OUTCOMES FROM:UNDERSTANDING ENTREPRENEURSHIP: ISSUES AND NUMBERS

ENTREPRENEURSHIP INDICATORS PROJECT EXPERT WORKSHOP26-27 OCTOBER 2005

The first phase of the Entrepreneurship Indicators Project will culminate in the delivery of a plan for an international entrepreneurship indicators programme. This work plan will be presented at the end of February 2006. Among other elements the plan will include recommendations on an international data collection initiative, content, data sources, management and governance, as well as, importantly, plans for engaging countries and other stakeholders in the programme. The Expert Workshop, held in Paris on October 26-27, 2005, was designed to provide critical inputs to that overall plan.

The Expert Workshop involved some forty selected experts from government, academia and the OECD. The agenda of the meeting can be found in Annex 2 of this paper. Through their invited presentations and discussions they were asked to debate and advise on the programme and plans for the Entrepreneurship Indicators Project. More specifically, the Workshop participants were asked to address seven questions:

· Why is Entrepreneurship important?

· What are, or should be, the key policy issues?

· What does the existing data offer?

· Where are the remaining data gaps?

· Is there a need for standard definitions?

· How can data best be assembled or developed?

· How can countries be engaged to join and support an international programme?

This document provides a summary of the key outcomes of the workshop.

Why is Entrepreneurship Important?

The Workshop underscored several aspects of the importance of entrepreneurship. The first relates to the link between entrepreneurship and economic growth. The second concerns the link between entrepreneurship and job creation. And the third concerns the role that entrepreneurship could play in improving the economic and social position of groups within society.

There is some debate about whether entrepreneurship causes economic growth or whether it is a facilitator or enabler of economic change. The evidence appeared to be that both entry and exit played a very powerful role in enhancing productivity. If anything, it appeared that if entrepreneurship led to the

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more rapid exit of low productivity firms, that this was particularly desirable when they were replaced by new firms that were more productive.

FORA, the Danish Ministry of Economic and Business Affairs' Division for Research and Analysis, did a study using a database in Denmark containing all firms to investigate the link between high growth firms and multi-factor productivity (MFP). On the x-axis is the growth level within a given industry (100 industries and all firms less than five-years old in Denmark). When one looks at the growth rate within that industry and the MFP (turnover) within that industry, the graph confirms that high productivity firms do grow.

Copyright 2005 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk

High growth and MFP

0,6

0,8

1

1,2

1,4

1,6

1,8

-150 -100 -50 0 50 100 150 200 250 300

Growth among new firms within a given industry

MFP

leve

l, 20

02

Average MFP level, 2002

The link between entrepreneurship and employment growth was also emphasised. Entrepreneurship is often closely associated or equated with SMEs and hence, the size of the firm. However, it was shown that in looking at the net employee change, after two years of age, every cohort loses, not gains employment. The reason for this is productivity. Therefore, when we look at entrepreneurship as being important in terms of job creation, it is actually the age, and not the size of the firm that is important. In this sense, it is important not to equate all SMEs, not matter what the age, with entrepreneurship.

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150%

143%

-36%

-18%-15% -15% -12% -12% -10%

-7%-19% -14% -15% -20%

-75%

-25%

25%

75%

125%

175%

225%

275%

0-1 years 2-3 years 4-6 years 7-9 years 10-13 yrs 14-18 yrs 19 or older

Years of Age in 1996

Per

cent

of t

otal

net

job

grow

th (

1.87

mil)

multi-unit locations

single unit firms

Figure B:Figure B:19951995--96 Net Job Growth by Age and Type of Establishment96 Net Job Growth by Age and Type of Establishment

It was recognised that entrepreneurship could also play an important social function. Some ethnic minorities, throughout history, have seen entrepreneurship as a way of escaping from disadvantage, particularly the case for recent immigrants. In other cases women have often not been able to be considered as equals in the male-controlled corporate structure and have seen entrepreneurship as an appropriate and desirable employment opportunity.

What are, or should be, the key policy issues?

Despite the explosion of entrepreneurship research in recent years, there still seems to be a disconnect between research and policy. Anders Lundstrom has recently characterised Swedish initiatives in support of entrepreneurship as “trial and error”, “not based on any theoretical foundation” 1. And Sweden is not alone; many other countries rely on case studies and best practices, rather than empirical evidence, to assess the impact of their entrepreneurship programmes.

