global entrepreneurship monitor characteristics of the entrepreneur maria minniti babson college...

Global Entrepreneurship Monitor

Characteristics of the Entrepreneur

Maria Minniti

Babson College

London, January 20 2005


Characteristics of the Entrepreneur

GEM estimates that about 73 million people are active entrepreneurs in the 34 nations that participated in the project in 2004

Who are these people and do they have anything in common?

Age, gender, education, and work status are considered in relation to the GDP per capita of the GEM nations


Characteristics of the Entrepreneur: AGE

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low income countries middle income countries high income countries

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18-24 years25-34 years35-44 years45-54 years55-64 years



•Different income groups have different levels of entrepreneurial activity across all age cohorts

•People between 25 and 34 years of age are the most active group regardless of the income of their country •After the age of 35, all populations show a decline in entrepreneurial activity

•The relationship between age and entrepreneurship is stable over time



The observed relationship and its stability suggest that age is important in the decision to become an entrepreneur

Why does the age distribution matter?

•In the short-term, the demographic structure is important for the immediate level of entrepreneurial activity

•In the long-term, demographic trends may have a significant impact on the level of entrepreneurship


Characteristics of the entrepreneur: GENDER

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low income countries middle income countries high income countries

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Characteristics of the Entrepreneur: GENDER

•In middle-income countries men are 75% more likely than women to be active entrepreneurs

•In high-income countries men are 33% more likely than women to be active entrepreneurs

•In low-income countries men are 41% more likely than women to be active entrepreneurs

There are almost twice as many men who are active entrepreneurs than women



Gender differences are consistent across age groups and across most countries

In no country are there more women who are active entrepreneurs than men, but there is wide variation between countries

The gender gap is narrower for necessity entrepreneurship than for opportunity entrepreneurship



Why does the gender gap matter?

•A strong correlation exists between the emancipation and the working conditions of women and the well-being of a country

•Women represent more than half the world population and a very large amount of human capital with huge potential

On March 8, 2005, the 1st GEM Report dedicated to Women and Entrepreneurship will be released


Characteristics of the Entrepreneur: Education

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

low income countries

middle income countries

high income countries

up to some secundary secundary degree post secundary



The relationship between education and entrepreneurial activity is complex and very much country-specific

About 30% of those who start a business have a secondary level education across all 3 income groups

In high-income countries 57% of entrepreneurs have a post-secondary education while 13% have not completed a secondary education

In low-income countries 23% of entrepreneurs have a post-secondary education while about 50% have not completed a secondary education



GEM results suggest that:

•more educated entrepreneurs pursue more opportunity-based ventures

•less educated entrepreneurs are involved out of necessity

•people who have a secondary level education tend to work for wages



How does education matter for entrepreneurial activity?

High-income countries need to emphasize R&D, technology commercialization and scientific education

Low-income countries need a strong commitment to education and training in order to reduce necessity entrepreneurships

Middle-income countries need a strong commitment to entrepreneurial education in order to develop an environment more conducive to entrepreneurship


Characteristics of the Entrepreneur: Work Status

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

low income countries

middle income countries

high income countries

working not working retired / students



The overwhelming majority of people starting businesses in all national income groups are currently working

• In middle-income countries 91% have jobs• In high-income countries 81% have jobs• In low-income countries 77% have jobs

The percentage of people starting a business without being also employed is

• 6% in middle-income countries • 17% in low income countries• 5% in high-income countries



How does work status matter for entrepreneurial activity?

No clear relationship exists between work status and entrepreneurial activity

Unemployment and necessity entrepreneurship tend to be positively correlated

Being employed elsewhere provides security and allows people to pursue opportunities


Characteristics of the Entrepreneur:

Who is Involved in Entrepreneurship?

Regardless of the level of income in their countries:

• 25- to 34-year-olds are the most active in entrepreneurship• Women are less likely than men to start businesses • Most people who start businesses work elsewhere

In addition: • In low-income countries, those with lower levels of education start businesses• In high-income countries those with higher levels of education start businesses• Unemployment and necessity entrepreneurship are highest in low-income countries

global entrepreneurship monitor characteristics of the entrepreneur maria minniti babson college...

Documents

age slide

gender slide

necessity entrepreneurship

education slide

age groups

active entrepreneurs

time slide

years of age