. These, in turn, are influenced by a number of framework conditions that refer to the institutional environment. Suitable policies are those aimed at making this entrepreneurial process smoother. Along these lines, the 2008 GEM results highlight the following guidelines:

• Resources and skills. Italy’s share of the population that has received voluntary or compulsory training to start a new business is significantly below that of other nations (see exhibit 7). For nascent ventures, the entrepreneur’s human capital, as expressed in her education, experience, and skills, arguably constitutes the most important initial resource endowment, a fundamental key to a new venture’s growth and success. Not only does superior training provide higher chances for an entrepreneur to succeed, but it also enhances the individual’s cognitive abilities that are required to identify entrepreneurial opportunities in the first place. It has been found that, in high income countries, post-secondary entrepreneurship education and training is positively associated with the level of new business activity, because it enhances the level of opportunity perception in the population at large, and is more weakly associated with the level of entrepreneurs’ skills.3

There should be a common effort aimed at designing original study programmes that are aimed at developing students’ ability to recognize valuable opportunities and at providing students with more useful knowledge targeting the abilities needed to start a new business. Although most students will not, and probably should not, start new firms immediately after graduation, entrepreneurship training may have a long-lasting effect on their entrepreneurial alertness and motivation.

Opportunities

. Among innovation-driven economies, Italy has one of the lowest percentages of early-stage entrepreneurial activities in technology sectors. Yet a number of studies have shown that industries with greater R&D intensity are more favourable to new firms than industries that have lesser R&D intensity, as they provide more sources of opportunities for new business ideas. Since the results of the GEM survey have shown that most individuals become entrepreneurs by seizing opportunities they spot in the environment, suitable policies to redirect activity towards more technology intensive sectors can, therefore, be profitably pursued. In this process, better training is important, but also the role of R&D transfer – which the Experts’ survey has highlighted to be at a critically low level in our country. Therefore, the latter also needs to be reconsidered and redirected. A key assumption of the GEM model is that countries in which transfer of knowledge generated by R&D from labs to entrepreneurs is relatively quick and cheap should generate more innovative new businesses than those in which this process is costly or slow. According to the Experts’ survey results, Italy has a lot to do in this direction.

General conditions

3 See J. Levie and E. Autio, “A theoretical grounding and test of the GEM model”, Small Business Economics, 2008.

. If we assume that there are entrepreneurial opportunities to be pursued in the environment and that these are identified and recognized by individuals who also own the abilities to pursue them, these opportunities will only turn into entrepreneurial activities if individual have the right risk / return profiles. That is, entrepreneurs must perceive it is worthwhile to start a new venture to exploit the opportunity. The results of the GEM analysis indicate four major areas of intervention to improve Italy’s TEA along these lines:

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o The National Experts’ survey has clearly highlighted that Italy is at the low end of the spectrum with regard to the financial environment and government policies in terms of tax and bureaucracy. While starting a new business may have become simpler over the years, the high taxation rate still diminishes the expected return, and hence the propensity to start a new venture. If needed, this study provides additional empirical evidence about the need to modernize our bureaucratic apparatus.

o The already high barriers to pursue a new venture are even higher for women. Italy shows one of the lowest rates of females involved in starting new businesses. Suitable policies should be therefore devised to unleash women’s potential to pursue entrepreneurial careers. Achieving a higher female participation – in line with that of other innovation-driven economies – would significantly increase the general level of the Italian early-stage entrepreneurial activity. In order to do so, we first have to understand which factors currently prevent women from launching a new venture. A recent study based on GEM data4

o Fear of failure is a major barrier to embark in a new business. Our cultural and social norms still overly punish the unsuccessful entrepreneur. We know that the opposite is true in highly entrepreneurial environments, where failure is tolerated and accepted. Our cultural environment should therefore be changed accordingly, in order to avoid excessively penalizing (in terms of reputation and access to financial resources) those entrepreneurs who have failed simply because of exogenous causes.

has shown that there may be an inherent difference in the propensity to start a business across genders, and that such differences primarily have perceptual causes, which cannot be easily changed by exogenous interventions. Yet, the persistent and pronounced difference in self employment between genders across similar innovation-driven economies signals the necessity to act upon the factors that might penalize women in entrepreneurship.