With respect to broader entrepreneurship policy issues, five specific policy questions emerged from the Expert Workshop. These were:

· What kind of a framework can be used to examine priories in entrepreneurship policy?

· What are the most relevant policy areas?

· What can be learned from more enterprising countries?

· Can less enterprising countries change their policies so as to become more enterprising?

· Will these policies actually make a difference?

1 Lundstrom, A., Effects of Initiatives on SMEs Development, 2005

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What kind of a framework can be used to examine priories in entrepreneurship policy?

David Storey asked the participants to consider entrepreneurship policy from the point of view of the constraints that prevent one from becoming an entrepreneurship. The constraints that could form the basis for policy could be, for example:

· Ideas/opportunity· Financing· Motivation· Information· Lack of Skill

Anders Lundström, President of the Swedish Foundation for Small Business Research, looks at entrepreneurship policy from a model that 1. provides motivation, 2. provides skill and 1. provides opportunity. According to him the policy for entrepreneurship and SME overlap. Entrepreneurship policy begins at the pre-start phase, through the nascent phase, up until the post start-up up to 42 months. The SME policy begins at the nascent phase and goes until maintenance and expansion. Therefore, the overlap phase is between nascent and post start-up to 42 months.

EntrepreneurshipPolicy

SME-Policy

Time process

Pre-start period Start -up Post-start-Up Maintenanceand expansion

Nascent phaseUp to 42 months

The Interconnection between SME and Entrepreneurship Policies

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He provides a list of different types of entrepreneurship policy measures, examples of stated problems in implementing the policy, how much research has been done and examples of possible policy initiatives.

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Different types of entrepreneurship policy measures

Type ofmeasures

Problems stated(examples)

Knowledgefromresearch

Objectives(examples)

Administrativeburden

Too manyHigh compliance costs

Limited butincreasing

Decreaseregulationswith x %Improvingperceivedopportunity

Seed financing

Entrepreneurshipeducation

Lack of seed capitalRelatively high costs

Lack of role modelsLack of awareness

Extensivebut conflicting

Limited

Increase seedcapital in differentforms

Increase theawareness to bean entrepreneur

Tax incentives Increase expectedprofits

Limited Increase the no ofstart-ups

Counselling andinformation

High costsLack of competence

Limited andconflicting

IncreasecompetenceFree information

Evaluation Problems and Perspectives

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Different types of entrepreneurship policy measures

Type of measures Problems stated(examples)

KnowledgeFromresearch

Objectives(examples)

R&D andinnovations

Need for renewalTechnology transfer

Limited andconflicting

Increase innovativeentrepreneurship

Export Low degree ofinternationalisationLack of competence

Limited Create betterinternationalpossibilities

Target groups (e.g.womenentrepreneurs)

Promotion activities

Networking

Too few

Lack of awareness androle-models

Lack of individualcompetence andresources

Some mainlystatisticlyoriented

Limited

Limited

Increase the degreeof start-ups forunderrepresentedgroups

Create morepositive attitudes forentrepreneurship

Create moreawareness ofdifferent policyprograms

Source: Revised from Lundström and Stevenson, 2002

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Evaluation Problems and Perspectives

Anders Hoffman is creative director of FORA, as the head of the International Consortium for the Dynamic Entrepreneurship Benchmarking. The goal of the Danish government is to be a leading entrepreneurial society, where the most high growth enterprises are launched by 2015. On order to achieve this goal, FORA has elaborated a General Policy Framework for Entrepreneurship to serve as a model for the collection of indicators which can then, in turn, be used to create systematic evaluations and internationally comparable benchmarks of entrepreneurship policies. Dr. Hoffman pointed out that the two

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main contributions to a policy framework come from Audretsch, Thurik and Verheul (Audretsch et al, 2002) and Lundström and Stevenson (Lundström and Stevenson, 2001, 2002, 2005) which are shown below. FORA’s model follows.

Copyright 2005 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk

Favourable business climate e.g. tax regime, competitive environment, savings, flexible labour market, competitive banking system, low inflation, low interest rates, etc.

