Abstract
There are at least 200 million people around the world involved in business creation. Another 200 million are owners or managers of new firms less than a few years old. These estimates were developed by the Global Entrepreneur Monitor (GEM) research program that covered 75 countries, about 80% of the world population. The true global total of people involved in the start-up process is probably higher, close to a quarter of a billion individuals, with another quarter of a billion involved as owners and managers of new firms.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
See Reynolds et al. (2005) for an overview of the procedure used to develop the estimates. Data are from Reynolds and Hechavarria (2009) and the project website, “www.gemconsortium.org.” As these estimates are based only on those 18–64 years of age in each country, the estimates omit the efforts of those under 18 or over 65 years of age and are, therefore, slightly conservative.
- 2.
- 3.
- 4.
Establishments are single locations of economic activity; firms are coordinated efforts to achieve a common purpose. A single firm may involve coordination of one or more establishments.
- 5.
- 6.
Acs and Armington (2004).
- 7.
Schreyer (1996).
- 8.
Estimates based on the Global Entrepreneurship Monitor surveys finds that some countries recently experiencing high growth (Hong Kong, Singapore, and Taiwan) have relatively low levels of participation in business creation (Reynolds et al. 2004).
- 9.
Most of the systematic research has attempted to utilize existing data sets. Studies of entrepreneurship have utilized data sets reflecting reports of self-employment (or plans to pursue self-employment), small businesses, firms in high technology or innovative sectors, or new entries in business registries. In several cases the indicators are unlikely to capture much about anything new or innovative. For example, most self-employed or small business owners have actually been in that situation for some time – most small ventures are old small ventures. The majority of firms in sectors considered high technology or innovative are actually doing rather prosaic things, acting as suppliers or subcontractors to the small proportion creating or utilizing advanced technology. The other option, new entries in business registries, are more closely related to the idea of entrepreneurship as business creation, but again the majority of the new ventures appear to be replicating existing business activity.
- 10.
For a recent overview see Van Praag and Versloot (2007), job growth contributions presented in Acs and Armington (2004) and Schreyer (1996), contributions in productivity in Foster et al. (2002, 2005); contributions to market innovation in Baumol (2005), and association with economic growth in Wennekers and Thurik (1999) and Audretsch et al. (2006).
- 11.
This might be the number of new firms registered in a year per 100 firms registered at the beginning of the year or the annual number of new registrations per 1,000 employed adults or 1,000 persons 18–64 years old.
- 12.
See Gartner et al. (2004) for an extensive overview of the theoretical issues that were the basis for the first US project (US-PSED I).
- 13.
The GEM research design is summarized in Reynolds et al. (2005); much of the data and most of the hundreds of global and national reports are available on the project website, “www.gemconsortium.org.”
- 14.
Sources of data summarized in footnote 1; based on consolidating date for all years where available from 2000 to 2009, some countries have data for less than 10 years.
- 15.
The prevalence rate is sensitive to the age range of the base. The US panel studies us a base of 18–74 years, which reduces the prevalence slightly to 6 per 100 individuals, reflecting the low involvement of those 65–74 years of age.
- 16.
A comparison across 66 GEM countries finds no relationship between a measure of economic development, GDP per capita adjusted for purchasing power parity, or the size of the sample and the ratio of new firms to nascent enterprises.
- 17.
Perhaps the largest group was members of the Entrepreneurial Research Consortium (ERC) that pooled funds and talent to implement US-PSED I, over 34 member units from 6 countries represented 120 scholars (Gartner et al. 2004).
- 18.
The first projects were completed in Wisconsin (Reynolds and White 1997); followed by a national pretest by adding a module to the monthly University of Michigan Survey of Consumer Attitudes in October–November of 1993. These preliminary studies are not included in this volume.
- 19.
The Australian project is called the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) and this label is used for reference. All other projects start with a two letter abbreviation of their country name.
- 20.
For those that cannot remember the month, a useful estimate can be based on a response to the season – winter, spring, summer or fall.
- 21.
When these data sets are placed in the public domain, as with the US-PSED I and US-PSED II, hundreds of analyses are developed and each one may utilize different criterion for the transitions; a recent bibliography is available on the project website, “www.psed.isr.umich.edu.”
- 22.
A small number of cases report three or more activities but never two within a 12-month period, they were considered to be relatively inactive and not retained in the analysis.
- 23.
An extensive bibliography is periodically updated and provided on the project website: “www.psed.isr.umich.edu.”
