Global Entrepreneurship Monitor (GEM) 2007 Report: Entrepreneurship Is Going
Global

To download a copy of this report please see the pdf file entitled GEM_2008_Executive_Report.pdf at the bottom of this wiki.

WELLESLEY, Mass. Jan. 18 /PRNewswire-USNewswire/ -- Encouraging global
entrepreneurship is vital to improving economic growth worldwide according to
the ninth annual Global Entrepreneurship Monitor (GEM) 2007 Global Report. In
high-income countries and depending on the size of the national economy,
10-40% of early-stage entrepreneurs expect 25% or more of their customers to
come from outside their country. GEM also found that the more burdensome a
country's business regulations, the lower the entrepreneurs' expectations for
growth.

Directed by Babson College and London Business School, and released today, the
GEM 2007 Report strongly recommends that entrepreneurs organize to achieve
political influence to liberalize trade and investment policies on an
international level.

New this year, GEM looked at early-stage entrepreneurial activity among global
cities.

Niels Bosma, Utrecht University and Research Fellow, GEM Coordination Team,
says that across GEM nations, differences in levels and characteristics of
entrepreneurial activity are not only rooted in economics and development of
institutions supporting entrepreneurship, but also in culture and demography.

"Still," affirms Bosma, "we can observe a general tendency of a U-shaped
relationship between the rate of early-stage activity and per capita GDP. For
lower income countries, a decline in the rate of early-stage activity may
reflect economic progress and more job opportunities."

"The world economy needs entrepreneurs," says Babson Professor and GEM U.S.
team member Kent Jones, "and increasingly, entrepreneurs depend on an open and
expanding world economy for new opportunities and growth -- through trade,
foreign investment, and finance. GEM research confirms that new
entrepreneurial opportunities in all countries will expand if trade,
entrepreneurship and economic growth are fostered, especially in the
developing world."

"This, GEM's ninth annual review of entrepreneurial activity and perceptions,
spans 42 countries and is the world's largest research project focusing on
entrepreneurs and how they affect national economic growth" says Professor
Michael Hay, Director of GEM at London Business School. "It is a particularly
important piece of research because no other exists that can provide
consistent cross-country information and measures of entrepreneurial activity
in a global context".

Go to: www.gemconsortium.org or
here to download the GEM
2007 Global Report.

Key Global Findings:

-- In general, the 2007 data continue to show that early-stage entrepreneurial
activity tends to be high in countries with lower per-capita GDP, but declines
in middle-income countries, and then rises again in higher income countries.
The country-by-country profile of TEA against per-capita income thus shows a
U-shaped relationship.

-- A new feature of the GEM report this year presents early-stage
entrepreneurial activity rates for global cities based on the GEM Adult
Population Surveys 2001-2006. Early-stage entrepreneurial activity rates for
global cities show a similar pattern as the rates at the country level but
there are also cities with rates that diverge from this pattern. German cities
stand out with the highest rates in comparison to the average country rate.
Also, characteristics of entrepreneurship in global cities are different from
characteristics at the national level.

-- Middle and low- income countries in Latin America and Asia display high
rates of early-stage entrepreneurial activity. Among middle and low-income
countries, Thailand (26.9%), Peru (25.9%), and Colombia (22.7%) had the
highest rates.

-- Countries in Eastern Europe and Central Asia traditionally have relatively
low rates of early-stage entrepreneurial activity but the evidence for Croatia
points at an increasing rate over the period 2002-2007. Instead, most Latin
American countries tend to show a drop in early-stage entrepreneurial
activity, which may be natural progression toward higher per capita income.

-- As per-capita incomes rises in high-income countries, so does the rate of
early-stage entrepreneurship. However, cultural demographic and institutional
factors are also at play. Many EU countries consistently have relatively low
rates of early-stage entrepreneurship. Iceland (12.5%), Hong Kong (10.0%) and
the United States (9.6%) show the highest levels. Lowest rates were found in
Austria (2.4%), Puerto Rico (3.1%), and Belgium (3.2%).

-- Early-stage entrepreneurs from high-income countries are more likely to be
opportunity-driven (as opposed to necessity-driven and finding no other option
for work). Wider job opportunities and social security offer more alternatives
to entrepreneurship. In Norway and Sweden, most early-stage entrepreneurial
activity is part-time.

-- There is a strong correlation between the rate of early-stage
entrepreneurial activity and the general population's positive perceptions of
their entrepreneurial skills and opportunities for starting a business. Other
factors associated with early-stage entrepreneurial activity are whether
entrepreneurship is widely believed to be a good career choice, and the degree
to which it is reported in the media.

-- Among high-income countries, the USA, Israel, Iceland, and Canada show the
highest rates of high-growth expectation entrepreneurship (expecting to employ
at least 20 employees five years from now). Among middle and low-income
countries, China has the highest rate followed by Argentina.

-- Early-stage entrepreneurs are more likely than established business owners
to claim they offer innovative products and face less competition in the
marketplace. They also claim to use technologies that were not available to
them a year earlier. GEM also found that populations that embrace innovation
will have higher levels of early-stage activity.

-- Early-stagers are young (25-34). Men are more likely to start a business
than women. This gender gap is present among all age groups, but is relatively
small for countries in Latin America and the Caribbean.

-- In an increasingly globalized economy, international economic institutions
-- such as the World Bank and the World Trade Organization -- exert a growing
influence on entrepreneurs and their opportunities. They do so directly
through international trade agreements and indirectly by cultivating an
economic flexibility and adjustment -- building local market institutions,
infrastructure, and financing -- in an open world economy. GEM strongly
recommends that entrepreneurs organize to achieve political influence to
liberalize trade and investment policies.

-- GEM found that the more burdensome a country's new business regulations
(according to national experts in the field), the lower the ambition for
growth among a country's entrepreneurs.

-- Entrepreneurship is going global -- in some GEM countries, 40% of
early-stage entrepreneurs expected 24% or more of their customers to come from
outside the country.

GEM is a consortium of national teams, participating in the Global
Entrepreneurship Research Association. Contact details and national teams'
micro-sites can be found on www.gemconsortium.org. A selection of GEM data is
available including an updated list of the growing number of peer-reviewed
scientific articles based on GEM data.

One of the main GEM indices is the rate of early-stage entrepreneurial
activity (TEA), which is the prevalence rate of individuals who are either
involved in setting up a business or owner-manager of a new business (existing
up to 42 months) in the 18-64 population.