Opportunity

Skills

Motivation

Influence ‘will to grow’ motivation Promote new business possibilities Promote growth possibilities Promote role-models

Make it easier to survive and grow. Improve access to resources - financing, networks, expertise. Improve access to markets, employees, technology. Reduce regulatory and labour market obstacles. Make it easier to gain management know-how. Access to counselling, technical assistance, management skills, peer networks, ‘best-practice’ management tools, performance.

Make it easier to gain management know-how. Put entrepreneurship education in schools. Tailor entrepreneurship training programs. Support student venture programmes. Establish peer learning networks.

Make it easier to go through the steps. Reduce entry/exit barriers. Improve access to advice, information, networks, mentoring, incubators. Provide access to micro-loans and seed capital.

Increase awareness and legitimacy of entrepreneurship. Provide information about its role in society. Profile role-models Promote entrepreneurial Role as feasible option

For start-up Create entrepreneurial climate For growth

General Population ’A want-to-be’ Nascent Start-Up Survival Growth

t-n t t+ 42 months

Copyright 2005 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk

Audretsch, Thurik and Verheul

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Copyright 2005 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk

Our model

Incentive structurePotential benefits versus

Potential costs

DemandPotential amount of

entrepreneurship opportunities

SupplyNumber of potential entrepreneurs with skills and capital

EntrepreneurshipActivity

Motivation/CultureEntrepreneurial motivation

What are the most relevant policy areas?

One of the most important things to keep in mind when setting policy priorities, according to Alistair Nolan of the OECD, is selecting areas that policy makers will support because they believe there will be a yield. Many aspects that have an effect on entrepreneurship will not be of use to policy makers. For example, it has been shown that entrepreneurs who maintain contact with other entrepreneurs tend to be more successful. However, this is not an area in which policy can intervene. Likewise, even though we know the profile of someone who is more likely to become a successful entrepreneur we cannot deny those who are less likely entrepreneurship advisory services.

Mr. Nolan created a wish list of entrepreneurship data to be used in the policy areas gaining increasing importance.

1. More time series data to better understand framework conditions and the impact they have in support of high quality business creation is needed.

2. Although we have quite a bit of information on regulatory burden and administrative barriers, there is a paucity of information on tax effects.

3. Why is there such a difference between the rates of stated preference for self-employment and actual lower rates of self-employment?

4. More work is needed on gazelles. They make a disproportionately high impact in terms of growth and employment. Why do they exist and what are the key traits?

5. Data related to demographic change. Life expectance increases by one month each year but only 1 in 3 French over the age of 55 are economically active. Japan responds with programmes to encourage older groups to stay economically active. Age based over-sampling in an international survey to gain greater analytical depth could be a possibility.

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6. Data related to technological change. There are important differences across countries in regards to their patterns of technology use. According to the OECD adult literacy and life skills survey which surveyed 7 or 8 countries, in Norway 7% of the adult population has never switched on a computer. The percentage is 40% in Italy. This is extremely relevant to policy.

- Internet using firms have high value added, superior job creation, higher salaries, higher performance, but we do not know the direction of causality. Is it because of the Internet, or do higher performing firms use the Internet?

- Technology will bear out in how the services are provided for entrepreneurs. GEM indicates that business angel networks are important in that they allow entrepreneurs to bypass standard introduction procedures. But it could also encourage angel networks to add value to other services, for example, work with clients on equity for service arrangements, pick out best projects etc.

7. Impact of demonstration and motivational effects. Importance of imitation in driving entrepreneurship. Intergenerational component. Many entrepreneurs come from families with a history of entrepreneurship. Women having a husband who is self-employed are twice as likely to choose this path. Is imitation significant, or is it other factors? If you are in an area with low rates of start-ups and imitation is an important variable, then you are likely to have low-rates in the future as well.

8. Marital stability in family owned firms could have policy ramifications given that family pensions and mortgages are often tied up in family businesses. Marital and spousal support for couples that are entrepreneurs is not available.

9. Regional and local data.

- Under what conditions and how will enhancing the birth rate also add to regional growth? The fact that we see strong correlations over time in the birth rate in the same regions, in the same places gives grounds for pessimism about the efficacy of public policy in the ability to change birth rates. However, the policy stakes are sufficiently high and volume of resources dedicated to regional development in the European Union are so great that this is clearly an issue that merits continued analytical attention.

