250 million entrepreneurs and counting
A new study looks at entrepreneurship in 59 economies around the world. What do the findings mean?
How is entrepreneurship looking around the globe? The Global Entrepreneurship Monitor 2010 Report released yesterday estimates that 250 million people between 18-64 years old are actively engaged in starting or running new businesses in 59 economies around the globe.Skip to next paragraph
Jeff is the Jack C. Massey Chair in Entrepreneurship and Director of the Center for Entrepreneurship at Belmont University in Nashville, Tenn.
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The report states that an estimated 63 million of these early-stage entrepreneurs expect to hire at least five employees over the next five years. 27 million anticipate hiring twenty or more people in newly created jobs. The potential contribution of entrepreneurship in job creation across the globe is critical, as it has been entrepreneurs who have led us out of almost every past recession.
In 2010 GEM surveyed more than 175,000 people and over 3,000 national experts in 59 economies around the world. The report covers over 52% of the world's population and 84% of the world's GDP. This research is accomplished through an international network of national academic research teams, with global sponsorship by Babson College, USA and Universidad del Desarrollo, Chile.
I have to add that the study authors do offer some conclusions from their data that are concerning to me.
"Policy makers need to look beyond simply the number of active entrepreneurs. They need to understand the contribution these individuals make to economic growth and national competitiveness. Are these entrepreneurs creating jobs? Are they building innovative, global companies? These are the important questions to ask," states Professor Donna Kelly, one of the report authors.
The implication of this is that government policy makers know best what markets are worth pursuing, rather than entrepreneurs and their customers. Planned economies never work.
"Governments must encourage those with great ideas to pursue the opportunities they perceive. In so doing, entrepreneurs and governments build a foundation for future jobs," notes Ignacio de la Vega, chair of the GEM oversight board.
Not sure why governments feel that they need to be the ones to encourage entrepreneurs. Most surveys show that entrepreneurs simply want government to get out of their way.
The authors stress the importance of societal and cultural support for entrepreneurship. On this we can all agree. History shows that important steps to foster this type of support include: celebrating entrepreneurial success, rather than demonizing wealth creation; protecting property rights of the individual, rather than shifting property control to the state; and, creating tax systems with the single goal of funding the government, rather than redistributing wealth.
You can find the full report here.
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