the oecd-eurostat entrepreneurship indicators programme preliminary indicators for italy, europe and...
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The OECD-EurostatEntrepreneurship Indicators
Programme
Preliminary Indicators for Italy, Europe and Other OECD
Urbino University, ItalyApril 22, 2008
Tim Davis OECD Statistics Directorate
Overview Entrepreneurship Indicators Programme (EIP)
What is the EIP? Why was it launched? Framework for Addressing/Measuring Ent’ship
Definitions An Entrepreneurship Model Core Indicators of Performance Determinant Indicators on Access to Finance
Exploring High Growth Some Entrepreneurship Indicator “Previews”
Genesis of Entrepreneurship Indicators Programme
2004-2005
OECD statistical activity initiated by: Kauffman Foundation Danish-led Consortium (ICE) OECD Centre for Entrepreneurship Ministerial (Istanbul) Eurostat also exploring entrepreneurship
Survey on Factors of Business Success (FoBS)
Outcome of Feasibility Study
Entrepreneurship was a policy priority Limited involvement of NSOs Internationally-comparable measures are
scarce Fundamental definitions and concepts missing Measures lacked Policy Context Need information on firms and entrepreneurs Basic business demography data incomparable Resistance to new firm surveys
OECD Programme
Engage countries; Get NSOs involved Make entrepreneurship data “mainstream” Common language, terminology, measures Entrepreneurship Measurement Manual Encourage common use of:
Core Definitions Framework for understanding and developing Indicators and data specifications
Formal partnership with Eurostat in 2007
Now an OECD-Eurostat Programme
Business Register based data collection
Leverage success in some countries to stimulate cooperation across all OECD/EU
NSOs maintain micro-data
OECD & Eurostat publish aggregates
Co-ordinate country-level , micro-data research e.g. Determinants of high growth
Pilot test new entrepreneurship questions
EIP Definitions • Entrepreneurs: those persons (business
owners) who seek to generate value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets.
• Entrepreneurial activity: the enterprising human action in pursuit of the generation of value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets.
• Entrepreneurship is the phenomenon associated with entrepreneurial activity.
Some Important Principles Entrepreneur vs. Entrepreneurship Not just small or young firms Not all firms are entrepreneurial They are doing something “new” Some entrepreneurs fail “Value” can be defined in different ways Indicators focus on business
entrepreneurship
Definitions and Indicators EIP offers broad definition of entrepreneurship No single measure perfectly reflects definition Must distinguish types of entrepreneurship Employers vs. non-employers Measures of High Growth and Gazelles Innovative firms Exporting firms
For example…………….
Sub-Dividing Entrepreneurial Firms
Low Growth Replicators
Degree of Innovation
High Growth Replicators
Co
mp
any
Gro
wth
Low Growth Innovators
High-Growth Replicators
Low Growth Replicators
High-Growth Innovators
A Simple Model
Determinants of Entrepreneurship
Entrepreneurial Performance
Impact of Entrepreneurship
R&D and Technology
Market Conditions
Regulatory Framework
Culture
Public ProcurementCourt & Legal
Framework
Administrative Burdens for Entry
Administrative Burdens for Growth
Bankruptcy Regulations
Access to Debt Financing
Determinants
Safety, Health and Environmental
Regulations
Access to the Domestic Market
Desire for BusinessOwnership
Access to Foreign Markets
Technology Diffusion
Access to Finance
Anti-Trust Laws
Training andexperience ofentrepreneurs
Competition
Entrepreneurial Capabilities
R&D InvestmentRisk Attitude
in Society
Attitudes TowardsEntrepreneurs
Degree of PublicInvolvement
Business AngelsBusiness and
EntrepreneurshipEducation (skills)
Access to VC
Technological Cooperation
Between Firms
Access to Other Types of Equity
University/ Industry Interface
EntrepreneurshipEducation (mindset)
Patent System; Standards
Stock MarketsBroadband
Access
EntrepreneurshipInfrastructure
Immigration
Social and Health Security
Income, Wealth,Business and Capital Taxes
Product & Labour Market Regulation
Core Indicators
Employer firm birth rateHigh Growth Firm Rate by
EmploymentHigh Growth Firm Rate by Turnover
Employer firm death rate Gazelle Rate by Employment Gazelle Rate by Turnover
Business churn Ownership rate start-ups Value-added by young firms
Net business population growth Ownership rate business population Productivity contribution, young firms
Survival rate, 3 and 5 yearsEmployment: 3 and 5 year old
firmsInnovation Performance, young or
small firms
Proportion 3 and 5 year survivalAverage firm size after 3 and 5
yearsExport Performance, Small firms
Firm-based Employment-based Other
Entrepreneurial Performance
Some Data Previews….
