SBE Lect 5_ Part 2: ch7 Global entrepreneurship Monitor (NL vs. World…
SBE Lect 5_ Part 2: ch7 Global entrepreneurship Monitor
2. What actually triggers individuals to go
about starting a business?
Individual level factors
◦ What about the social embeddedness of entrepreneurship? see next part of the mind map
Book mainly concerned with “Are nascents distinguishable from general population?”
◦ Nascent are more similar to actual entrepreneurs than to the general population
Therefore, economists lost interest in identifying nascents and rather focus on actual starters
The usual socio-demographic differences (Lecture 7), but in particular:
Fear of failure (-)
Knowing other entrepreneurs (+)
Confidence in own skills to run a business (+)
Opportunity perception (+)
Are “nascents” economically relevant?
In countries in which “intentions” are high, “nascent entrepreneurship” also high
Part of differences in TEA rates is explained by attitudes rather than actions
In some countries more socially acceptable to say you are nascent
There are certainly “dreamers” among the nascents: Some with intentions will never start
Still, many do transition from nascent entrepreneurship to young business ownership
◦ Can we identify those?
Quite many start (or take over a business) without having the intention to start for a long period of time
Should you worry as economist that so many nascents “fail”?
Only if this hampers productive entrepreneurship (“juridical reasons” / “rules of the game”)
Whether people transition to young business ownership is explained by their interest (utility)
slide 6/26 failing and remaining nascent
see comments in L5 short
NL vs. World
Nascents ~59% of TEA
◦ Overall, all statistics lower in NL (Note: High % Necessity entrepreneurship in low- income countries)
“Intentions” = 23.42% is expecting to start a new business in the next three years
“New businesses” = 5.84% owns & manages a business with income < 3.5 years
◦ Remember, this is the stock of 3.5 years!
“Nascents” = 7.58% says to be active as nascent entrepreneur in past year