1 Global Entrepreneurship Monitor United Kingdom 2005 Rebecca Harding, David Brooksbank, Mark Hart, Dylan Jones-Evans, Jonathan Levie, Maureen O Reilly, Johanna Walker
2 3 Contents Foreword Entrepreneurs are the life-blood of the British economy. The health and vitality of the economy depends on many factors but it is the individual s ability to establish and expand businesses that is often the key driver. Identifying the full contribution entrepreneurs make to the economy has long been an issue. The latest Global Entrepreneurship Monitor (GEM UK) report from the London Business School brings some much needed clarity. The report asserts that this is no time to rest on our laurels. Without people who are prepared to take risks, to innovate, to develop new business ideas and to create real change in their workplaces, future economic growth would be in jeopardy. It is encouraging that GEM UK have identified that young people are key to propelling entrepreneurship forward. There are more people between the ages of 18 and 24 who are thinking of setting up a business over the next three years than any other age group. Exposure to entrepreneurial environments at school or at university can greatly increase the chances of an individual setting up a business later in life. It is important that we build on this base and increase our efforts to establish an entrepreneurial culture and innovation amongst young people in Britain. At Deloitte, we believe that talent is key to both our success and to the success of the wider economy. We work with the Prince s Trust to encourage young entrepreneurs and also provide opportunities for work placements for school students. The findings presented in this report strengthen that core belief of ours and we are delighted to have the opportunity to sponsor the GEM UK Report 2005 this year alongside the London Business School. John Connolly Senior Partner and Chief Executive Deloitte & Touche LLP PAGE SECTION SECTION 0.0 FOREWORD Acknowledgements SECTION 1.0 Entrepreneurship in 2005: overview SECTION 2.0 Entrepreneurial activity in the G7 countries SECTION 3.0 Geography of Entrepreneurship SECTION 4.0 Entrepreneurial people Acknowledgements A project of the size and scope of GEM UK is only ever possible because of the support of a wide range of stakeholders who help us, financially and in kind, to build the reputation and profile of the research. In particular we are eternally grateful as ever to our sponsors and their patient feedback throughout the year. Overall sponsorship this year came from Deloitte, and this was critical to maintaining the continuity and growth of the project. We would especially like to thank Joanne Mitchell from the Small Business Service, Richard Roberts from Barclays Bank, the Hunter Centre for Entrepreneurship at the University of Strathclyde, Invest Northern Ireland and the National Entrepreneurship Observatory of Wales and the Welsh Development Agency for their continued commitment to GEM UK. The role of critical friend that these people and agencies play is as important to keep GEM on the right track as their financial support. We continue to develop our regional analysis. Craig Bickerton of the East Midlands Development Agency, Alex McWhirter of Yorkshire Forward and Greg Ward of the South East Development Agency have helped us to address and focus on some of the important questions of regional policy. For the first time this year we have also been able to develop sub-regional analysis as well through the support of Blackburn with Darwen Borough Council and Steven Cochrane and Mike Kinsella provided us with invaluable guidance. Grant Gordon of the Institute of Family Business enabled us to ask questions about family entrepreneurship and we look forward to developing this whole area as a special topic. We must acknowledge the invaluable input from IFF Research, and Steve Lomax in particular as well as the hard work and patience of Christian Vaughan at Intuition Design. But above all the tireless support and understanding of our colleagues at Deloitte, London Business School, the Hunter Centre for Entrepreneurship, ERINI and the universities of Glamorgan, Cardiff and Kingston is greatly appreciated. Disclaimer Although data used in this work are collected by the GEM consortium, their analysis and interpretation are the sole responsibility of the authors. Data for this study were provided by the Global Entrepreneurship Monitor (GEM), which is a consortium that in 2005 comprised research teams from the following countries: Argentina, Austria, Australia, Belgium, Brazil, Canada, Chile, China, Croatia, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Jamaica, Japan, Latvia, Mexico, Netherlands, New Zealand, Norway, Singapore, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, UK, USA and Venezuela. Names of the members of national teams, the global coordination team, and the financial sponsors are published in the Global Entrepreneurship Monitor 2005 Report, which can be downloaded at org. We thank all the researchers and their financial supporters who made this research possible SECTION 5.0 Access to finance and cultural barriers to entrepreneurship SECTION 6.0 Social Entrepreneurship SECTION 7.0 Policy Conclusions SECTION 8.0 Appendix: GEM Methodology Interpreting GEM data DATA USED IN FIGURES
3 4 5 Entrepreneurship in 2005: overview 1.0 Entrepreneurship in 2005: overview Executive Summary Entrepreneurial activity in the UK remained roughly the same in the UK between 2004 and The Total Early Stage Entrepreneurial Activity (TEA) index identifies the proportion of adults of working age who are either setting up or have been running a business for less than 42 months. In 2005 the rate stood at 6.2% of the adult working age population 1. This is the third highest rate of the G7 economies behind the US (12.4%) and Canada (9.3%) 2. The gap in TEA between the UK and the US has widened slightly in 2005, due to a boost in the US rates of entrepreneurship from 11.3% in 2004 to 12.4% in Other headline GEM UK results in 2005 include: Male TEA has gone down slightly from 8.5% of the UK population to 8.2% of the UK population 3. Female TEA has remained the same at 3.9% of the population. necessity entrepreneurship in the UK has fallen from 1.4% of the adult working age population to just 0.7% between 2001 and Opportunity from 5.1% to 5.2%. The UK is the only country in the G7 to see a 50% drop in necessity entrepreneurship combined with a slight increase in opportunity entrepreneurship. In all other G7 countries, both necessity entrepreneurship and opportunity entrepreneurship have declined, with the exception of the US, where there was a small but insignificant increase from 1.3% to 1.5%, and from 10.3% to 10.4% respectively. Early stage entrepreneurship across all UK regions has increased over the whole period since 2002, but there has been no significant change in any region between 2004 and In the past year, there were small but insignificant reductions in entrepreneurial activity in the East Midlands, North East and Wales. Entrepreneurial activity remained the same in Northern Ireland, the South East and the South West. It increased, but not significantly, in the East of England, London, the North West, Scotland and Yorkshire and Humberside. 1. Global Entrepreneurship Monitor (GEM), one of the largest international social science research projects in the world, measured entrepreneurial attitudes and activities of individuals in 35 different countries in Its key measure of entrepreneurial activity, the TEA index, measures total early stage entrepreneurial activity, defined as the proportion of adults of working age (18-64 years old) who are engaged in setting up or running businesses either for themselves or for their employer that are less than 42 months old. 2. There are two major changes in the GEM global analysis in 2005, as documented in the 2005 GEM Global Report. First, Total Entrepreneurial Activity (TEA) is clarified as referring to early stage entrepreneurship. For the purposes of this report, we use the established term, TEA. Second, the global report is based on unweighted analysis of data available by a July 2005 cut-off date, and comparisons between countries. This yields the results for TEA that are reported in this section. In 2005, the full UK dataset, collected between May and September, comprised a survey of 32,500 adults in the UK population unevenly distributed across the UK RDA regions, with over sampling in some inter-regional areas, including certain London boroughs which had a high proportion of ethnic minorities. The full sample is therefore a stratified random sample and requires weighting if a reliable picture of entrepreneurial activity is to be painted for the UK as a whole. The weightings used produce a slightly lower but not significantly different rate of TEA at 6.0% of the adult population and this number is used in subsequent text where no international comparisons are made. Full methodological details are given in the appendix. 3. Using the whole UK weights rather than the global non-weighted dataset. entrepreneurship has increased marginally over the same period