o There is also empirical evidence hinting at the fact that the level of IPR protection in our country is significantly low. In turn, this might discourage the most innovative new ventures from starting, as entrepreneurs anticipate they will not be able to appropriate all the value they create. Profiting from innovation is not an easy task, and being a successful entrepreneur requires more than just developing new ideas: it requires getting those ideas to the market and being able to appropriate the value these ideas can create. Invention is merely the first in a series of uncertain stages in the innovation process, and value appropriation is not automatic. The ability of ventures to capture value through innovation also rests on firms’ prospects to preserve the “uniqueness” of their innovation, that is, on their ability to control the knowledge generated by the innovation itself. In this sense, the effectiveness of the intellectual property system plays a major role. Hence, enforcing a stronger IPR protection policy might therefore foster entrepreneurial activities, in particular in the most innovative sectors.

• Managing expectations

. Growth is key to new business to gain the resources that ultimately determine their survival. Furthermore, high-growth entrepreneurial ventures have been shown to account for a significant share of jobs created and to represent fundamental players in a country’s economic growth. Yet, even when they start, our ventures do not plan to grow. Even if it has already been widely debated, the issue of which factors prevent Italian firms from growing still represents an unsolved problem emerging from the 2008 GEM results.

4 See M. Minniti and C. Nardone, “Being in someone else’s shoes: the role of gender in nascent entrepreneurship”, Small Business Economics, 2007.

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Appendix 1: GEM’s definition of entrepreneurship and data sources

GEM takes a broad view of entrepreneurship and focuses on the role played by individuals in the entrepreneurial process. GEM has two main data sources in each participating country, the Adult Population Survey and the National Expert Survey.

The GEM Adult Population Surveys ask a representative sample of at least 2,000 adults for each country about their attitudes to, and their involvement in, entrepreneurship. Italy had a sample of 3,000 in 2008. For many individuals the entrepreneurial process often starts with intrinsic assessments dealing with attitudes and perceptions to entrepreneurship. GEM, therefore, collects data on perceived opportunities to start businesses, perceived skills and knowledge to start businesses, national support for starting a business as a good career choice, and so on. Also, GEM asks adults about intentions to start a business in the near future. Unlike most entrepreneurship datasets that measure newer and smaller firms, GEM studies individuals’ activities with respect to starting and managing a business in general.

GEM also relies on National Expert Surveys, in which experts in several fields that are important for entrepreneurship are asked about conditions for entrepreneurship. These conditions are referred to by GEM as Entrepreneurial Framework Conditions (EFCs). Examples of such EFCs are national policies for entrepreneurship, entrepreneurial finance and the extent to which entrepreneurship is reflected in education and training.

The GEM research project views entrepreneurship as a process. Therefore, it needs to do more than compare entrepreneurial attitudes and aspirations of those who are and are not engaging in entrepreneurship. It also needs to capture attitudes, activities, and aspirations in different phases of entrepreneurship, from general intentions to a more active early or “nascent” phase where businesses are in gestation, to new businesses that can be identified as having commenced operations, to the established phase and possibly discontinuation of the business. An individual entrepreneur who has succeeded in creating and sustaining a business has gone through a process. The entrepreneurial process starts before the firm is operational. Someone who is just starting a venture and trying to survive in a very competitive market is an entrepreneur in spite of not having high-growth aspirations. On the other hand, a person may be an established business owner who has been in business for quite a number of years and still be innovative, competitive, and growth-minded. This person is also an entrepreneur. GEM provides an umbrella under which a wide variety of entrepreneurial characteristics, such as motivations, innovativeness, competitiveness, and high-growth aspirations, can be systematically and rigorously studied.

Exhibit 24: The entrepreneurial process and GEM operational definitions

Within this context, the GEM data collection covers the life cycle of the entrepreneurial process and looks at individuals at the point when they commit resources to start a business they expect to own themselves (nascent entrepreneurs); when they currently own and manage a new business that has paid salaries for more than three months but not more than 42 months (new business owners); and when they

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own and manage an established business that has been in operation for more than 42 months (established business owners). The following Exhibit summarizes the entrepreneurial process and GEM’s operational definitions.