- At the regional level there is almost no data examining the impact of sub-national regulations on entrepreneurial activity. There was one study done in the US that looked at state building codes, land use and zoning. This study suggested that there is a significant compliance burden and had an adverse effect on small and minority firms and their start-up decisions.

- Individual programmes at local level. Training, incubations, micro-finance are not being examined with any degree of rigor and could provide clues as to interesting things that may be going on in different countries and point to robust policy oriented research agendas.

André Letowski of the Agence pour la Création des Entreprises (APCE) of France suggested that the two biggest obstacles to entrepreneurship in France are the parents and the media. Parents tend to warn their children against risk taking instead of encouraging it and prefer their child choose a secure path as an employee. The media focus on examples of the extremely rich, successful and intelligent entrepreneur which gives an image of inaccessibility and intimidation, as opposed to presenting entrepreneurship as possible career choice for everyone.

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The International Consortium has defined the relevant policy areas based on 61 indicators and assessed them on the basis of the quality dimensions relevance, accuracy and availability. They then tested them for correlation between the indicators chosen for performance and those chosen to measure the business environment across countries. As correlation was demonstrated, they then chose the areas the most critical to investigate. Then they compared Denmark’s performance in those areas to the best performing countries and came up with a list of the most critical policy areas for Denmark.

Those areas deemed the most important in Denmark are:

· Venture capital

· Bankruptcy legislation

· Entrepreneurship education

· Personal Income tax

· Labour market regulation

What can be learned from more enterprising countries?

It is clear that the United States, which is generally taken as an exemplar of an enterprising country has low tax rates, low levels of regulation, but also low levels of business support. Its policy focus is on enhancing competition with the private sector playing the leading role. Denny Dennis from the NFIB Research Center stressed that the US has a competition policy, not an entrepreneurship policy.

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16-Jan-2006 5

The American Approach – A Competition, Not an Entrepreneurship (or SME) Policy

The Policy –

Vigorous (if not vicious) competition

Few impediments (relative) Little direct assistance (relative) Creeping social policy A supportive culture

Continued growth of social and environmental regulation

In contrast Europe is a relatively high tax economy with high levels of social security and high – if decreasing – levels of regulations.

It is also clear that it is not simply SME policy which influences the performance of small firms and contributes to overall levels of enterprise. Indeed the view of the workshop was that it was overall economic policy that was most influential upon the competitiveness of SMEs. It was also clear that government budgets earmarked specifically for SMEs were comparatively modest in comparison with overall government funding from which SMEs benefited.

Can less enterprising countries change their policies so as to become more enterprising?

The view of the workshop was that it is possible to change policies. From the paragraph above, it is clear that other developed countries could change their policies to become more like the US, but the price of so doing may be too high.

Specifically such changes would require a greater acceptance of a less equitable distribution of wealth. It would also require public acceptance of taxes being lowered on wealthy individuals and a reallocation of power away from suppliers and towards customers. There would clearly be strong vested interests that would oppose such changes and, given the inevitable short-term horizon politicians, such long-term changes might be difficult to implement. Nevertheless, the key point is that the knowledge of what is required is available.

Will these policies actually make a difference?

The workshop had different views on this question. Some participants pointed to the changes which the United States has undergone since the 1960s when it was essentially a corporatist society. During the intervening period it has experienced significant cultural change moving towards a greater focus upon enterprise. The economic success associated with these changes, has served to reinforce movements towards an increasingly enterprising economy.

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However, other participants were less convinced about the possible impact policy change. In particular, they were unsure whether all of the elements in the policy package were equally important, so that a ‘pick and mix’ approach was not possible. To take a specific example it might be that even if a country spent heavily on entrepreneurship education and business support, but failed to reform a generous social security package the impact upon enterprise might still be modest. Finally, as was noted in the paragraphs above, the ‘price’ for becoming an enterprising society might be unacceptable to many.

Existing Data

A number of activities are currently available at international or national level concerning the collection of data on entrepreneurship. The list is far from being exhaustive; it is rather an initial effort accounting for existing data that directly or indirectly refer to some sort of entrepreneurial activity.