4 : POLICY BACKGROUND Attitudes towards entrepreneurship are generally positive with a small but significant increase in the numbers of people seeing good business opportunities between 2004 (36%) and 2005 respondents and Pakistanis are twice as high as they are in White communities and TEA in the Black African community is almost three times higher. Black African women are significantly more to start a business in the next three years doubles, irrespective of gender or educational level, for those who have ever taken part in some form of enterprise training, government training or side (such as measures to create a step change in enterprise culture) and the supply side (for example, fiscal and regulatory measures, business support and improved access to finance). The most What is GEM? GEM Global has been running since 1999, and has grown from ten countries in its first year to 34 countries and more than 150 scholars from across the globe in GEM has three main objectives: 1. to measure differences in the level of entrepreneurial activity between countries 2. to uncover factors determining the levels of entrepreneurial activity 3. to identify policies that may enhance the level of entrepreneurial activity (38%). However, fear of failure has increased slightly but not significantly from 33% to 34% of the whole population year olds are the most likely of any age grouping to be expecting to start a business in the next three years. They are also, with the age group, the most likely to know an entrepreneur and have the second lowest fear of failure rate after the age group. Entrepreneurship is significantly more likely to be seen as a good career choice, and entrepreneurs are noticeably given a higher entrepreneurial than women from other ethnic groups. social entrepreneurial activity (SEA), defined as the proportion of working age adults actively trying to start a social enterprise that they will manage alone or with others, or managing a new social enterprise that is less than 3.5 years old, was 3.2% in the UK in SEA is particularly high among those with postgraduate education experience (5.5%) and is also high among students (5.0%) and in the ethnic minority community (5.0%). GEM UK reports for the first time work experience. More generally, entrepreneurial activity is significantly higher among those with a graduate or post-graduate qualification. the differences in levels of entrepreneurial activity between deprived and non-deprived areas are surprisingly small and not statistically significant. Entrepreneurial activity is lowest in the 20% most affluent wards in the UK (5.6%) and highest in the second most deprived quintile of UK wards (6.6%). This is true for the whole of the UK. However this may mask differences within important measures announced in the 2005 budget include: Commitments to regulate only where necessary and avoid the gold-plating (tailoring) of regulations. Following the Hampton review published at the same time as the budget, to have targets for reductions in the regulatory burden over time. The common compliance date programme where new regulations only come into effect at certain times of the year (April and October) has also been extended. targets to reduce the burden of How does GEM measure entrepreneurship? GEM measures entrepreneurial activity in a country through its key indicator, Total Early Stage Entrepreneurship (TEA). This indicator is calculated in an identical way in each country: 1. A telephone survey of a representative sample of the adult population in each country is conducted between May and September. 2. Respondents are asked to respond to three questions that are the basis of the TEA index: Are you, alone or with others, currently trying to start a new business independently of your work? Are you, alone or with others, currently trying to start a new business as part of your work? Are you, alone or with others, currently the owner or manager of a business? 3. those who respond positively to these questions are also asked how long they have been paying wages to employees as well as questions about cost and time to start-up, sources of finance and numbers of jobs created. A distinction is made between two types of entrepreneurs: nascent entrepreneurs (those that have been paying salaries for less than three months) and baby business owner-managers (those that have been paying salaries for between three and 42 months). 4. the TEA index is the sum of the nascent entrepreneurs and baby business owner-managers minus any double counting (i.e. those who respond positively to both). 5. in addition the GEM survey asks all respondents about their attitudes to entrepreneurial activity. status in society by year in 2005 responses to questions regions or local authority areas 4. taxation for small businesses, for 4. An example is provided in the GEM 2005 report for East Lancashire. 5. The central goal of the UK government s economic policy is to close the productivity gap with the US and other G7 competitor nations. It aims to do this through measures to promote macroeconomic stability and, at a microeconomic level, to correct market failures in the five productivity drivers of enterprise, innovation, investment, skills and competition (HM Treasury and Department for Trade and Industry, 2000: Productivity in the UK: the evidence and the government s approach ). This has been followed by a series of publications examining issues around the five productivity drivers at a regional and local level. olds than any other age group. They are much less likely to perceive they have the skills to start a business, however. Ethnic minority groups are, as in previous years, substantially more entrepreneurial than their white British counterparts, although this may in part be because they tend to be younger on average. TEA rates amongst Indian origin about enterprise education. We find that those who have taken some form of enterprise training at school, college or university are significantly more likely to be entrepreneurially active, to be expecting to start a business in the next three years or to be engaged in a nascent business (of less than three months old). The proportion of working age adults expecting : Policy Background Promoting enterprise remains a pillar of UK government policy and one of its five key productivity drivers 5. An important part of this is closing the gap in entrepreneurial activity between the US and the UK. Government has put in place measures to correct both the demand example through online methods for paying VAT. improving education and skills through the National Employer Training Pilots. introducing the ten-year science and innovation investment framework, including a mandatory requirement that at least 2.5% of public sector extra-mural Research and
