ANNOUNCEMENTS

Indicators of Entrepreneurial Growth: Datasets Governments Need to Measure Ecosystem Development

Jonathan Ortmans | July 01, 2016
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Governments around the world collect a great deal of data to track economic indicators such as gross domestic product, productivity, employment, income and wage growth, consumer prices, among others. Many now seek to measure and monitor entrepreneurship. Knowing what data to collect, what indicators to track, and what successful models currently exist is a challenge that GERN is seeking to address.

At the 2015 GERN Annual Meeting, GERN organized a discussion on the topic during which many questions emerged. What are the measurable and trackable determinants of entrepreneurship? What data sets currently exist? Are they standardized? How might new data sources be created?

The session led to follow up conversations among three GERN members, the United Nations, the Organization for Economic Cooperation and Development (OECD) and the Kauffman Foundation. They agreed to undertake a thorough and comprehensive examination in this area and offer guidance to policymakers seeking to promote new firm creation and growth.

The three are preparing a three-part white paper that will report on the current state of the field, examine how the impact of entrepreneurship policy and programs can be measured, and then, tying parts one and two together, offer recommendations and guidance to policy makers who are establishing entrepreneurship datasets.

Fiorina Mugione of the United Nations Conference on Trade and Development (UNCTAD) is leading the overall initiative. The impetus, she explained during a GERN member conference call on June 15, 2016, is to ensure that the UN’s Global Sustainable Development Goals adequately incorporate entrepreneurship. “The OECD/Eurostat entrepreneurship indicators program now explores official statistics as key source of information about entrepreneurial performance – at least for member countries,” she said. “Our goal is to expand this to cover as many UN member nations as possible.”

Another goal the three GERN members have in mind, Ms. Mugione said, “is to increase the comparability of international datasets and measures, such as the Eurobarometer on entrepreneurship, the World Bank Doing Business report, among others.”

The effort began when the UNCTAD convened a group of experts who worked through the architecture needed to “build a conceptual framework that identifies the factors of high-growth entrepreneurship” and “formalizes a theoretical framework that identifies the economic and social impact that can realized from entrepreneurship.”

Mariarosa Lunati of the OECD is leading the first stage of the study. Their part of the whitepaper will provide a comprehensive review of existing sources of entrepreneurship data capturing new firm creation and growth in order to make it possible to benchmark ecosystems and evaluate how well policy is fostering entrepreneurship.

Amisha Miller of the Kauffman Foundation is leading second stage of the study on how to go about measuring the impact of entrepreneurship policy. “The first step,” she explained, “is defining what entrepreneurship policy is and is not, because it is possible to take a wide-ranging or a narrow approach.” The Kauffman team choose a narrow definition: “Policy designed to facilitate the creation and growth of new businesses,” which is altogether different from traditional SME or innovation focused policy.

The Kauffman part of the report will address the following key areas:

  • Tracking the implementation of an overarching entrepreneurship strategy to evaluate the quality of its programs and initiatives
  • The regulatory environment – that is, laws, taxes, incentives, etc.
  • Education and training
  • Innovation – the Kauffman team is looking at the spread of ideas, access to new technology, and how an innovative approach becomes translated into business and not traditional innovation policy, which is focused on research and development projects or university technology transfer.
  • Finance
  • Awareness and connectivity

Although the Kauffman team is still in the drafting stage, their examination of the evidence base revealed a number of key take-a-ways for policy makers and other researchers. First, it is critical to define entrepreneurship because without a frame, it can easily become unworkably broad. Second, entrepreneurship ecosystems are messy and evaluating their development requires a bottom-up approach that includes the perspective of entrepreneurs. Third, entrepreneurship is inherently a local phenomenon. While it occurs within a larger context, national strategy should focus on developing local hubs.

The world is awash with information in this age of big data. The difficulty is filtering out the irrelevant, capturing the meaningful, and organizing it so that it provides useful insight.  The three members aim to make a significant contribution in this area by helping governments understand what kinds of data they can and should be collecting to measure, monitor and evaluate entrepreneurship ecosystem development.

Jonathan Ortmans
Jonathan Ortmans serves as president of the Global Entrepreneurship Network (GEN), a year-round platform of global programs and initiatives created... About the Author
Peter Komives
Peter focuses on building the Global Entrepreneurship Network's capacity to impact entrepreneurship ecosystems around the world. For the Global Entrepreneurship...About the Author