At the international level, the Global Entrepreneurship Monitor (GEM2) is a research programme initiated in 1998 which accounts for an annual production of harmonised data on entrepreneurship in some forty countries. Along with generic information on the population structure (gender, age, geographic distribution, ethnic background, education, etc), GEM collects standardised information on total level of national entrepreneurial activity (TEA) and factors that account for national differences in the level of entrepreneurship, so as to allow for assessment of policies for enhancing entrepreneurship and estimation of the role of entrepreneurial activity in national economic growth.

At the European level, two surveys are worth noting: the Eurostat Factors of Business Success (FOBS) and the Eurobarometer (European Commission). The FOBS, involving 15 European countries, complements information on harmonised data on enterprise births, survivals and deaths3 where determinants of success and growth of newly born enterprises, motivations for starting up ones own business, barriers and risks encountered during the first years of existence and business plans for future development are explored. The target population of this survey are enterprises that survived for more than three years, hence the current survey is addressing newly born enterprises that entered the economy in 2002 and survived through 20054.

The European Commission has also been conducting longitudinal analysis of dynamic trends for the past five years through the Eurobarometer survey. It measures European and American attitudes on annual basis through telephone interviews. Such a summary represents the first effort in a series of annual reports investigating the scope and manner of regulations in order to enhance business activity.

The Panel Study of Entrepreneurial Dynamics (PSED) is designed to improve the understanding of the start-ups phenomenon (Reynolds, Carter et al.). The PSED is a U.S. research programme that provides longitudinal data on business formation. The modelling investigates external factors that may influence entrepreneurship: from a political, sociological and economic prospective. The survey uses a mix between detailed phone interviews and self-administrated questionnaires to contact respondents.

The above mentioned works provide examples of existing data on entrepreneurship. Additional indicators, both qualitative and quantitative, will be documented in subsequent Reports by the Entrepreneurship Indicators Project. While the existing data have been useful in identifying the extent and importance of entrepreneurship, none of them are sufficiently comprehensive and internationally comparable to satisfy the needs of policy makers.2 Reynolds, P., Bosma, N.S., Autio, E. et al. (2005).3 Such information is taken from the existing Eurostat project “Business Demography”. The database collects information on firms

from 1997 to 2002 on 17 member states plus Norway and Romania. More information at www.epp.eurostat.cec.eu.int

4 NACE activity classification from C to K, excluding 74.15. NACE activity and employment size class are observed at birth and not at survival year.

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Data Gaps

Gaps in internationally-comparable entrepreneurship data were identified in a variety of ways at the Workshop. Individual Presentations, such as that by Anders Hoffmann of Denmark on “A General Policy Framework for Entrepreneurship”, set out lists of specific indicators and assessed the quality of currently-available data. Other presentations highlighted interesting data developments in individual countries, such as the Kauffman Firm Survey in the United States, and suggested the possible extension of such initiatives in other countries. Finally, through the Workshop discussions, participants drew attention to numerous specific data gaps.

· Linked data on entrepreneurs and firm performance;

· Data on employee-firms to be distinguished from self-employment;

· Identification, and characteristics, of growth firms and their entrepreneurs;

· Entrepreneurial activities in established firms;

· Entrepreneurial spin-offs in existing firms;

· Financing for entrepreneurship, including venture capital;

· Panel data tracking survival/non-survival/change over time;

· Family business and entrepreneurship;

· Women’s entrepreneurship and minority entrepreneurship;

· Regional and/or local data; and,

· Social entrepreneurship;

Standard Definitions

Research has dedicated almost three centuries to the attempt to define the concept of entrepreneurship. A wide range of definitions has been produced, spanning various disciplines such as psychology (Shaver & Scott, 1991), sociology (Reynolds, 1991, Thorton, 1999), economics (Kirchhoff, 1991) and management (Stevenson, 1985).