5 : POLICY BACKGROUND GEM UK GEM UK is the largest single study of entrepreneurial activity in the world. Since 1999 it has grown from a survey of 2,000 adults to a survey in 2005 of some 32,500 adults. It uses the same methodology as the GEM global project to calculate TEA, but in addition asks questions about barriers to entrepreneurship, access to finance, and, critically, social entrepreneurship that other countries generally do not. In 2005, an additional boost was made to the sample to understand better ethnic minority entrepreneurship, and further demographic questions were added to understand better graduate entrepreneurship. The distribution of respondents is not even across the UK as some RDAs choose to boost their sample in order to have more detail about entrepreneurship in their region6. Results are checked against other metrics of entrepreneurial activity (including Barclays Bank surveys and VAT registrations/deregistrations). Full methodological details are appended at the end of the report. Development (R&D) spend will be with Small and Medium sized Enterprises (SMEs) and the extension of the R&D tax credits to include small firms with high innovation potential. Local Enterprise Growth Initiative to support entrepreneurship in the most deprived areas of England. Many government and nongovernmental organisations, entrepreneurship are among the most positive in the world. That attitudes have not changed may be due to a reduction in overall economic confidence between 2004 and Consumer spending has slowed on the back of increases in interest rates and worries about the performance of the housing market. The economy continues to show UK and compares it to other G7 economies. Within the G7, the UK s performance remains average: strong in comparison to Japan, weak in comparison to Canada and the US. There is little difference between the UK and other G7 European countries. It goes on to examine the entrepreneurial attitudes in the UK as a whole and the geographical distribution of the most affluent and least affluent wards in the UK. The consistent finding of the report is that very little has changed in the last 12 months. There are, however, many reasons to be positive about the cultural change that is happening in the UK. Since 2002, there does appear to be a step change in attitudes towards entrepreneurship Because of its size, GEM UK has the capacity to analyse the entrepreneurs captured in the survey and their businesses in more detail. For example, we are able to understand access to finance, reasons for failing to gain finance and types of business (for example innovative, technology-based and high expectation). A number of government departments, and particularly the Small Business Service, use GEM to help measure progress towards their enterprise targets. Every attempt is made to ensure that the results as reported are as reliable and robust as possible. Hence the weightings used to report on UK-only results are designed to take into account the differential regional sampling. Where results are compared internationally, the same protocol is used as that of the GEM global report. The comparative results are unweighted, and the sample size is that used by GEM global (11,167). This sample size is smaller because of the sheer size of the UK sample. Only one-third of the UK data had been gathered by the cut-off date set by GEM global due to the size of the survey. Despite this, the difference between TEA calculated on the unweighted UK sample used by GEM global (6.2%) and TEA calculated on the full weighted UK sample of 27,277 working age adults (6.0%) is minimal. including the Regional Development Agencies (RDAs), now have closing the entrepreneurial activity gap as one of their core policy goals. Summary and overview of the report The results for the UK are mixed. Overall, there are few differences in entrepreneurial activity compared to 2004, although since 2002 the trend has been slightly upwards. Similarly, although attitudes towards strong and stable growth and near full employment. However, the same factors that affect consumer demand may well have an impact on the tendency of UK adults to take the risk of setting up a business. So any interpretation of the data in this report has to be seen in light of the wider economic conditions, and particularly those conditions affecting general confidence and attitudes towards risk. Since a large proportion of start-up finance entrepreneurship. It shows that attitudes towards entrepreneurship have improved substantially since 2002 in every area except fear of failure. It then compares regions, urban and rural locations and locations by degree of affluence, as measured through the Index of Multiple Deprivation (IMD). The regional gap has widened slightly over the year, due largely to an increase in entrepreneurial activity in London (up from 7.5% to and a more diverse group of people is involved in entrepreneurial activity. Fear of failure however remains a challenge since, over the period as a whole, there has been little change in this attitudinal indicator. It is significantly and negatively correlated with TEA 7. In other words, those who are involved in entrepreneurial activity are significantly less likely to fear failure than those who are not. Where fear of failure is increasing, this entrepreneurship have generally comes from the individual 8.3%) and a reduction in the North points to a general risk aversion improved over the longer time entrepreneur, often in the form of East (from 4.5% to 3.8%). Regional that could potentially undermine period, overall, attitudes in 2005 personal overdrafts and bank loans, differences and relative positions progress towards increasing rates have remained similar to anything that affects the propensity of the regions remain similar to of entrepreneurial activity in the Even though attitudes in the UK have to borrow could impact on overall previous years. Rural locations have UK. If the government is to close not changed significantly over the levels of entrepreneurship. higher levels of entrepreneurial the gap between the US and the 6. The distribution of the sample in 2005 was as follows: East Midlands: 3,000, East of England: 1,000, London: 1,500, North East: 1,000, North West: 3,000, Northern Ireland: 5,000, Scotland: 2,000, South East: 3,000, South West: 1,000; Wales: 8,000, West Midlands: 1,000, Yorkshire and Humberside: 3, significant at the 5% level. last 12 months, the UK still remains the country with the third highest levels of entrepreneurial activity in the G7, and attitudes towards This report examines entrepreneurial activity in the UK during 2005 in some detail. It looks first at the activity than urban ones (8.2% and 6.0% respectively) and there are surprisingly few differences between levels of entrepreneurial activity in UK in entrepreneurial activity, then this is a feature of the UK s cultural landscape that should be addressed with some urgency.
6 10 11 Entrepreneurial activity in the G7 countries 2.0 Entrepreneurial activity in the G7 countries The 2005 pre-budget report suggested that overall growth rates globally had declined due to cyclical and exogenous shocks 8. This has affected developed economies in particular. Yet towards the end of 2005 there was evidence that confidence, particularly in the US, Japan and Germany may be exceeded 2001 entrepreneurial activity levels by Since 2003, entrepreneurial activity has been steady in the UK and Japan, and rising in Canada and Italy. The trend is more uncertain in France and Germany. Five of the seven G7 countries saw slight increases in TEA figures TEA (% adult population) US Germany France UK Italy Canada Japan Figure 1 Early stage entrepreneurial activity (TEA) in the G7 countries Source: GEM Global Adult Population Surveys year returning and third quarter growth rates are higher 9. Emerging confidence is reflected in higher entrepreneurial activity compared with 2004 in most of the G7 economies, as illustrated in Figure The main features of Figure 1 are as follows: Entrepreneurial activity in all G7 countries dipped after 2001, but recovered rapidly in the US, which is the only country to have in the past 12 months: US (from 11.3% in 2004 to 12.4% in 2005), Germany (from 4.5% in 2004 to 5.4% in 2005), Italy (from 4.3% in 2004 to 4.9% in 2005), Canada (from 8.9% in 2004 to 9.3% in 2005), and Japan (from 1.5% in 2004 to 2.2% in 2005). two of the seven G7 countries saw slight falls in the past 12 months: UK (from 6.3% in 2004 to 6.2% in 2005) and France (from 6.0% in 2004 to 5.4% in 2005) Pre-Budget report. 9. Financial Times, 7th December Figure 1 uses the unweighted global dataset to compare rates of early stage entrepreneurial activity (TEA). The results presented here are identical to those reported in the main 2005 GEM global report. This approach is taken because the government requires a figure for TEA that is based on the same calculation as that used in other countries for comparative purposes.
