REVIEW PAPER

A Framework for Addressing and Measuring Entrepreneurship

by Nadim Ahmad and Anders Hoffman

Entrepreneurship Indicators Steering Group

1. Introduction

Before discussing deeper about the framework and measurement for

entrepreneurship, firstly will be explained the importance of the
Entrepreneurship itself. Entrepreneur nowadays very affected in economical
growth, employment, and productivity for many countries. Both in media and
politic area Entrepreneurship already has it’s own place. in its development,
policies and regulation were made to increasing, recognizing, and improving
entrepreneur environment. But there is still no an internationally accepted and
comparable definition of entrepreneurship, the situation regarding the availability
of indicators has begun to improve in recent years.

Many countries start to recognize entrepreneurship by making the policies

to improve the measurement of entrepreneurship at national level. At
international level program by the World Bank, Eurostat and private organisations
such as the Global Entrepreneurship Monitor have also started to develop
internationally comparable data. But sometime those effort still not treally
effective since all recognize that entrepreneurship is a multi-faceted phenomenon
of which they measure one or some aspects.

2. Entrepreneurship Measurement Framework

In this part, the paper explain how the importance of policies and a
framework to be made as basis for international comparable indicator for
entrepreneurship.
Some countries turn to the OECD and make any guidance in developing
such framework. These initiatives and led the OECD to create an
Entrepreneurship Indicators Program. Indeed it is not running smoothly, some
challenge appears, Entrepreneurship is a phenomenon that manifests itself
throughout the economy in many different forms with many different outcomes,
and these outcomes are not always related to the creation of financial wealth, for
example they may be related to increasing employment, tackling inequalities, or
indeed, increasingly, environmental issues. That is why OECD just concern with
business related entrepreneurship and ignore social entrepreneurship. It is just to
specified the policies only about business related entrepreneurship.

OECD defining three components in entrepreneur which is, Entrepreneur,

Entrepreneurial activity, and entrepreneurship. From those definition we can
clearly distinguish the different among each term. After that, we also can know
that entrepreneur is not merely about small business, but entrepreneur is a
definable phenomenon with the characteristic relate
to the processes through which it is manifested, namely, the creation of value
through the identification and exploitation of new products, processes, and
markets and this is not uniquely the preserve of small companies or
entrepreneurs, important though these are to the entrepreneurial process.

Framework for Entrepreneur Indicator

For simplicity however, and to assist interpretation, the basic idea behind the
Conceptual Framework can be illustrated by means of an analogy. Passengers
want to get from A to B by time t (reflecting the policy objective, Impact). There
are various means of transport available, some more costly than others, with
each means having many variants, (engine size, fuel consumption etc, which
collectively form the Determinants). During the journey, passengers are informed
whether they are heading in the right direction and on time via speedometers
and GPS readings, (the Performance indicators). Different passengers (policy
makers) will, of course, want to go to different places and get there at different
times (different Impacts), using, whether by design or necessity, a mode of
transport (Determinant) that reflects the price they‘re willing to pay for a certain
level of comfort.

Determinant Entrepreneurial Impact

Performance
s
 As we can see the figure above, it shows that in the framework there is a
determinant as the tools the determine how a variable can affected the
performance of the entrepreneurial and make the impact for the society.

3. Impact of Entrepreneurship

In this paper is said that, the major social and economic objectives related to
entrepreneurship in the context of this framework have been identified as job
creation, economic growth and poverty alleviation. The analyst and the policy
maker wan to se whether it is a correlation between ‘determnants’ and
‘entrepreneurial performance’ with the ‘impact’.

To identify the ‘impact’ is limited. But determinant can be increased in the

performance indicator that can measure the impact of one policies.

Categories for determining the impact is by considering the;

 Job creation
 Economic growth
 Poverty reduction

Determinant Entrepreneurial Impacts

Performance
Job creation
Economic growth
Poverty Reduction

4. Entrepreneurial Performance
Here is explained that in Entrepreneurship have different problem that
they face, depend on the type of the entrepreneur. So, segmentation for the
types of entrepreneur need to be made because of First, it is difficult to identify
measures that will capture all entrepreneurs, for example, especially on a
comparable basis across all countries in the short-term, although this is a longer
term objective. Second, the total population of entrepreneurs are engaged in
many different types of entrepreneurial activities and only some of those will be
of interest to a given country's policy-makers. Then the analyst can make the
policy that can distinguish between the different types of entrepreneurship and
their different impact.
Entrepreneurial performance indicator
Determinant Entrepreneurial Impact
Performance
Firm Job creation
Employment Economic Growth
Wealth Poverty reduction

it is clearly distinguish the performance of entrepreneurial from their impact. For

determining the impact, it can’t use single indicator because entrepreneurial face
many problem in different area.

From those opinion that state about factor that affect entrepreneur and
entrepreneurship, there are 3 main factors that really affect entrepreneur and
entrepreneurship; opportunities, skilled people and resources and these 3 factors
impacted by two important factors; regulatory framework, and culture.

Simple explanation from each factors is;

Resource; the most important in doing entrepreneur, the resource is capital and
RnD, that can cover the business also find new market, product or any other.
Skilled people; the human resource.
Opportunities; it is about the market condition.

Those factor happen in entrepreneur affected by the regulatory

framework because it can limit the entrepreneur to develop their business, other
thing is culture , sometime can be an opportunity but sometimes also can be a
threat.
Those five factors is the determinants that very affect the entrepreneurial
performance.

Entrepreneurial Impacts
Determinants Performance

Regulat R&D Entrep Cultu Acces Mark Firms Job Creation

ory and reneur re s to et
Framew techno ial finan condi Employmen Economic
ork logy Capabi ce tion t
Wealth Growth
Poverty
lities
reduction
5. Conclusion
From this review can be concluded that Entrepreneur take an important
part in Economic field, but there is still no clear regulation or any framework
for Entrepreneur because it is quite difficult to determine the indicator since in
entrepreneurship is multi-faced nature. Determinant affect entrepreneur
performance and then the impact. The analyst should make the appropriate
policy that could be implemented in any types of entrepreneurship. To
determine the indicator in every factors, it can be broken down brom the
narrower area, for example look into the impact firs, then after knowing what
impact that will be given, then determine the object that can perform those
impact. Then see the things or main factor in the determinant whether it
already have a suitable condition or not.
 Entrepreneurship
Journal Review
“A Framework for Addressing and Measuring
Entrepreneurship”

by Puti Annisa Fauzi

1410532066
International Accounting