All these conceptualisations aim to understand the relationship between economic growth and entrepreneurship, yet none is considered to be the commonly accepted definition that could facilitate the way in which entrepreneurship data are collected. Discrepancies in the definitions have to do with the nature of the subject itself. Being a multifaceted concept, entrepreneurship can be hardly locked up into a single definition. As the slide below (FORA, 2004) demonstrates, entrepreneurship is so difficult to define because it is not an “event” per say, but a process that can be measured at several stages. There is also disagreement over whether or not entrepreneurship should be defined in terms of the firm, or in terms of the entrepreneur, or whether it is the newness of the firm, the size of the firm or whether or not the firm or entrepreneur is innovative that is the defining factor. As evidence to the extent to which the experts differ in their interpretation of the term, in his concluding remarks at the Workshop, David Storey identified eleven different concepts of entrepreneurship that were mentioned in the discussions. Therefore, depending on the context in which entrepreneurship is observed, the definition can vary considerably and lead to different measurements.

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Paul Reynolds, of the Pino Global Entrepreneurship Center at Florida International University, agrees that entrepreneurship as a concept as it is commonly used is too amorphous and multi-dimensional that it is useless to researchers. He defines entrepreneurship as people starting new businesses, and although it may not satisfy everyone’s idea of the term, it is broad enough to encompass virtually every concept of an entrepreneurial activity related to new business. The study done by the International Consortium defined entrepreneurship as both the entry and exit of firms and the creation of high growth firms. Other researchers such as Paul Westhead of Nottingham Business School, sees entrepreneurship not simply as the creation of new ventures, but as imagination, creativity, innovativeness, calculated risk taking, opportunity recognition, pursuit and exploitation. There was much debate at the workshop as to whether or not self-employment constitutes entrepreneurship, whether or not to consider new ventures created from larger, older organisations, or whether only to consider independent owner-managed businesses solely with employees.

Although a single definition of entrepreneurship across OECD countries may not be feasible, agreeing on the type, or types, of entrepreneurship one wants to measure is necessary. The Workshop called on the OECD to develop standard measures that could be applied by both OECD and non-OECD countries, as the Organisation has done, for example, for e-commerce and other ICT measurements.

Approaches to Developing Data

A number of options for developing entrepreneurship data were discussed. These ranged from compilations of existing data, with little value added, to development of an ideal entrepreneurship indicator framework coupled with a standardised international survey (administered within individual countries but co-ordinated centrally with results compiled, compared and published by the OECD.

As a first initiative, the possibility of a Compendium of data used by different countries to understand and analyse entrepreneurship was suggested. Since such data sets are often unique to individual countries, little in the way of cross-country comparisons could be carried out, but the compendium would be useful for illustrating different approaches to understanding entrepreneurship. This would help to identify the

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most appropriate components of possible international entrepreneurship indicators framework and, where similar measures do exist in several countries, the potential for harmonisation could be explored. The OECD has numerous examples of simple, Compendia of measures that could serve as models here. Also, work by FORA and the International Consortium on Entrepreneurship Benchmarking has already pulled together some relevant data and collaboration would be possible.

The preparation of such a Compendium would require co-operation by officials in member countries who would have to provide the data and metadata inputs to the OECD. While such an activity seems simple and straightforward, some participants reminded the Workshop that every effort must be made to justify, simplify and minimise the burden of reporting to organisations such as the OECD. A Workshop presentation by Canada was useful in this regard.

Despite the value of a simple Compendium in the short term, most participants were anxious to go beyond the compilation of existing, non-comparable data. A presentation by Steve Vale, on secondment from the ONS to the OECD, on the comparability of data on business entry and exit, through Business Registers, illustrated the significant inconsistencies that exist across OECD countries. Progress has been made within the European Community but much work remains if European and non-European data are to be compared. Indeed, even within countries, the use of different approaches to data outputs means that multiple, inconsistent measures may exist even based on the same register data. Given the fact that definitions and registration procedures are difficult to change, it was recognised that harmonisation of register-based data must be a long-term activity. Nonetheless, there was considerable support for ongoing work by the OECD to exploit register-based business dynamics data for study of entrepreneurship.

A clear advantage of survey data, especially when surveys are developed anew, is that relevancy and consistency can be built in through standardised definitions and measurement approaches. The GEM and Panel Survey of Entrepreneurial Dynamics (PSED) programs were offered as examples here. Many agreed that it would be most advantageous to tie high quality register data to consistent survey data for maximum value. The ability to link across data sets is also highly desirable.

