U.S. Twice as Entrepreneurial as Europe
The U.S. entrepreneurial level, 13.8 percent, is about twice that of the EU-countries. And China is basically on par with the U.S. according to the new report “The entrepreneurial code – A Comparative Study of Entrepreneurial Dynamics in China, Europe and the U.S.” from Swedish Entrepreneurship Forum. The report is based on data from the Global Entrepreneurship Monitor. The authors emphasize three policy areas; regulations, supply of skills and access to capital as areas of particular importance for early-stage entrepreneurship.
The Entrepreneurial Code examines the similarities and differences between the dominating economic regions in terms of level of entrepreneurial activity and attitudes towards entrepreneurship as well as entrepreneurs’ ambition to grew, internationalize and to innovate.
The U.S. has the highest entrepreneurial level and also dominates the earliest stage of entrepreneurship – nascent entrepreneurship – with 9.7 percent of the adult population involved in setting up a business in 2014. The UK ranks second (6.3%), while Sweden (4.9%), a traditional welfare state, is in fourth place, just after China (5.4%).
- The U.S. outperform most European countries in practically all entrepreneurial dimensions, e.g. early stage and women entrepreneurship, but also in terms of growth ambitions, says Pontus Braunerhjelm, Professor at KTH Royal Institute of Technology and Research Director at Swedish Entrepreneurship Forum.
- The U.S. firms are however somewhat weaker with regard to intrapreneurship, suggesting that policy and cultures are critically important in determining how entrepreneurship is materialized within countries. There seems to be much that Europe can learn from the U.S. when it comes to entrepreneurial endeavor, according to Pontus Braunerhjelm.
The authors emphasize three policy areas that are of particular importance for early-stage entrepreneurship;
- First, the effects of regulations on entrepreneurship. There is a significant and negative relationship between regulatory burdens and start-ups.
- Second, the supply of skills - a key condition for entrepreneurs to grow and maintain their innovative capacities. In addition to impacting the levels of entrepreneurship, the supply of skills influences the types of entrepreneurs present in an economy.
- A third important component in promoting entrepreneurship-driven dynamics and economic growth concerns access to capital. Business angels and entrepreneurship are clearly positively associated.
If the political aim is to enter a path on which entrepreneurship, innovation and continuous market experimentation pave the way for a sustainable future growth, the authors suggests that policymakers focus their efforts on the areas above.
About GEM: The GEM survey of 2014 covers 73 countries and 206,000 individuals in the age group of 18–64 years. Participating countries account for approximately 90 percent of world GDP and more than 72 percent of the world population. It is undoubtedly the largest study of entrepreneurs’ activity and ambitions and of societal attitudes towards entrepreneurship and that is conducted.
Sweden’s GEM team 2014 consisted of Pontus Braunerhjelm, Professor at KTH Royal Institute of Technology and Research Director at Swedish Entrepreneurship Forum, Carin Holmquist, Professor Stockholm School of Economics, Johan P. Larsson, PhD Jönköping International Business School and Swedish Entrepreneurship Forum, Per Thulin, PhD Royal Institute of Technology and Swedish Entrepreneurship Forum and Lisa Silver, Project Manager Swedish Entrepreneurship Forum.
The entrepreneurial code – A Comparative Study of Entrepreneurial Dynamics in China, Europe and the U.S. is available for download.
For interviews, contact Pontus Braunerhjelm, Professor at KTH Royal Institute of Technology and Research Director at Swedish Entrepreneurship Forum, +46 72 965 55 69.
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