Fifteen years of Global Entrepreneurship Monitor

What is the Global Entrepreneurship Monitor?

Just last week the annual report of the Global Entrepreneurship Monitor (GEM) was launched in Chile. This unique international endeavour has collected, processed, and provided up-to-date information about entrepreneurial activity and it’s institutional conditions across the nations. This year marks the 15th anniversiary of the GEM.

GEM was initially conceived in 1997, and the first report was published in 1999. Finland was involved already at this point. The first report covered 10 countries, all of which were members of the OECD. GEM is now a truly global entity, as originally conceived, and in 2013 it covers approximately 75% population and 90% of world’s total GDP. Nowadays GEM encompassed 70 economies, and it has since the beginning involved more than 100 countries in total.

What exactly GEM tells us about entrepreneurship?

GEM generates relevant primary information on entrepreneurship, providing harmonized measures about the attitudes, activities and characteristics of adult individuals who participate in various phases of entrepreneurship. It also analyzes aspirations that these entrepreneurs hold for their businesses, along with other key features of their ventures. For instance, in 2013 more than 197,000 individuals have been surveyed and approximately 3,800 national experts on entrepreneurship participated in the study across 70 economies. Collectively this represents all global regions of the world and a broad range of economic development levels.

Finland as a part of the GEM

Finland has participated in the GEM since the beginning. A research team at Turku School of Economics lead by professor Anne Kovalainen has been taking care of the Finnish data collection and reporting the related results since 2004. Throughout the years the findings have enlightened researchers and policy-makers about the possible directions and outcomes of entrepreneurship in Finland. Thus, the national as well as global GEM results provide an important corner stone for assessing entrepreneurship, its role in a society, and guidelines how to enhance entrepreneurial activity in a country.

The uniqueness of the GEM data is embedded in the delicate and harmonized data collection. Moreover, there is no similar data available anywhere. In Finland we collect data at least 2,000 respondents aged 18-64-years (based on randomized sampling). Before the data is collected all of the related procedures have to be approved by the GEM’s Research Director. All of this is made in order to secure the high quality of data.

As an innovation-driven economy located in the Europe Finland’s peers are developed countries, and this is usually reflected in reporting the results. In addition to Finland, the country comparison enables a wider perspective for interpreting the results at hand.

What does the data say?

I will not provide you specific details about the latest data. The reason for this is the simple fact that the national report is currently under construction. Instead, I use the opportunity and highlight some of the issues Finland as an entrepreneurial society might be acknowledged around globe.

Positively, the entrepreneurial potential embedded in the Finnish adult population is one of the recurring outcomes. It is delightful to notice that the share of individuals, who perceived that they have the skills and opportunities required to start a business, is annually relatively high. For instance, almost half of the Finnish adults see that there are business opportunities around them. Similarly, the results highlight year after year that this share is higher than average among individuals with higher education. And that’s good news for institutions like universities.

The continuous downside is that the above mentioned entrepreneurial potential is not too often harnessed into actual startup behavior. Already at the stage of entrepreneurial intentions (the initial motivation to start or not to start a business) Finns are lacking behind of our peers in innovation-driven economies. This streak continues when the share of new entrepreneurs is under scrutiny. Among innovation-driven economies Finland is in the middle league at its best – Is and has been already during the last years. The level of performance is shown also in Finnish entrepreneurs’ aspirations. Their growth expectations are modest, and thus the prospect for generating new jobs on their side is slow. As challenging for the growth prospects is the lack of international orientation among Finnish entrepreneurs.

In a more general perspective our often findings suggest that Finland is a competitive and relatively business friendly economy among studied innovation-driven economies. In Finland the governmental policies and regulation are supportive for entrepreneurship, and there is lot of support provided for female entrepreneurs and high-growth firms.

In times like these, like the aftermath of economic turbulence, changes in the general well-being, and similar large transformations, the renewal of society and the economy is already occurring in a way the may erase/replace the old. This renewal does not necessarily show up solely in form of new businesses or entrepreneurial activities. As importantly, the renewal might be initiated by knowledgeable and skillful personnel in any organization who pursue for new business opportunities.

In all, societies seem to be better off if their population is embbedded with entrepreneurial attitude and skills. Thus, identifiying this provides a better understanding of the entrepreneurial capacity of an economy. While helping societies in this, the GEM has made it clear how entrepreneurship manifests itself in particular economies across the globe and that focusing on increasing the number of start-ups or self-employment is not the same as a focus on stimulating entrepreneurship. The research continues…