7 12 13 Entrepreneurial activity in the G7 countries Figure 2 G7 Female Entrepreneurial Activity Source: GEM Global Adult Population Surveys TEA (% adult population) US Germany France UK Italy Canada Japan TEA (% adult population) Male Female Figure 3 The gap between male and female entrepreneurial activity in the G7 countries 2005 Source: GEM Global Adult Population Survey US Germany France UK Italy Canada Japan year country Entrepreneurial activity by gender Germany (from 2.6% in 2004 The UK has a gender gap that is the G7 economies is relatively low The US and Canada, who to 3.8% in 2005) and Italy (from now around the average for the G7 compared with that in less developed out-perform the other G7 economies 2.3% in 2004 to 3.7% in 2005). economies at 47%. Comparable nations. Japan has the lowest level of in terms of entrepreneurial activity Female TEA for Japan has figures are: Italy (60%), Germany necessity entrepreneurship at just 0.4% generally, have both seen slight remained constant between (55%), France (45%) and Canada of the adult working age population. drops in entrepreneurial activity amongst women, as illustrated in Figure 2. Levels of female entrepreneurship in Italy, France, Germany and the UK were very similar in Figure 2 demonstrates remarkable stability over the last three years: Female TEA has decreased slightly in three of the seven G7 countries: US (from 10.7% in 2004 to 9.7% in 2005), France (from 3.8% in 2004 to 3.3% in 2005) and Canada (from 6.1% in 2004 to 2004 and 2005 (1.2%). It has also stayed the same for the UK (at 3.9%). The gap in levels of male and female TEA is presented in Figure 3 for 2005 only. There is a clear gender gap in all G7 countries, with figures for males consistently higher than those for females. The US has the narrowest gap, with female entrepreneurship being 63% of the level of male entrepreneurship compared with 89% in Japan has the widest (42%). Male entrepreneurship on average in the G7 is 8.6% of the adult population of working age, while female entrepreneurship is, on average, 4.4% of the adult population of working age. Female entrepreneurship is 51.7% of male entrepreneurship. Necessity and opportunity entrepreneurship GEM distinguishes between necessity entrepreneurship (where respondents are engaged in entrepreneurial activity because they have no better choice for work) and opportunity This, however, hides a broader picture of the relationship between necessity and opportunity entrepreneurship over time in the G7 economies. This is illustrated in Figure 4, which shows necessity entrepreneurship as a percentage of opportunity entrepreneurship. Where this relationship is falling over time, as it is in Italy, the UK, Japan or Canada, it suggests either that more people are taking market opportunities or that fewer people are having to become entrepreneurs because there are no better choices for work. 5.6% in 2005). gap. Here, female entrepreneurship entrepreneurship (where respondents Female TEA has increased slightly is just 38% of the level of male are seizing a market opportunity). in two of the seven G7 countries: entrepreneurship. Necessity entrepreneurship overall in
8 14 15 Entrepreneurial activity in the G7 countries Figure 4 Necessity entrepreneurship as a percentage of opportunity entrepreneurship for G7 countries Source: GEM Global Adult Population Surveys Necessity/Opportunity TEA (%) US Germany France UK Italy Canada Japan I have been an informal investor in the past three years (% answering yes) I expect to start a business within the next three years (% answering yes) United States France Italy Table 1 Informal investment and future start-up intentions in the G7 economies Source: GEM Global Adult Population Surveys United Kingdom year Germany Figure 4 demonstrates that the US and the UK have the lowest in Canada and the US changes in the ratio were due to increases Japan Canada level of necessity entrepreneurship in numbers of opportunity driven as a percentage of opportunity entrepreneurs rather than a decline Perceptional, attitudinal and of people s attitudes towards the entrepreneurship, with Canada, Italy in necessity entrepreneurs. cultural indicators prospects for entrepreneurial activity. and Japan just behind. Table 1 shows important indicators Overall, for G7 countries with of support for entrepreneurial Table 1 can be summarised as follows: Japan and Canada have both lower levels of entrepreneurial activity: informal investment activity seen considerable decreases activity, 2005 has seen an and intentions to start a business. the UK has consistently had the in necessity entrepreneurship increase in the number of necessity Informal investment activity gives an second-lowest informal investment as a percentage of opportunity driven entrepreneurs without indication of the actual rate and the third-lowest start-up entrepreneurship since 2001 a corresponding increase in inter-personal entrepreneurial intentions rate of the G7 countries (95% to 22% and 39% to 17% opportunity entrepreneurship. This support networks within a country. from 2003 to respectively), largely due to may have happened because of In contrast, intentions to start a informal investment activity decreases in the levels in necessity changes in labour market policy business give us an idea of both the continued to decline in Germany entrepreneurship. changing benefit entitlements confidence in the future economic and the US, but Canada and the 2005 saw an increase in the attached to unemployment by and social conditions to support UK which had seen a downward necessity to opportunity ratio incentivising start-ups. By contrast, entrepreneurship and the extent to pattern between 2002 and 2003 on 2004 for a number of the countries with high entrepreneurial which entrepreneurship is something experienced an increase in activity countries, most obviously, activity produced even more that people are thinking about. in France 11, but sizable increases opportunity entrepreneurs. Japan also experienced an were also seen for Italy and The start-up intention rate in Table 1 increase in informal investment Japan. This was largely due to should not be read as an indication activity, albeit from a low starting 11. the 2005 data for France is out of line with the long term trend and warrants further investigation. increases in the levels of necessity entrepreneurship. of actual start-ups over the next three years but merely as a signal point relative to other G7 countries.