As an important initial step in establishing survey programs it was recommended that, in consultation with member countries, the OECD develop an overall framework of entrepreneurship data including a listing all the data elements to be assembled in an ideal world. Such a framework would also include standard definitions and measurement approaches. Given an agreed-to framework, different approaches to developing data could be considered.

One approach would be to conduct a standardised international entrepreneurship survey, similar to the way the OECD-led PISA education survey is conducted. This would ensure that all data elements were collected in all participating countries at the same time via the same methodologies. The survey would be administered within individual countries but co-ordinated centrally with strong, objective quality standards. Results would be compiled, compared and published on a co-ordinated basis. Through a governance structure, participating countries would decide on specific data priorities for each cycle of the survey. Such a programme would be expensive, though much of the development cost would be spread over a number of countries; costs would be much less than having each country develop a programme on its own. There were numerous advantages cited for this approach but it was recognised that it might be too expensive for many countries to do take on the complete survey each cycle. Furthermore, given the different state of development of different economies, achieving agreement on data priorities could be challenging. Some measures would be more useful for developing countries while others would be appropriate for shaping policies in developed countries. Thus modular approaches were also suggested.

Once an agreed –to framework for entrepreneurship data is established, work could proceed on several fronts simultaneously. Since some interesting g data developments are already underway in some

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countries, the OECD could explore commonalities and encourage other countries to use the same approaches. For example, Eurostat is already conducting a survey on Factors of Business Success. The Kauffman Foundation in the USA is also conducting a firm survey that covers many of the same determinants of entrepreneurial success. Since other countries have expressed interest in similar information on determinants of success, it would be useful to ensure that a common set of definitions and questions is available, based as much as possible on the work already underway.

Another approach would be to have a number of interested countries agree on a few specific, short-term priority data topics and to jointly develop, in co-operation with the OECD Entrepreneurship Indicators Project, a pilot survey to be tested in one or two countries. The results would be used to inform policy analysts throughout the OECD in order to gauge interest in broader application of the survey. At the Workshop, several countries expressed interest in participating in such a pilot survey.

Engaging Countries and Other Stakeholders

The Workshop strongly endorsed a role for the OECD in developing standardised, international data on entrepreneurship as well as its determinants and outcomes. Most participants expressed interest in continuing the work to engage policy analysts and policy makers throughout the OECD in order to strengthen support for entrepreneurship data development. In this regard, there was support for a broader Conference the work of the Entrepreneurship Indicators Project in 2006 in order to demonstrate the relevance of entrepreneurship data.

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ANNEX 1: EIP TIMETABLE

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ANNEX 2: EXPERT WORKSHOP AGENDA

Wednesday 26 October 2005 Room 7

9:00-9:30

Opening Session

Welcome by Herwig Schlögl , Deputy Secretary-General Herwig Schlögl - OECD

Sergio Arzeni, Director, Centre for Entrepreneurship, SMEs and Local Development (CFE)- OECD

Tim Davis, Project Manager, OECD Entrepreneurship Indicators Project, Statistics Directorate- OECD

9:30-10:30

SESSION 1

Entrepreneurship: What’s the Big Deal?

This session looks at the importance of entrepreneurship in today’s economies and why it is necessary to understand its various dimensions in terms of the policies that influence it.

Zoltan Acs, Professor, School of Public Policy, George Mason University and The Kauffman Foundation - USA

Discussant : David Storey, Associate Dean, Research & Director of Enterprise Group, Centre for Small and Medium Sized Enterprises, Warwick Business School – UK

10:30-11:00 Coffee Break

11:00-12:00

SESSION 2

Policy Making for Entrepreneurship: Who? What? Where? When? Why? and How?

This session will seek to answer the question – what kind of policy needs to be in place regarding entrepreneurship? What kind of policy already exists in certain countries and how is it affecting the level and kinds of entrepreneurship?

Roy Thurik, Professor of Economics and Entrepreneurship, Erasmus University Rotterdam, EIM Business and Policy Research- The Netherlands

Discussant: Edmund Phelps, McVickar Professor of Political Economy, Columbia University- USA

12:00-13:00

SESSION 3

Policy Making for Entrepreneurship: What’s Missing?

