Global Entrepreneurship Monitor

1
14 December 2007
Global Entrepreneurship Monitor Scotland 2006
Jonathan Levie Hunter Centre for
Entrepreneurship University of Strathclyde
2
Early-stage Entrepreneurial ActivityHow
Scotland Compares
Ireland
Scotland
United Kingdom
United States
2005 TEA scores for 42 sovereign nations
Scotland
3
TEA rates in Scotland benchmark countries
4
Have you ever taken part in business or
enterprise training at school?
Source GEM UK and Scotland 2004, 2005 and 2006
Surveys
5
In the UK, would most people consider starting a
new business a desirable career choice?
Source GEM UK and Scotland 2004, 2005 and 2006
Surveys
6
In the next 6 months will there be good
opportunities for starting a business in the area
where you live?
Source GEM UK and Scotland 2004, 2005 and 2006
Surveys
7
Would fear of failure prevent you from starting a
business?
Source GEM UK and Scotland 2004, 2005 and 2006
Surveys
8
Do you have the knowledge, skill and experience
required to start a new business?
Source GEM UK and Scotland 2004, 2005 and 2006
Surveys
9
How many businesses fail in their first year? UK
public estimates
Source Allinson, Braidford, Houston Stone, 2005
10
of new VAT-registered businesses still
registered after one year and three years
Source BERR
11
Most important reason for closing my business
(excludes businesses that were sold)
Source GEMUK 2006 survey
12
of those who closed a business in the last
yearwho are currently starting or running a
business
Entrepreneurial recycling is healthy in Scotland
Scotland does not have a business failure
problem or a business closure problem
13
What if we shattered the business failure rate
myth?

• 11 of 18-64 years old Scots are thinkers and 2
  are actively trying to start (nascent
  entrepreneurs)
• Fear of failure is a barrier to start-up for 42
  of thinkers but only 18 of nascents
• 55 of thinkers who fear failure feel much more
  positive about their business prospects when told
  the true business failure rate (Allinson et al.,
  2005)
• Combining these findings, if all thinkers knew
  how small the business failure rate is, we could
  increase the number of nascents by 25

14
Implications for Policy

• Fear of failure is holding the start-up process
  back, and affecting the next generation of
  entrepreneurs.
• Our bankruptcy laws now provide the swiftest
  discharge time in Europe.
• But few entrepreneurs go bankrupt anyway.
• Now what?
• A concerted public education campaign, aimed at
  thinkers, the media and the new business support
  industry, to shatter the business failure rate
  myth