9 16 17 Entrepreneurial activity in the G7 countries Table 2 12 Entrepreneurial attitudes and perceptions Source: GEM Global Adult Population Surveys I know someone who started a business in the last two years There will be good opportunities to start a business in my area in the next six months I have the skills, knowledge and experience to start a business Fear of failure would prevent me from starting a business 12. some of the 2004 and 2005 data may vary slightly from those presented for the UK in Table 2. This is because the Table 2 data is based on unweighted data whereas Table 3 data is based on weighted data. See footnote 1. G7 countries within Europe saw a general decline in the percentage of respondents who expected to start a business in the next three years. Canada, however, saw a strong increase in the percentage of people expecting to start a business in the next three years. intentions have grown in France and Italy over the period to exceed UK and German levels. The rather mixed picture of economic and entrepreneurial performance across the G7 countries is reflected in the responses to attitudinal questions within the GEM survey. These look at the general cultural context of entrepreneurship measured through the networks and self-perceptions of respondents. These represent good barometers of overall confidence in the climate for entrepreneurship in any one US F IT UK D J C country. For example, we know that networks are important determinants of entrepreneurial activity. GEM measures this by asking people if they know an entrepreneur. General confidence in the economy can be measured through the perception of entrepreneurial opportunities. Self-confidence can be measured in two ways perception of one s own skills to start a business and fear of failure that would prevent individuals starting a business. Table 2 presents these attitudinal differences, the main features of which are as follows: Attitudes in the US appear to have become more negative between 2004 and 2005, with perceptions of entrepreneurial opportunities and attitudes towards skills falling slightly between the two years. Fear of failure also increased. the UK and Canada are the only two countries in the G7 where perceptions have improved throughout the whole period. In both countries fear of failure has increased slightly: a change which is statistically significant for the UK. Germany exhibited a more positive outlook in 2005 after a period of generally very negative perceptions of entrepreneurship. in Italy perceptions of entrepreneurial opportunities decreased considerably between 2004 and This is part of a wider pattern since 2003 of more negative attitudes towards entrepreneurship. Fewer people in the UK say they know someone who has started a business in the last two years than in any other G7 country. Opportunity perception is more positive in the UK than in any other G7 country except Canada. Entrepreneurial skills perception in the UK is very close to US and Canadian levels, which are the highest in the G7. Fear of failure is lower in the UK than among other European G7 countries, but much higher than the US.
10 18 19 Entrepreneurial activity in the G7 countries Entrepreneurial attitudes in the UK from 2001 to 2005 Since a core goal of UK government policy is to make a step change in the In the light of this, there is every reason to suggest that a cultural change is beginning to happen, but that this has yet to have an I expect to start a business in the next three years Table 3 Perceptions of and attitudes towards entrepreneurial activity in the UK entrepreneurial culture, recording the pattern of entrepreneurial perceptions impact on entrepreneurial activity which has remained stable over the I know someone who started a business in the last two years Source: GEM Global Adult Population Surveys and attitudes in the UK over the past five years is important in assessing the impact of policy. The pattern of GEM attitudinal measures is illustrated in Table 3 overleaf. Rather than examining the year on period. However, compared with the G7 countries with high levels of entrepreneurial activity, the attitude that is most out of line in the UK is fear of failure. This suggests that policy should focus on alleviating fear of failure if it is to be effective There will be good opportunities to start a business in my area in the next six months I have the skills, knowledge and experience to start a business Fear of failure would prevent me from starting a business year changes, it is instructive to look in creating a comprehensive step at the whole time period between 2001 and This demonstrates change in activity. Starting a business is a good career choice that in the UK since 2001: Entrepreneurs have a high status in society the proportion of the working age population who are Media coverage of entrepreneurship is good expecting to start a business has nearly doubled. the proportion who know an entrepreneur has stayed roughly the same. the proportion who perceive good business opportunities has more than doubled. the proportion who think they have the skills to start a business has increased from 40% to more than 50%. Attitudes towards entrepreneurship as a career and its status in society are steady.
11 20 21 Geography of Entrepreneurship 3.0 Geography of Entrepreneurship TEA (% adult population) 12% 10% 8% 6% 4% Figure 5 TEA in the UK regions Source: GEM Global Adult Population Surveys % 0% East Midlands East of England London North East North West Northern Ireland Scotland South East UK Region South West Wales West Midlands Yorkshire & Humberside UK Entrepreneurship in the regions As part of the Comprehensive Spending Review, and the subsequent ten-year science strategy, the UK government has given the Regional Development Agencies (RDAs) considerable autonomy over the direction of innovation and entrepreneurship at a regional level. The overall goal of national policy is to close the productivity (or wealth creation) gap between the poorest regions of the UK and the wealthiest through policies that are tailored to the needs of regional labour markets. A key part of this is the role of the RDAs, who now have public service agreements (PSAs) that target increasing levels of entrepreneurship. The figures reported here are, therefore, useful measures for policy development and assessment. The picture of TEA across the UK regions between 2002 and 2005 is presented in Figure 5. Figure 5 illustrates that entrepreneurial activity over the period since 2002, when regional comparisons were first made within GEM UK, has increased. However, the pattern has been mixed with no region, except the South West and Yorkshire and Humberside, seeing consistent increases over the whole period. For example, the East Midlands saw substantial increases