Preliminary OECD-Eurostat Results
Employer Firm Birth Rate
0
2
4
6
8
10
12
14
16
Employer Enterprise Birth Rate Percentages, 2005 data (2)
(1) ISIC 3; Sectors C to K; also includes Sector O for Canada(2) 2003 for Canada, 2004 for the United States
Employer Firm Birth Rate
0
5
10
15
20
25
Employer enterprise birth rate by sector%, 2005 (1)
Italy
United Kingdom
United States
(1) 2004 for the United states
Employer Firm Death Rate
0.0000
2.0000
4.0000
6.0000
8.0000
10.0000
12.0000
14.0000
Employer Enterprise Death Rate %, ISIC 3 sectors C to K (1), 2004 (2)
(1) C to O for Canada(2) 2002 for Canada
Business Churn
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Employer Enterprise Churn Rate (1)Percentages, 2004 data (2)
(1) ISIC 3; Sectors C to K; also includes Sector O for Canada(2) 2002 for Canada, 2005 birth rate + 2004 death rate for Hungary, Italy, Netherlands, Romania and Slovak Republic
Survival Rate, 3 and 5 years
0
10
20
30
40
50
60
70
80
90
Enterprise Survival ratePercentage, 2005 data, Sectors C to K
3-year
5-year
Source: Eurostat
Survival Rates by Sector, Italy
0
10
20
30
40
50
60
70
80
Survival rate by sector for Italy%, 2005
3-year
5-year
Source: Eurostat
High Growth
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Denmark Finland Latvia Spain italy US BLS Canada Sweden Poland
Comparing High-Growth Rates by Employment Growth Threshold(Thresholds are % Growth Rates per Year, Over 3 Years)
15%
20%
25%
30%
40%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Denmark Latvia Spain Italy US C US BLS
Employment-based Gazelle Rates; Various Employement-Growth Thresholds and Age Limits
15%
20%
25%
30%
40%
5 years maximum at end of 3 year reporting period
8 years maximum at end of 3 year reporting period
Gazelle Rates– Preliminary OECD-Eurostat Results
Business Ownership Start-up Rate
Business Ownership Rate
0
5
10
15
20
25
Business ownership rate (1)
% of total labour force, 2006
(1) Private sector excluding agriculture, hunting, forestry and fishingSource: EIM Compendia database
Average Firm Size After 3 and 5 Years
0
1
2
3
4
5
6
7
Average number of persons employed by age%, ISIC 3 sectors C to K, 2005
3-year
5-year
Source: Eurostat
Value-Added by Small Firms
0
5
10
15
20
25
30
35
Proportion of Value-Added and Number of Employees in Enterprises with Less-Than 20 Employees, Manufacturing, 2005 1
As a % of Total Value-Added or Total Number of Employees
Percentage of Value Added Percentage of employees
1) 2004 for Czech Republic, Japan, Norway and UK; 2003 for New Zealand; 2002 for USASource: OECD Structural and Demographic Business Statistics (SDBS) database
Export Performance of Small Firms
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Export performance: Total export by size class (1)2003, as a percentage of total value
0-9 10-49 50-249 250 or more Unknown
(1) Provisional data (exports +dispatches)(2) For the United States, '0-9' size-class includes unknown)Source: Eurostat (EU countries) and the US Census Bureau
Export Performance of Small Firms
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Export performance: Export outside EU by size class (1)2003, as a percentage of total value
0-9 10-49 50-249 250 or more Unknown(1) Provisional Source: Eurostat
VC: Start-up vs. Development
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
%
Early stage and Expansion investments as a percentage of GDP, 2006
Seed/Start-up Early development and Expansion Venture Capital (not detailed)
Notes: Venture Capital includes Seed, Startup, Early development and Expansion stages. Later stages and Buyouts are excluded except for Chile, Mexico, and Brazil. Total OECD excludes Luxembourg, Turkey and Iceland. Source: OECD based on data from Thomson Financial, PwC, EVCA, LVCA and National Venture Capital Associations
010002000300040005000
Slovak RepublicCzech RepublicPortugalAustriaPolandJapanFinlandNew ZealandGermanyFranceKoreaHungarySwedenIrelandNorwayDenmarkNetherlandsCanadaSpainAustraliaGreeceBelgiumEUSwitzerlandUnited KingdomIsraelItalyUnited States
Venture Capital average deal sizein 000 USD
2006 2004
0 1000 2000 3000 4000 5000 6000 7000
Slovak RepublicPortugal
PolandFinland
Czech RepublicHungary
AustriaJapan
ItalyGermany
SwedenGreeceIrelandFrance
NetherlandsBelgium
AustraliaNorway
KoreaSpain
DenmarkEU
SwitzerlandIsrael
United StatesCanada
United Kingdom
Early Stage average deal sizein 000 USD
2006 2004
Enterprise vs. Employer Enterprise
0
2
4
6
8
10
12
14
16
18
20
Hungary Italy Netherlands Romania Slovak Republic United States
All Enterprise and Employer Enterprise Birth rates%, ISIC 3 sectors C to K , 2005 (1)
All firms Employer enterprises(1) 2004 for the United States
www.oecd.org/statistics/entrepreneurshipindicators
SDBS: http://www.oecd.org/document/17/0,3343,en_2649_34233_36938705_1_1_1_1,00.html
Le manuel BD : www.oecd.org/std/industry-services/businessdemographymanual
SDBS: [email protected]