THE MISSING ENTREPRENEURS:ENTREPRENEURSHIP AND SOCIAL

INCLUSION IN EUROPE

INCLUSIVE ENTREPRENEURSHIP: OBSTACLES AND OPPORTUNITIES FOR JOB CREATION

28 NOVEMBER 2012COPENHAGEN, DENMARK

Dr. Jonathan Potter, Senior EconomistCentre for Entrepreneurship, SMEs and Local Development, OECD

• Objective:– Inform policy makers and programme managers in EU Member States about the

potential to support job creation and social cohesion through inclusive entrepreneurship measures at national and local levels

• Project activities:– Assemble data on self-employment and entrepreneurship by disadvantaged and

under-represented groups (scale and nature of entrepreneurship activity, barriers faced, employment impacts)

– Assess current policy approaches and recommend areas for improvement

– Profile good practice policies and programmes

– Build capacities of policy makers for policy design and implementation

• 2012 outputs– Annual Report

– Policy Briefs: Youth Entrepreneurship; Senior Entrepreneurship; Social Entrepreneurship

– Capacity Building Seminar: Financing for Inclusive Entrepreneurship2

Overview of the project

• Women have a lower activity rate

• Many youth are still in education and therefore activity rates are low but the youth unemployment rate is double the adult rate

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Labour market indicators, 2011

Source: Eurostat, Labour Force Survey

Labour Force Participation Rate Unemployment Rate0

10

20

30

40

50

60

70

80Adult (15-64) Youth (15-25) Women (15-64)

Feasibility of entrepreneurship

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Source: Flash Eurobarometer #283, 2009

• Youth have an optimistic view on the feasibility of entrepreneurship

• Women feel that business start-up is much less feasible than men

Seniors (55 +)

Core age adults (40 - 54)

Young adults (25 - 39)

Youth (15 - 24)

Female

Male

EU27

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

% Very feasible % Quite feasible % Not very feasible % Not feasible at all % DK/NA

“Regardless of whether or not you would like to become self-employed, would it be feasible for you to be self-employed within the next 5 years? ”

Source: Tabulations of the 2007-2011 Adult Surveys of the Global Entrepreneurship Monitor (GEM)

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New business ownership by country, 2007-11

0%

200%

400%

600%

800%

1000%

1200%Youth (18-30)

• There is substantial variation across countries, showing potential institutional barriers and policy opportunities

• New business start rates are low for women but this is not true for youth

0%

1%

2%

3%

4%

5%

6%

7%

8%Adults (18-64) Youth (18-30)

0%

1%

2%

3%

4%

5%

6%

7%

8%Men Women

Barriers to business start-up

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Youth

1. Little savings and difficulty accessing finance

2. Role models unaware of benefits of entrepreneurship

3. Education and training do not foster entrepreneurship

4. Lack of prior work and entrepreneurship experience

5. Lack of business networks

Women

1. Less comfortable seeking finance

2. Gender norms may discourage entrepreneurship

3. Tax, family and social policies which implicitly favour traditional roles

4. Less managerial and self-employment experience than men

5. Less likely to have developed networks

Perception of skills for entrepreneurship

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Source: Tabulations of the 2007-2011 Adult Surveys of the Global Entrepreneurship Monitor (GEM)

• Only half of the population feel that they have the skills and knowledge to start a business

• Women are less likely to feel that they have the skills than men

Fran

ce

Lith

uani

a

Czech

Rep

ublic

Net

herlan

ds

Ger

man

y

Hun

gary

Ital

y

Irel

and

Spai

n

Slov

ak R

epub

lic

Austr

ia

0%

10%

20%

30%

40%

50%

60%

70%Men Women

-10%

0%

10%

20%

30%

40%

50%

60%

70%Adults (18-64) Youth (18-30)

“Do you think that you have the required knowledge and skills to start a business?”