For GEM, the payment of any wages for more than three months to anybody, including the owners, is considered to be the “birth event” of actual businesses. Thus, the distinction between nascent entrepreneurs and new business owners depends on the age of the business. Businesses that have paid salaries and wages for more than three months and less than 42 months may be considered new. The cut-off point of 42 months has been made on a combination of theoretical and operational grounds.

The prevalence rate of nascent entrepreneurs and new business owners taken together may be viewed as an indicator of early-stage entrepreneurial activity in a country. It represents dynamic new firm activity. Even if a fair share of nascent entrepreneurs do not succeed in getting the business started, their actions may have a beneficial effect on the economy since the threat of entry and of new competition can put pressure on incumbent firms to perform better.

Business owners who have paid salaries and wages for more than 42 months are classified as established business owners. Their businesses have survived the liability of newness. High rates of established business ownership may indicate positive conditions for firm survival. However, this is not necessarily the case. If a country exhibits high degree of established entrepreneurship combined with low degree of early-stage entrepreneurial activity, this indicates a low level of dynamism in entrepreneurial activity.

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Appendix 2: Glossary of main measures and terminology

Measure Description Entrepreneurial Attitudes and Perceptions

Perceived opportunities Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who see good opportunities to start a firm in the area where they live

Perceived capabilities Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who believe to have the required skills and knowledge to start a business

Entrepreneurial intention Percentage of 18-64 population (individuals involved in any stage of entrepreneurial activity excluded) who intend to start a business within three years

Fear of failure rate Percentage of 18-64 population with positive perceived opportunities (individuals involved in any stage of entrepreneurial activity excluded) who indicate that fear of failure would prevent them from setting up a business

Entrepreneurship as desirable career choice

Percentage of 18-64 population who agree with the statement that in their country, most people consider starting a business as a desirable career choice

Media attention for entrepreneurship

Percentage of 18-64 population who agree with the statement that in their country, they will often see stories in the public media about successful new businesses

Entrepreneurial Activity Nascent entrepreneurship rate

Percentage of 18-64 population who are currently a nascent entrepreneur, i.e., actively involved in setting up a business they will own or co-own; this business has not paid salaries, wages, or any other payments to the owners for more than three months

New business ownership rate

Percentage of 18-64 population who are currently a owner-manager of a new business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than three months, but not more than 42 months

Early-stage entrepreneurial activity (TEA)

Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business (as defined above)

Established business ownership rate

Percentage of 18-64 population who are currently owner-manager of an established business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than 42 months

Overall entrepreneurial activity rate

Percentage of 18-64 population who are either involved in early-stage entrepreneurial activity or owner-manager of an established business (as defined above)

Business discontinuation rate

Percentage of 18-64 population who have, in the past 12 months, discontinued a business, either by selling, shutting down, or otherwise discontinuing an owner/management relationship with the business. Note: This is NOT a measure of business failure rates

Improvement-driven opportunity entrepreneurial activity: relative prevalence

Percentage of those involved in early-stage entrepreneurial activity (as defined above) who (i) claim to be driven by opportunity as opposed to finding no other option for work; and (ii) who indicate the main driver for being involved in this opportunity is being independent or increasing their income, rather than just maintaining their income

Entrepreneurial Aspirations High growth expectation

early-stage entrepreneurial activity (HEA)

Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business (as defined above) and expect to employ at least 20 employees five years from now

High growth expectation early-stage entrepreneurial activity: relative prevalence

Percentage of early-stage entrepreneurs (as defined above) who expect to employ at least 20 employees five years from now

New product-market oriented early-stage entrepreneurial activity: relative prevalence

Percentage of early-stage entrepreneurs (as defined above) who indicate that their product or service is new to at least some customers and indicate that not many businesses offer the same product or service

Early-stage entrepreneurial activity in technology sectors:

relative prevalence

Percentage of early-stage entrepreneurs (as defined above) who are active in the ‘high technology’ or ‘medium high’ technology sector, as classified by OECD (2003)

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Appendix 3: How GEM data differ from other measures of entrepreneurship

GEM is a social survey directed at individuals. In GEM’s research perspective, it is individuals who are primary agents in setting up, starting, and maintaining new and entrepreneurial businesses. The main distinctions between GEM data and business registrations data are as follows:

• GEM data are obtained using a research design that is harmonized over all participating countries. Despite recent initiatives by Eurostat, OECD, and the World Bank, the harmonization of national business registrations has not yet been achieved. GEM data uniquely enables reliable comparisons across countries. The robustness of the GEM method is demonstrated by the stability of year-on-year comparisons at the country level.