12 22 23 Geography of Entrepreneurship Table 4 Underlying entrepreneurial trends by region Source: GEM UK Adult Population Surveys I am trying to start a new business I am trying to start a new business for my employer I am currently the owner of a business I help manage I have closed down a business in the last 12 months E. Midlands E. of England TEA (% Adult Population) 12% 10% 8% 6% 4% 2% Female Male Figure 6 Male and female TEA by region 2005 Source: GEM UK Adult Population Surveys 2005 London N. East % East Midlands East of England London North East North West Northern Ireland Scotland South East UK Region South West Wales West Midlands Yorkshire & Humberside UK 13. tea measures new business activity by individual people. N. West N. Ireland Scotland S. East S. West Wales W. Midlands Yorkshire & Humberside up as far as 2004 when TEA was 7.0%, but this has tailed off and now stands at 5.3%. London saw a big increase in 2003, but most of this increase was lost in 2004, followed by a slight rise to 8.3% in The gap between the most and the least entrepreneurial regions was 3.2% in 2002, rising to 6.2% in 2003, falling again to 3.3% in 2004, and finally 4.5% in However, relative positions and rates of entrepreneurial activity at a regional level have not changed over the last year. The components of entrepreneurial activity by region over the past three years yield some interesting results, and these are illustrated in Table 4. Table 4 illustrates trends in the components of TEA: independent and job related start-ups and owner-manager businesses 13. In addition, Table 4 shows the proportion of working age adults who had shut down, discontinued or quit (but not sold) a business in the last year. Two features can be extracted from the table: the proportion of individuals reporting they were either trying to start a new business, to start a new business for their employer, or were owner-managers of their own business has declined in most regions between 2003 and In many cases these changes were not significant. Business closure rates have declined slightly but again not significantly in most UK regions over the period. The exceptions are London, the North East, Northern Ireland, Scotland and Wales. Figure 6 shows the difference in male and female TEA rates by region. Male TEA rates are significantly different between London, which has the highest TEA rate, and the North East, North West, Northern Ireland and Wales. Male TEA rates are also significantly different between the South East and the North East, Northern Ireland and Wales. Among females, the only significant differences in TEA rates were between London and the North West and Northern Ireland. Male TEA rates were significantly higher than female TEA rates in all regions except the North East and South West. As with previous interpretation of the data, some care is necessary here. Over the period as a whole (2002-
13 24 25 Geography of Entrepreneurship Figure 7 Male and female opportunity and necessity entrepreneurship by UK region 2005 Source: GEM UK Adult Population Surveys 2005 TEA (% adult population) Female opportunity Female necessity Male opportunity Male necessity I know someone who started a business in the last two years There will be good opportunities to start a business in my area in the next six month I have the skills, knowledge and experience to start a business Fear of failure would prevent me starting a business Table 5 Perceptional and attitudinal responses at a regional level 2005 Source: GEM UK Adult Population Survey East Midlands East of England London North East North West Northern Ireland Scotland South East UK Region South West Wales West Midlands Yorkshire & Humberside E. Midlands E. of England London ) there have been increases in female entrepreneurial activity, but these must be seen in the context of the changes between 2004 and For six out of the 12 regions there were insignificant drops in female entrepreneurial activity (East Midlands: 4.5 to 3.4%; North East: 3.7 to 2.7%; North West: 2.6 to 2.2%; South East: 4.5 to 3.9%; South West: 5.6 to 5.5% and Wales: 4.6 to 3.6%). Otherwise, female entrepreneurial activity increased or stayed the same: (East of England, 3.4% to 3.9%; London, 4.2% to 5.8%; Northern Ireland: 2.3 to 2.8%; West Midlands: 3.0 to 3.3%; Scotland, where the level has remained the same at 3.8% and Yorkshire and Humberside, 3.1% to 3.4%). Figure 7 presents a fascinating insight into the patterns of necessity and opportunity entrepreneurship in the UK regions. Across the board, female necessity TEA is lower than male necessity TEA, both in absolute and relative terms. For example: in the North East, male necessity entrepreneurship is 1.2%. This is 40% of the level for opportunity entrepreneurship. In contrast, female necessity entrepreneurship is just 8% of female opportunity entrepreneurship (0.2% and 2.5% respectively). in London, male necessity entrepreneurship is the second highest in the UK at 2.1%. This is one quarter the rate of opportunity entrepreneurship (8.4%). By contrast, opportunity entrepreneurship is 5.7% for women in London, while necessity entrepreneurship is just 0.1%. Responses to perceptional and attitudinal questions are given in Table 5. N. East N. West N. Ireland Scotland S. East S. West Wales W. Midlands Yorkshire & Humberside UK Table 5 demonstrates that although attitudes appear to have become more positive between 2004 and 2005, these changes are small. However: there have been significant increases in the proportion of people who say they know someone who started a business in the last two years in the 3 regions in the North of England: the North East, North West, and Yorkshire and Humberside, bringing these regions much closer to the national average.
14 26 27 Geography of Entrepreneurship Figure 8 Informal investment activity by UK region Source: GEM UK Adult Population Surveys Informal investment (% adult population) East Midlands East of England London North East North West Northern Ireland Scotland South East UK Region South West Wales West Midlands Yorkshire & Humberside UK % respondents expecting to start-up in next three years East Midlands East of England London North East North West Northern Ireland UK Region Scotland South East South West Wales West Midlands Yorkshire & Humberside Average Figure 9 Responses to the question, I expect to start-up a business in the next three years by UK region Source: GEM Global Adult Population Surveys Opportunity perception is generally higher in London and the southern regions than in the northern and western regions. skills self-perception also varies geographically, with southern regions and the Midlands having higher skills perception than the north and west of the UK. northern Ireland stands out as having a particularly high fear of failure rate at 42% (43% for 2004). Informal investment activity, either in the form of small scale investments by individuals in someone else s start-up, or in the form of business angel activity is another important indicator of the actual cultural support for entrepreneurship, since it tells us about the extent to which people are willing to invest in the ventures of other people. In the UK as a whole, informal investment activity has fallen slightly since 2002, but has not changed since 2004, as shown in Figure 8. None of the regional year-on-year differences shown in Figure 8 are significant. This is not surprising, for two reasons. First, informal investment activity in the UK is very low overall. Second, because informal investment activity is so rare, it has to be measured for the preceding threeyear period. Thus any year-on-year change will be diluted. Despite the drop in overall entrepreneurial activity within some UK regions, there is some increase in the numbers of people expecting to start a business in the next three years in almost all regions, as illustrated in Figure 9. This suggests a more positive outlook for overall levels of entrepreneurial activity in the next few years. Figure 9 shows some regions portraying an apparent increase in the proportion of individuals expecting to start up a business in the next three years, with other regions showing apparent decreases. In fact, none of these differences is significant. Summary of urban-rural differences in England, levels of entrepreneurial activity are significantly higher in rural locations compared with those of urban locations (urban/rural measures are available for England only). Women in rural areas are nearly twice as likely to be entrepreneurial than those living in urban areas. The rural female TEA rate is 6.5% compared with 3.6% for urban women. Men living in rural areas are only slightly more entrepreneurially active than men in urban areas. TEA amongst rural men is 10.1%, while amongst urban men it is 8.5%. perceptions of entrepreneurial opportunities in rural areas are generally more positive than in urban areas, as illustrated in Table 6 on page 28.
