The Definitive Study of Entrepreneurship in 2005

The Global Entrepreneurship Monitor (GEM), directed by Babson College and London Business School, has just published their seventh annual report -- the largest annual measure of entrepreneurial activity worldwide, compiled by more than 150 scholars from 35 countries.

Key findings of the 2005 report:

• ‘Innovative’ entrepreneurs drive economic growth. Middle income countries with higher levels of innovative entrepreneurship demonstrate higher growth rates of GDP per capita. Early-stage entrepreneurs claim more often to offer innovative products then established entrepreneurs. Still, findings show that innovation is relatively rare in all countries.
• Success is best among ‘opportunity-driven entrepreneurs’, who have lower failure rates among early-stage businesses. In general, countries with healthy and diversified labor markets or stronger safety nets in terms of social welfare provisions can be more selective in the kinds of businesses they choose to start….and have higher ratios of opportunity to necessity-driven motivation.
• All entrepreneurs believe they face strong competition, but established business owners (65%) perceive more competition in their marketplace than early-stage entrepreneurs (55%). Additionally, early-stage businesses in high-income countries feel they are more successful in finding market niches than their counterparts in the middle income cluster.

BOTTOMLINE: Excellent, detailed research here on early-stage and experienced entrepreneurs.