References
Acs ZJ, Armington C (2004) Employment growth and entrepreneurial activity in cities. Reg Stud 38(9):911–927
Audretsch DB, Keilbach MC, Lehmann EE (2006) Entrepreneurship and economic growth. Oxford University Press, New York
Baumol WJ (2005) Small firms: why market-driven innovation can’t get along without them. Chapter 8 in US Small Business Administration (2004). The small business economy: a report to the president. US Government Printing Office, Washington, DC, pp 183–206
Birch D (1981) Who creates jobs? Public Interest 6:3–14
Birch DA (1979) The job generation process. MIT Program on Neighborhood and Regional Change, Cambridge. Report prepared for the US Department of Commerce, Economic Development Administration
Chandler AD (1993) The visible hand: the managerial revolution in American business. Harvard University Press, Cambridge
Davidsson P, Reynolds PD (2009) PSED II and the Comprehensive Australian Study of Entrepreneurial Emergence [CAUSEE]. Chapter 13 in Paul D. Reynolds and Richard T. Curtin (Eds). New Firm Creation in the U.S.: Initial Explorations with the PSED II Data Set. New York: Springer, pgs 263–278
Foster L, Haltiwanger J, Krizan CJ (2002) The link between aggregate and micro productivity growth: evidence from retail trade. NBER Working Paper Series #9120. National Bureau of Economic Research, Cambridge
Foster L, Haltiwanger J, Syverson C (2005) Reallocation, firm turnover, and efficiency: selection on productivity or profitability? (NBER Working Paper Series #11555). National Bureau of Economic Research, Cambridge
Gartner WB, Shaver KG, Carter NM, Reynolds PD (eds) (2004) Handbook of entrepreneurial dynamics: the process of business creation. Sage, Thousand Oaks
Ichbiah D, Knepper SL (1991) The making of Microsoft. Prima Publishing, Rocklin
Kirzner IM (1979) Perception, opportunity, and profit: studies in the theory of entrepreneurship. University of Chicago Press, Chicago
Knight FH (1921) Risk, uncertainty, and profit. A. M. Kelly, New York, 1964 reprint
Reynolds PD (2000) National panel study of US business startups: background and methodology. In: Katz JA (ed) Advances in entrepreneurship, firm emergence and growth, vol 4. JAI Press, Stamford, pp 153–228
Reynolds PD, White SB (1997) The entrepreneurial process: economic growth, women, and minorities. Greenwood, Westport
Reynolds PD, Bygrave WD, Autio E, others (2004) Global entrepreneurship monitor: 2003 summary report. Babson College, Babson Park
Reynolds P, Bosma N, Autio E, Hunt S, De Bono N, Servais I, Lopez-Garcia P, Chin N (2005) Global entrepreneurship monitor: data collection design and implementation: 1998–2003. Small Bus Econ 24:205–231
Reynolds PD (2008) Screening Item Effects in Estimating the Prevalence of Nascent Entrepreneurs. Small Business Economics 33(2):151–163
Reynolds PD, Hechavarria D (2009) Global entrepreneurship monitor (GEM): adult population survey data set, 1998–2003 [Computer file]. ICPSR20320-v2. Inter-University Consortium for Political and Social Research, Ann Arbor, 2009-05-13
Say J-B (1816) A treatise on political economy. A. M. Kelley, New York, 1964 reprint
Schreyer P (1996). SMEs and employment creation: overview of selected quantitative studies in OECD member countries. Organization for Economic Co-operation and Development, Paris, STI Working Papers 1996/4
Schumpeter JA (1934) The theory of economic development. Harvard University Press, Cambridge
Van Praag CM, Versloot PH (2007) What is the value of entrepreneurship? A review of recent research. Institute for the Study of Labor (IZA), Bonn, Discussion Paper No. 3014
Vance SS, Scott RV (1994) Wal-Mart: a history of Sam Walton’s retail phenomenon. Twayne, New York
Wennekers S, Thurik R (1999) Linking entrepreneurship and economic growth. Small Bus Econ 13:27–55
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2011 Springer New York
About this chapter
Cite this chapter
Reynolds, P.D., Curtin, R.T. (2011). Introduction. In: Reynolds, P., Curtin, R. (eds) New Business Creation. International Studies in Entrepreneurship, vol 27. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-7536-2_1
Download citation
DOI: https://doi.org/10.1007/978-1-4419-7536-2_1
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4419-7535-5
Online ISBN: 978-1-4419-7536-2
eBook Packages: Business and EconomicsBusiness and Management (R0)