15 28 29 Geography of Entrepreneurship Table 6 Urban-rural attitudes to entrepreneurship compared (England only) 2005 Source: GEM Global Adult Population Surveys Urban Rural I know someone who started a business in the last two years There will be good opportunities to start a business in my area in the next six months % most deprived wards 20% quite deprived wards 20% average affluence wards 20% quite affluent wards 20% most affluent wards TEA Table 7 TEA and entrepreneurial attitudes by Index of Multiple Deprivation 2005 Source: GEM UK Adult Population Survey 2005, based on a weighted sample of 21,901 I have the skills, knowledge and experience to start a business Female TEA Fear of failure would prevent me from starting a business Nec TEA (F) I expect to start a business in the next three years Opp TEA (F) the Index of Multiple Deprivation 2004 measures deprivation for every Super Output Area and local authority area in England. It combines indicators across seven domains into a single deprivation score and rank. The domains are: income deprivation, employment deprivation, health deprivation and disability, education, skills and training deprivation, barriers to housing and services, living environment deprivation and crime. More details from Starting a business is a good career choice Entrepreneurs have a high status in society Media coverage of entrepreneurship is good Differences by Index of Multiple Deprivation in England 14 Table 7 presents the differences in entrepreneurial activity and in perceptional and cultural responses by the Index of Multiple Deprivation. This index is grouped into quintiles, each representing 20% of wards in the country from the most deprived to the least deprived. As reported in 2004, the levels of entrepreneurial activity do not differ significantly by Index of Multiple Deprivation. There are, however, some interesting differences in attitudes: those in the most deprived wards are more likely to say they know an entrepreneur, more likely to say they have the skills and more likely to see good start-up opportunities. Interestingly, they are also more likely to say that fear of failure would prevent them from starting a business. those in the most affluent wards are more likely to agree that entrepreneurship is a good career choice and a high status activity than those in the least affluent wards. necessity entrepreneurship in all five quintiles is in line with UK averages for both women and men. It cannot be stated with any statistical significance that necessity entrepreneurship is higher in more deprived wards. Summary The picture painted here confirms the regional patterns revealed in the GEM UK 2004 report. Although the overall level of early stage entrepreneurship remains broadly unchanged at the UK level there are some optimistic trends emerging from the 2005 survey: the trend in early stage entrepreneurial activity and for Male TEA Nec TEA (M) Opp TEA (M) Personally know entrepreneur attitudes towards entrepreneurship since 2002 provides some evidence of an improvement in the environment for entrepreneurship in the regions of the UK, although the changes are not significant. London and the southern regions have higher levels of entrepreneurial activity and more favourable attitudes than northern and western regions. Of particular interest is the number of people who are expecting to start a business over the next three years, which has increased over the proportion recorded in Good opportunities Fear failure Have skills Good career High status Positive media Most deprived wards are neither more nor less likely to be entrepreneurial than the most affluent wards, nor are levels of necessity entrepreneurship higher in the most deprived wards. However, respondents from the most affluent wards are more likely to see entrepreneurship as a good career choice and a high status activity, while those from the most deprived wards are most likely to have positive self-perceptions about their skills and the opportunities.
16 30 31 Entrepreneurial people 4.0 Entrepreneurial people People are at the heart of entrepreneurial activity. After all, it is people who set up businesses, people who fund businesses and people who grow businesses. Much of entrepreneurial policy centres around changing the demand side, in other words, altering people s behaviours to increase the numbers who set up, fund and grow businesses. There are two reasons why the government has this as a policy focus: it increases the numbers of people who are engaged in labour market activity and therefore increases the wealth creation potential (or productivity) of the economy. it gives individuals a means of participating in the labour market through their own creativity, their own desire to help regenerate a community or, of course, their own drive to create wealth. The government has targeted a number of groups where entrepreneurial activity is believed to be below its full potential. These include women, ethnic minorities young people and graduates in particular. This section focuses on these groups in order to understand where some of the gaps in activity might be and, hence, to make recommendations for policy. GEM UK evidence presented here suggests that ethnic minorities as a group and graduates have relatively high levels of entrepreneurial activity. Entrepreneurial demographics Figure 10 suggests that male and female entrepreneurship had a similar pattern by age in Female Male Total Figure 10 TEA by age grouping and gender 2005 Source: GEM UK Adult Population Survey 2005 TEA (% adult population) AGE GROUP
17 32 33 Entrepreneurial people Table 8 Attitudes towards entrepreneurship by age 2005 Source: GEM UK Adult Population Data 2005 Age group I expect to start a business in the next three years I know someone who started a business in the last two years There will be good opportunities to start a business in my area in the next six months I have the skills, knowledge and experience to start a business TEA (% adult population) 12% 10% 8% 6% 4% 2% Figure 11 TEA by educational attainment 2005 Source: GEM UK Adult Population Survey 2005 Fear of failure would prevent me from starting a business Entrepreneurship is a good career choice % Doctorate Masters Bachelors A-level or equivalent GCSE or equivalent Educational Level Vocational Other None Entrepreneurs have a high status in society Entrepreneurship has good media coverage The year old age group has the highest level of entrepreneurship at 10.0% for men and 5.5% for women. The gender gap seems to be widest among the year old age group and narrowest among those aged 45 plus. Table 8 looks at the attitudes towards entrepreneurship by age: year olds are the most likely of any age grouping to be expecting to start a business in the next three years as they have been in 2003 and The fact that entrepreneurial intention declines with age but action peaks in the middle working age group is interesting, and merits further investigation year olds are also, with the age group, more likely to know an entrepreneur than older age groups yet all groups have similar levels of fear of failure, with the exception of the year old age group which has lower fear of failure than any other age group. Entrepreneurship is significantly more likely to be seen as a good career choice by year olds, and entrepreneurs noticeably given a higher status in society by these young adults than by any other age group. They are much less likely to say they have the skills to start a business, however. the most positive combination of perceived skills and opportunities is to be found in the year old age group, although the adjacent age groups have very similar combinations. This is not surprising since it is these groups that are the most entrepreneurially active. Figure 11 shows the levels of TEA as a percentage of the adult population within each educational category. Level of education, on its own, appears to be a strong predictor of whether or not an individual will be an entrepreneur. For example, TEA is highest amongst those with a Master s level qualification (10.5%) or a doctorate (10.2%). 7.6% of those with an undergraduate qualification are engaged in some form of entrepreneurial activity. This result holds for both men and women: for both genders TEA rates are significantly higher (significant at the 1% level) amongst those who hold a university qualification compared with those who do not. The TEA rate for women with a degree is 5.6% compared with 3.1% for women who do not have a degree. For men, the comparable figures are 11.0% for those with a university qualification and 6.8% for those without.