• GEM’s research design implies statistical uncertainties in the aggregate (country-level) results. This is acknowledged by publishing confidence intervals for the obtained entrepreneurship indices. Business registration data are “count data” and as such do not require confidence intervals. However, the accuracy of registration data as a measure of new business activity is unclear for several countries. For example, in the UK, most businesses are not (and are not required to be) registered at all, while in Spain registration is compulsory before trading can commence. In some countries, businesses may be registered purely for tax reasons without entrepreneurial activity taking place, while in other countries businesses are deliberately not registered to avoid paying taxes.

• GEM tracks people who are in the process of setting up a business (nascent entrepreneurs), as well as people who own and manage running businesses. These also include freelancers, or other entrepreneurs who in some jurisdictions need not register. GEM also measures attitudes and self-perceptions regarding entrepreneurship. Insight about the earliest phase of the start-up process and the entrepreneurial spirit is very relevant for policy makers.

• The primary purpose of GEM is not to count the number of new businesses in different countries. It is about measuring entrepreneurial spirit and entrepreneurial activity through different phases of the entrepreneurial process. Therefore, GEM data may not be the best source for some basic firm-level characteristics, particularly in countries that tightly regulate new business activity and whose citizens have high respect for the rule of law. For example, to determine sector distribution of existing firms, registration data are mostly preferable over GEM data (with the possible exception of GEM countries with a large number of respondents, such as Spain and the UK).

• GEM generates more than measures of entrepreneurial activity; it also generates measures of entrepreneurial attitudes and aspirations. Examples are motivations for being self-employed, the degree of innovative activities, and growth expectation. However, these characteristics should always be derived from an adequate sample; to achieve this, one may need to merge the GEM samples over several years.

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Appendix 4: GEM Website and Data Availability

GEM is a consortium of national teams, participating in the Global Entrepreneurship Research Association (GERA, the umbrella organization that hosts the GEM project). Thanks to the effort and dedication of hundreds of entrepreneurship scholars as well as policy advisors across the globe, the GEM consortium consists of a unique network building a unique data set. Contact details, GEM 2008 National Summary Sheets, and national teams’ micro-sites can be found on www.gemconsortium.org. A selection of GEM data is also made available on this website. The GEM Website provides an updated list of the growing number of peer-reviewed scientific articles based on GEM data.

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Appendix 5: Contacts and Authors

If you would like to receive further information on this report, please contact: [email protected] Copies of GEM Global Report and GEM Reports on special topics. such as High Growth/High Expectation Entrepreneurship. Financing. and Women and Entrepreneurship. can be downloaded from: www.gemconsortium.org GEM Italy is coordinated by EntER, Bocconi University’s Centre for Research on Entrepreneurship and Entrepreneurs. EntER was established in 2004 by the Strategic Management Department and the Economic History Department. Its objective is to contribute to international networks dedicated to the study of entrepreneurship. Guido Corbetta is the AIdAF-Alberto Falck Professor of Strategic Management in Family Business at Bocconi University, where he also is Dean of the Graduate School. Alexandra Dawson, EntER research associate, has a fellowship from Bocconi University’s Management Department and is Contract Professor of Strategic Management. Giovanni Valentini is Assistant Professor of Strategy at Bocconi University.

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Appendix 6: GEM Italy Sponsors

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 130,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information, please visit www.ey.com

The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence in 40 countries. Its products and services aim to reduce its customers’ exposure to buyers who fail to pay for the products and services customers purchase. With total revenues of approximately EUR 1.8 billion and a 31% share of the global trade credit insurance market, its products contribute to the growth of companies throughout the world by protecting them from payment risks associated with selling products and services on credit. With 160 offices, it has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily.

For more information, please visit www.atradius.it