hunter centre for entrepreneurship @ strathclyde
Global Entrepreneurship MonitorScotland 2004
Jonathan LevieSara Carter
Catherine A.C. Currie
GEM Research Questions
• Does the level of entrepreneurial activity vary between countries? By how much?
• What makes a country entrepreneurial?• What are appropriate policies for enhancing
entrepreneurial activity?
GEM Scotland Aims
• How Scotland compares to the UK and other small high income nations?
• Which factors account for Scotland's level of entrepreneurial activity?
• What are the implications for public policy?
GEM2004 Method & Measures
• Representative sample: 2000+ adults per nation
• Standardised cross-national data: 34 nations
% of adults actively starting a business
(nascent entrepreneurship rate)
Total Entrepreneurial Activity
(TEA)
% of adults running a new business (owner/managers of businesses < 3½ yrs old)
+ =
2004 - Summary Highlights
• Scottish TEA rate stable at 5.1% (2003: 5.5%)• Attitudes have improved over 2000 – 2004,
particularly among women• Scottish and UK female TEA rates now equal • In-migrants and immigrants 4 times more likely
to start new businesses than life-long residents• Remote regions have relatively high TEA rates• Scottish informal investment rate matched the
UK rate (1.3%) but still less than half the rate for small high income nations
• Launch of Fresh Talent initiative and the Social Entrepreneurs Fund
-5
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Nor
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TE
A r
ate
(%
)How Scotland Compares
TEA rates for 34 sovereign nations and Scotland
FinlandDenmark Norway
Ireland
NewZealand
United KingdomScotland
Israel
Entrepreneurship by Gender
Male TEA rate is twice female TEA rateand more volatile from year to year.
0
1
2
3
4
5
6
7
8
9
2000 2001 2002 2003 2004
Year
TE
A r
ate
(%)
Males
Females
Overall trend is upward but slow
Attitudes to entrepreneurship by gender
Entrepreneurial capacity (i.e. perceived knowledge, skills and experience) has improved…
Male
Female
0
10
20
30
40
50
60
70
2001
2001
2002
2002
2003
2003
2004
2004
% s
ayin
g Y
es
…although significantly fewer females agreed with the statement
Origin and entrepreneurship in Scotland
In-migrants and immigrants delivered double the expected number of entrepreneurs…
GEM 2004 sample Scots Born Non Scots Born
Type of respondentLife-long residents
Internal migrants In-migrants Immigrants
TEA rate 2.6 4.7 13.1 7.5
% of all entrepreneurs 19 36 37 8
% of respondents 37 42 16 4
…while life-long residents delivered half the expected number of entrepreneurs
Location of entrepreneurshipSignificant gender difference in TEA rates in urban areas…
… but no gender difference in TEA rates in remote areas
Origin and location of entrepreneurship
People born outside Scotland had a significantly higher TEA rate in urban and remote areas
Informal Investment Rate
Scottish informal investment rate same as UK rate (1.3%) but half that of small high income nations
0
1
2
3
4
5
2000 2001 2002 2003 2004
Year
Info
rma
l in
ve
stm
en
t ra
te (
%)
Scotland UK Small high income nations
Investment in new business
Informal investment versus venture capital
0
100
200
300
400
500
600
2000 2001 2002 2003
Year
£ m
illi
on
New business informal investment
Early stage equity risk capital*
Early stage investment BVCA members*
*Source: Harrison & Don, 2004
Policy Implications
• In-migrants make a major contribution to new business activity: scope for increasing TEA rate through Fresh Talent Initiative
• Reduced capitalisation and increased self-funding of new businesses suggests a capital gap remains
• Widen Business Start-up Scheme to over 30s• Social Entrepreneurs Fund should help to
spur “thinkers” into “doers”• Scottish Enterprise assists one third of new
businesses: is this sufficient?
Attitudes to entrepreneurship by gender
Perception of opportunity to start a business in the next 6 months has increased…
Male
Female
0
10
20
30
40
50
20
00
20
00
20
01
20
01
20
02
20
02
20
03
20
03
20
04
20
04
% s
ay
ing
Ye
s
…with female levels recovering to 2000 rates
In-migrants and TEAIn-migrants deliver twice the rate of TEA given their proportion of the sample across urban, accessible and remote
URBAN
Scots born Non Scots born
Type of response Lifelong residents Internal migrants In-migrants Immigrants Total
TEA rate 3 4 13 8 5
% of all entrepreneurs 26 32 34 9 100
% of all respondents 44 38 12 5 100
ACCESSIBLE
Scots born Non Scots born
Type of response Lifelong residents Internal migrants In-migrants Immigrants Total
TEA rate 2 5 7 0 4
% of all entrepreneurs 14 57 29 0 100
% of all respondents 33 44 18 4 100
REMOTE
Scots born Non Scots born
Type of response Lifelong residents Internal migrants In-migrants Immigrants Total
TEA rate 6 7 15 40 9
% of all entrepreneurs 21 36 29 14 100
% of all respondents 35 45 17 3 100
Types of business being started by gender
Steady rise in the number of women entering business services
0
10
20
30
40
50
60
70
Consumer Services Business Services TransformingBusinesses
ExtractiveBusinesses
Pro
po
rtio
n o
f to
tal (
%)
2001 Males 2001 Females 2004 Males 2004 Females