This session will examine the existing data gaps and policy needs in terms of what is measurable through an international statistical survey.

Anders Lundström, President, Swedish Foundation for Small Business Research (FSF)- Sweden

Anders Hoffmann, Creative Director, FORA, Danish Ministry of Economic and Business Affairs- Denmark

Discussant : Alistair Nolan, Education Directorate, , Indicators and Analysis Division- OECD

13:00-14:30 Lunch

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14:30-16:30

SESSION 4

Policy Making for Entrepreneurship: What do we already know?

The collection of entrepreneurship data on the international level is not a new concept. GEM, the World Bank and Eurostat, to name a few, have all made significant contributions to our understanding of entrepreneurship. Nevertheless, many feel that data gaps and comparability issues still exist. This Session will review a number of other data initiatives so that those data gaps can be put into proper context.

Steven Vale, UK Office of National Statistics and Structural Business Statistics, on secondment to Statistics Directorate- OECD

Morvarid Bagherzadeh, Structural Business Statistics, Statistics Directorate, OECD

Zoltan Acs, Professor, School of Public Policy, George Mason University and The Kauffman Foundation- USA

André Letowski, Agence pour la création des entreprises (APCE)- France

Peter Boegh Nielsen, Internal Market and Services Directorate-General- European Commission / Hartmut Schroer, EUROSTAT

Paul Reynolds, Director of the Entrepreneurship Research Institute, Pino Global Entrepreneurship Center, Florida International University- USA

Discussant: Michela Gamba, Entrepreneurship Indicators Project, Statistics Directorate- OECD

16:30-17:00 Coffee Break

17:00-18:00

SESSION 5

Wrap up and Conclusions

Stefano Scarpetta, Labor market advisor and lead economist, Human Development Network- World Bank

Thursday 27 October 2005 Room 10

9:00-10:30

SESSION 1

A General Policy Framework for Entrepreneurship

FORA (Denmark) has elaborated a General Policy Framework for Entrepreneurship to serve as a model for the collection of indicators which can then, in turn, be used to create systematic evaluations and internationally comparable benchmarks of entrepreneurship policies. This session will be used to present the framework and discuss its suitability for application to OECD countries.

Anders Hoffmann, Creative Director, FORA, Danish Ministry of Economic and Business Affairs- Denmark

Discussant: Paul Westhead, Professor of Entrepreneurship, Nottingham Business School- UK

10:30-11:00 Coffee Break

11:00-12:30 SESSION 2

Country Experiences

This session will look entrepreneurship policy issues and priorities from a national perspective, using Canada, the Netherlands and the USA as models.

Denny Dennis, Senior Researcher of the National Federation of Independent Business- NFIB, U.S.A.

Luuk Klomp, Erasmus University Rotterdam (EUR), Erasmus Research Institute of Management (ERIM)- The

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Netherlands

Chris Parsley, Small Business Policy Branch, Industry Canada

Discussant: Jonathan Potter, Local Economic and Employment Development Programme, Centre for Entrepreneurship- OECD

12:30-14:00 Lunch

14:00-15:30

SESSION 3

International Data Collection Considerations: Roundtable

This session will examine tools for collection of international entrepreneurship data. The opening presentation will compare household surveys and registers as alternatives for tracking firm births. The roundtable will explore different survey approaches and compare scope, survey methods, costs and applicability for the collection of different entrepreneurship indicators on an internationally-comparable basis.

Opening speaker: Paul Reynolds, Director of the Entrepreneurship Research Institute, Pino Global Entrepreneurship Center, Florida International University- USA

Roundtable

Chairperson: Anders Hoffmann, Creative Director, FORA, Danish Ministry of Economic and Business Affairs- Denmark

Andy Cosh, Assistant Director, Centre for Business Research, University of Cambridge- UK

Alistair Nolan, Education Directorate, Indicators and Analysis Division- OECD

Terry Evers, Director of the Small Business and Special Surveys Division (SBSSD), Business and Trade Statistics Field, Statistics Canada

15:30-16:30

SESSION 4

Wrap Up and Conclusions

Discussion led by: David Storey, Associate Dean, Research & Director of Enterprise Group, Centre for Small and Medium Sized Enterprises, Warwick Business School - UK

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