Thursday, July 25, 2013

25/7/2013: Entrepreneurship in Ireland, 2012

Here's a recently published report on entrepreneurship in Ireland (data through 2012):

Some points of note, quotes direct from the text, italics emphasis is mine:

"Less positive trends…….
  • The general perception of opportunities for new businesses by people in Ireland continues at historically low levels and is far below that pertaining across the OECD and EU.
  • The aspiration to become an entrepreneur remains low, and is far below that generally observed across the OECD and EU, at a time when the perceived need for entrepreneurs is greater than ever.
  • Fewer people are currently planning and starting new businesses in Ireland. This is particularly the case among men.
  • In respect of early stage entrepreneurs, Ireland’s position relative to other European countries has significantly declined.
  • The prevalence of early stage entrepreneurs in Ireland is at historically low levels and is half of what it is in the United States.
  • The level of early stage entrepreneurs that are motivated by necessity continues at a high rate.
  • A marked lowering of growth ambition may be observed among men starting new businesses.

More positive trends…..
  • Successful entrepreneurs continue to be well considered in Irish society, and success at entrepreneurship is considered to confer considerable status.
  • There is a growing general perception of supportive coverage by the media of entrepreneurs and their activities.
  • The educational attainment level among early stage entrepreneurs in Ireland is one of the highest internationally.
  • More than half of all early stage entrepreneurs are focused on overseas markets and many expect a significant number of customers to be from overseas markets.
  • The growth expectations among women entrepreneurs have considerably increased and there is no longer a significant gender gap in this area.
  • The prevalence of owner managers of established businesses in Ireland is higher than it is across the OECD and EU.
  • The level of growth expectation among early stage entrepreneurs remains at a high level."
Another point of interest: "Early stage entrepreneurship is higher among immigrant groups (7.2%) than it is among the non-immigrant population (5.8%) (Table L). This is the case in the other EU-15 countries, with the exception of the Netherlands. Immigrant early stage entrepreneurs are typically motivated by opportunity (73%), which is also the case for non-immigrant entrepreneurs (70%). More specifically, a higher percentage of first generation (3.0%) and second generation immigrants (2.9%) have recently started a business in Ireland, compared to the non-immigrant population (2.2%)."

Role of the recession: "Almost a third of those consulted identified the recession and continuing high rates of unemployment as fostering entrepreneurial activity. The view is that the high unemployment rate has reduced the fear of failure as a deterrent, as people have little to lose. The high unemployment level is forcing people to consider starting up. This point ties in with the continuing high levels of necessity entrepreneurship identified in the 2012 GEM research"

It is worth noting that involuntary entrepreneurship (due to lack of employment) is usually associated with poorer business outcomes.

On funding side: "Informal investors play a vital role in the development of new businesses. In Ireland in 2012, 3.7% of adults reported having provided funds in the past three years (June 2009 to June 2012) to a new business started by someone else. This rate was broadly similar to that reported in 2011 (3.2%). Informal investment is more pervasive in the US (5.4%), across the OECD (4.6%) and the EU-27 (4.5%). The rate in Ireland is more on a par with the EU-15 average (3.4%). The great majority (81%) of the 36,000 individuals, who provided funds as informal investors in Ireland in 2012, provided them to family, friends or work colleagues. Instances of providing investment to entrepreneurs unknown to the investor were much less common (19%)."

Some summary stats:

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