Technical Skills Business Management Skills

Personal Entrepreneurial Skills

Written and oral communication

Planning and goal setting Inner control / discipline

Monitoring environment Decision making Risk takingTechnical business management

Human Relations Innovative

Technology Marketing Change orientatedInterpersonal Finance PersistentListening Accounting Visionary leaderAbility to organise Management Ability to manage changeNetwork building ControlManagement style NegotiationCoaching Venture LaunchBeing a team player Managing Growth

Skills needed for entrepreneurship

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Source: Hisrich, R.D. and Peters, M.P. (1992) – Entrepreneurship: Starting, Developing, and Managing a New Enterprise – Irwin, Boston, MA

• Training schemes deliver general business (e.g. bookkeeping) and specialised skills (e.g. evaluation of risk)– Courses

– Workshops

– Seminars

• Personal relationships are effective– Mentoring for long-term development

– Coaching for building specific skills

– Mentors and coaches from the same community as mentees/students

• Experience– Start-up competitions

– Short-term projects

• Training for trainers

Training and mentoring services

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• Target group: Non-bankable young people aged 18 to 25 years

• Objectives: Provide business development support (e.g. coaching, workshops, consultation) and microfinace

• Type of evaluation: Impact assessment; value for money

• Method: Annual survey of participants

• Variables: Turnover, employment

• Results:– Controlling for deadweight and displacement, impact was ￡ 12.2-14.1

million per year and 288-316 FTEs

– Total cost per start-up was ￡ 2 351; for every ￡ 1 spent, generated ￡ 17 of additional net sales

• Source: Scottish Enterprise (2007), Prince’s Scottish Youth Business Trust (PSYBT) Evaluation of Impact and Strategic Contribution

The Prince’s Scottish Youth Business Trust, UK

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Junior Achievement Student Mini-Company Program, The Netherlands

• Target group: Vocational college students

• Objectives: To teach students to put theory into practice and to understand what entrepreneurship is all about

• Type of evaluation: Impact study

• Method: Difference-in-difference; compares students at two locations of the same vocational college (one that offers JA and one that does not)

• Variables: Surveys of student self assessments on measures of their entrepreneurial traits and skills before and after participation

• Results: No significant difference between the two groups

• Source: Oosterbeek, H., van Praag, M. and Ijsselstein, A. (2008) The impact of entrepreneurship education on entrepreneurship competencies and intentions: An evaluation of the Junior Achievement Student Mini-Company Program

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AntrES: Women School of Entrepreneurship, Romania

• Target group: Existing women entrepreneurs; women attempting to start a business in small towns and rural areas

• Objectives: Provide entrepreneurship training; role models

• Type of evaluation: Impact assessment

• Method: Pre-test, post-test analysis (n=405 for pre-test and 387 for post-test)

• Variables: Attitudes, motivations, awareness of available supports, abilities

• Results: Women involved have achieved in self-confidence and self-efficacy, a more realistic perception on how to be successful

• Source: Badulescu and Dodescu (2010), Entrepreneurial Training and the Attitude toward Entrepreneurship: Assessing the Impact of AntrES programme

• Ensure that support is provided pre and post start-up

• Training for youth should provide entrepreneurship experiences to help overcome a lack of labour market experience

• Female mentors should be used in the delivery of business development support for women but policy makers should aim to mainstream support where possible

• Deliver training with orgranisations that have experience with different communities to tailor the training to the distinctive needs

• Training and mentoring support should be promoted with tailored awareness and communication strategies to improve access and gain trust

• Ensure that trainers are aware of the specific needs of youthand women

Training and mentoring: Policy recommendations

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• More information is available online:http://www.oecd.org/document/60/0,3746,en_2649_34417_49308796_1_1_1_1,00.html

• More information on capacity building seminar:http://www.oecd.org/cfe/leedprogrammelocaleconomicandemploymentdevelopment/capacitybuildingseminarfinancingbusinessstart-upbyunder-representedgroupstrentoitaly.htm

• 2 Policy Briefs are available:– Youth Entrepreneurship

– Senior Entrepreneurship

• 2 Policy Briefs are forthcoming:– Social Entrepreneurship

– Evaluation of Inclusive Entrepreneurship

• Annual Report:– Available in February 2013

Further information

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