18 34 35 Entrepreneurial people Table 9 TEA rates by age and educational attainment 2005 Source: GEM UK Adult Population Survey 2005 Doctorate (TEA total: 10.2) Masters (TEA total: 10.5) Bachelors (TEA total: 7.6) A level or equivalent (TEA total: 5.3) GCSE or equivalent (TEA total: 5.0) Vocational (TEA total: 5.9) No formal (TEA total: 3.0) % of those in full time academic education expecting to start a business in the next three years Doctorate Masters Bachelor A Level Educational Level Figure 12 Expect to start a business by course of academic study 2005 Source: GEM UK Adult Population Survey 2005 There appears to be a quite similar patterns for A level and Those studying for Masters level individuals, unless their naïveté can remarkable impact of education GCSE level qualifications. qualifications are more likely to be addressed. on entrepreneurial activity when For those with vocational be planning to start a business in we examine the data by age qualifications, entrepreneurial activity the next three years than any of Entrepreneurial activity for those in grouping. Probably because those peaks in the year age group. the other groups in full time the full time education is lower than in higher education simply take For those with no formal academic education. Overall, for the population as a whole, but longer to reach the labour market qualifications, entrepreneurial 14.2% of the year old there appears to be a greater desire and assimilate market and industry activity declines with age. population in full time education is amongst those in full time education experience, those with higher levels thinking of starting a business and to start a business in the future. To of education tend to start businesses Educational impact this compares favourably with the this end, the government, prompted later in life: As shown in Figure 12, TEA amongst UK average of 8.7%. Of course, by the Davies Review, has put in those who are in full time education this could simply be because place enterprise training schemes to For those with post-graduate at 2.8% is markedly lower than for adults in full time education are work alongside primary, secondary qualifications, older people (above the population as a whole. For more likely to be thinking of and tertiary educational programmes 35) are generally more likely to be those in university education, the TEA employment options, including as a mechanism for increasing the entrepreneurial than their younger rate is 4.0%: for men, 4.7% and for self-employment, than those who awareness of and engagement in counterparts. A noted exception is women, 3.4%. are in full-time employment. It entrepreneurship. those aged 18 to 24 with a Masters could also be because most of qualification. The picture changes if we look these adults are in the youngest age For the first time in this annual series, For those with undergraduate at those in full time academic group, and are entrepreneurially GEM UK reports the responses to qualifications it is the year education who expect to start a naïve. Thus their intentions may key GEM survey questions in relation old age group that is noticeably business within the next three years. not be as likely to translate into to whether or not an individual has more entrepreneurial. There are This is illustrated in Figure 12. entrepreneurial action as older taken enterprise training.
19 36 37 Entrepreneurial people 15. All results are significant at the 1% level. At all levels of education we find that there is an association between enterprise training and entrepreneurial activity 15. While this may to some extent be the result of self-selection on to training courses, the results do suggest an association between entrepreneurship training and propensity to be entrepreneurial: School enterprise training: 16% of those who had taken enterprise training in school expected to start a businesses within the next three years compared with 7.7% of those who had had no training. The association between taking enterprise training at school and subsequent entrepreneurial activity is strong for women. Women who have taken enterprise training are twice as likely to be expecting to start a business (5.6% without training and 12.3% with training). They also have nearly double the TEA rate (3.6% without and 6.3% with) and are more than twice as likely to be involved with a nascent business (1.8% compared with 4.6%). Again, there may be some self-selection on to training courses that explains this differential. College or university enterprise training: The gender impact is less marked for those with a college or university training, but overall enterprise training at college or university nearly doubles the likelihood that an individual will be involved in entrepreneurial activity. If an individual has received enterprise training at a university, their TEA rate is higher than that of a university-educated individual of the same gender, age and ethnicity. This is illustrated in Table 10. Work experience with SMEs at school or college: Work experience while in education similarly doubles the likelihood of an individual, irrespective of gender, being entrepreneurially active. This suggests an association between work experience in an SME at school or college and subsequent entrepreneurial activity that warrants further multivariate testing. Generally the apparent impact of work experience is greater on start-up expectations and nascent entrepreneurial activity than on TEA. Start-up expectations increase from 6.4% to 13.0%, nascent entrepreneurship increases from 3.3% to 5.6% and TEA increases from 5.3% to 7.3% following work experience with SMEs. TEA (% adult population) Women Enterprise training taken No enterprise training Expect to start-up TEA Nascent entrepreneur Men Expect to start-up TEA Nascent entrepreneur Total Expect to start-up TEA Nascent entrepreneur % 14% 12% 10% 8% 6% 4% 2% 0 Working full time (30+ hours per week) Working part time (8 or more hours per week) A full time homemaker Retired and not in paid employment In full time education EMPLOYMENT STATUS Registered long term sick or disabled All Male Female Out of work at the moment and claiming benefit Not working at the moment and not claiming benefit Table 10 College/University enterprise training and early stage entrepreneurial behaviours 2005 Source: GEM UK Adult Population Survey 2005 Figure 13 TEA by employment grouping (men and women compared) 2005 Source: GEM UK Adult Population Survey 2005
20 38 39 Entrepreneurial people Figure 14 TEA by income grouping, men and women compared 2005 Source: GEM UK Adult Population Survey 2005 TEA (% of adult population) 18% 16% 14% 12% 10% 8% 6% 4% All Male Female I expect to start a business in the next three years I know someone who started a business in the last two years There will be good opportunities to start a business in my area in the next six months Men Women Table 11 Attitudes by gender Source: GEM UK Adult Population Surveys % 0 11,500 11,500-17,499 17,500-24,999 25,000-29,000 30,000-39,999 Household Income Group 40,000-49,999 50,000-74,999 75,000 I have the skills, knowledge and experience to start a business Fear of failure would prevent me from starting a business Entrepreneurship is a good career choice Employment status and income grouping The government has placed considerable emphasis on increasing entrepreneurial activity to decrease labour market inactivity, which remains high despite positive employment figures. Figure 13 shows entrepreneurial activity rates by employment status and includes those who are labour market inactive (i.e. out of work but not claiming benefit). The groups with the highest levels of early stage entrepreneurial activity are those who are in full-time or part-time work, 7.3% and 6.7% respectively. For those in full-time employment the rate is 8.9% for men and 4.6% for women, or 7.3% overall. The TEA rate for male parttime workers is significantly higher at 13.9% and the female rate is marginally but not significantly higher at 4.9%, but because only 20% of the part-time workers in the sample were male, the overall rate for part-time workers is slightly but not significantly lower at 6.7%. Interestingly, TEA rates are second highest amongst men who are not working and not claiming benefit at 10.9% and fourth highest amongst women at 2.8% suggesting that some entrepreneurial activity could indeed be a route through to greater labour market participation. Students have the same rate of early stage entrepreneurial activity as they had in TEA amongst this group was 2.9%, an identical rate to Entrepreneurs have a high status in society Entrepreneurship has good media coverage Despite the higher rates amongst those who are technically labour market inactive, however, it is those with the highest incomes who are most likely to be engaged in entrepreneurial activity, as illustrated in Figure 14. This holds for both men and women. Men and women compared In spite of all the efforts to increase female entrepreneurship, levels of entrepreneurial activity remain at just half that of the male rates. There are, of course, differences, in TEA rates between women of different backgrounds, for example, rural women are more entrepreneurial than their urban counterparts, whereas rural men are no more entrepreneurial than urban men. Even so, the differences are marked. Much of this can be explained in terms of attitudes towards entrepreneurship and Table 11 breaks those attitudes down by gender. The following highlights can be extracted from Table 11: Generally men were much more positive about their skills, more
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