A Framework for
Addressing and
Measuring
Entrepreneurship
Anders Hoffmann, Ph.D.
Creative Director, FORA
Nadim Ahmad
Head of Business Statistics, OECD
The definition
> Entrepreneurs are 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 is 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.
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Important points
> Distinction between Entrepreneurs and
Entrepreneurial Activity
> Entrepreneurship is not linked to size
> Failure is a very important part – so seeking is the
key word
> Entrepreneurs create value
Copyright 2007 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk
Framework
Determinants
Entrepreneurial
Performance
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Impacts
Framework
Fly on the wings
of love
Determinants
Fly me to
We are currently
cruising at 300 mph the moon
Entrepreneurial
Performance
Copyright 2007 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk
Impacts
Framework
Determinants
Entrepreneurial
Performance
Impact
Job creation
Economic growth
Poverty reduction
Copyright 2007 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk
Framework
Entrepreneurial
Performance
Firms
Employer firm birth rate*
Employer firm death rate*
Business churn
Net business population growth
Survival rate 3 years
Survival rate 5 years
Proportion 3 years survival
Proportion 5 years survival
Employment
Rate of high-growth firms
concerning employment*
Rate of employment Gazelles*
Employment rate 3 year old firms
Employment rate 5 year old firms
Average firm size after 3 years
Average firm size after 5 years
Self employment (start-ups)
Self employment
% adults starting firms
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Monetary returns
Rate of high-growth firms
concerning turnover/profits*
Rate of turnover/profit Gazelles*
Value-added young firms
Productivity contribution
Productivity growth contribution
Note
> Not all new firms are entrepreneurs (definition of
value determines how many)
> Number of high-growth firms does not capture all
entrepreneurs
Copyright 2007 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk
Regulatory
framework
skilled people
opportunities
Culture
resources
Copyright 2007 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk
Framework
Determinants
Access
to finance
R&D and
technology
Entrepre
neurial
capabilities
Market
conditions
Regulatory
framework
Entrepreneurial
Performance
Impact
Firms
Job creation
Employment
Economic growth
Culture
Monetary returns
Copyright 2007 © FORA, Langelinie Allé 17, 2100 Kbh Ø - www.foranet.dk
Poverty reduction
Entrepren
Perform
Determinants
Access
to finance
R&D and
technology
Entrepre
neurial
capabilities
Access to debt
financing
R&D investment
Training and
experience of
entrepreneurs
Business
angels
University
/ industry
interface
Access to VC
Technological
cooperation
between firms
Access to other
Types of
Equity
Technology
diffusion
Stock markets
Broadband
access
Patent system,
standards
Market
conditions
Anti-trust
laws
Competition
Business and
Entrepreneurship
Education (skills)
Access to the
domestic market
Regulatory
framework
Culture
Administrative
burdens for entry
Risk attitude
in societies
Administrative
burdens for
growth
Attitudes
towards
entrepreneurs
Bankruptcy
regulation
Entrepreneurship
infrastructure
Access to
foreign
markets
Immigration
Degree of
public
involvement
Court-legal
framework
Public procurement
Labour
market
regulation
Safety, health,
Environment
and product
regulation
Social and health
security
Income taxes
Business taxes
Capital taxes
Wealth and
bequest taxes
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Desire for
business
ownership
Entrepreneurship
Education
(mindset)
Firms
Employm
Monetary r
Way forward
> Performance is well on its way – ley us get some
data out!
> Determinants still need a lot of work – our focus for
next year?
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