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Global Entrepreneurship

I am currently sitting in Babson College in the USA at the launch of the ninth annual Global Entrepreneurship Monitor (GEM) 2007 Global Report.

GEM is an annual assessment of the national level of entrepreneurial activity and explores the role of entrepreneurship in national economic growth and the characteristics associated with new business creation.

Over 150,000 individuals were interviewed across 42 countries as part of the research project.

In Wales, the GEM study is undertaken by the National Entrepreneurship Observatory, a joint project between Cardiff University and the University of Glamorgan with a separate annual report produced for the rate of entrepreneurial activity in North Wales.

In 2007, the GEM study shows that the highest levels of entrepreneurial activity are to be found amongst middle and low-income countries in Latin America and Asia.

For example, nearly half of the adult population in Thailand were involved in some sort of entrepreneurial activity with high rates also found for Peru, Columbia, Venezuela and China.

In contrast, the countries with the lowest level of entrepreneurial activity were Russia, Belgium and France. In the UK, one in ten adults were involved in entrepreneurial activity, with approximately half of these starting or managing a new business.

Other key findings from this year’s study are:

- New businesses are started by young people (aged 25-34)

- Men are more likely to start a business than women and this gender gap is present among all age groups

- The more burdensome a country’s new business regulations, the lower the ambition for growth among a country’s entrepreneurs

-Media attention and other positive signals from society, such as entrepreneurship being considered as a good career choice or receiving high status is positively linked to enterprise activity

- Only three per cent of new businesses are expecting to create more than 50 or more jobs with 30 per cent of start-ups not expecting to employ anyone at all

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

I have been priveleged to be involved in GEM since 2000 and continue to believe that it is an important piece of economic research, mainly because no other exists that can provide consistent cross-country information and measures of entrepreneurial activity in a global context.

This involvement has enabled Wales to benchmark itself against economies all over the World, as well as different UK and European regions.

For Welsh policymakers, probably the most important results from the 2007 global study is a confirmation that 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.

Therefore, a focus on developing higher levels of entrepreneurial skills amongst potential and existing businesspeople could lead to greater level of sustainable business creation.

Full details of the GEM Global Report can be found at http://www.gemconsortium.org/

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