North America Ranks First in High-Expectation Entrepreneurial Activity, Report Says

A new report from the Global Entrepreneurship Monitor (GEM) places North America at the top, in terms of participation in high-expectation entrepreneurial activity. The report looks at the prevalence of high-expectation activity internationally and analyzes bivariate relationships between high-expectation prevalence rates and entrepreneurial framework conditions.

High-expectation is used to emphasize the fact that the GEM operationalization is based on expected rather than realized job creation, the report states. Some of the key findings include:

• High-expectation entrepreneurial activity represents only a small proportion of all entrepreneurial activity, yet it explains the bulk of expected new jobs by cohorts of nascent entrepreneurs and baby businesses.
• The rate of high-expectation entrepreneurial activity varies significantly among world regions and individual countries. North America and Oceania have the highest adult population level participant rates, while the lowest participation rate is observed for European and highly developed Asian countries.
• High household income, high education levels, and opportunity motivation are most strongly associated with high-growth expectations.
• The relative prevalence of high-expectation activity appears to be positively associated with national entrepreneurial framework conditions.

The report also finds active policy has a role to play in promoting high-expectation entrepreneurial activity. Even though direct causal inferences are not possible from the analysis, the evidence of differential relationships with national conditions for different forms of activity suggest there is room for active entrepreneurship policy interventions, the report states. Additionally, governments should be aware of the importance of high-expectation entrepreneurial activity and consider introducing highly selective support measures and policies.

Findings are based on a sizeable dataset of more than 505,000 interviews in 44 countries over the years 2000-2004. Previously, GEM had not been able to analyze high-expectation entrepreneurial activity because of the scarcity of firsthand empirical data, according to the report. It is now possible to do so by combining several years of GEM's adult population survey, which calculates the total entrepreneurial activity rate for each participating country.

The GEM 2005 Report on High-Expectation Entrepreneurship is available at: http://www.gemconsortium.org/document.asp?id=444

Links to this paper and more than 3,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.