Global

Global Entrepreneurship
Entrepreneurship Monitor
Monitor
(GEM)India
(GEM)India Project
Project

Dr
Dr Gautam
Gautam Dutta
Dutta

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Introduction
Introduction to
to GEM
GEM
The Global Entrepreneurship Monitor (GEM) project is a multicountry research project aimed at assessing the level of
entrepreneurial activity in the participating countries and linking
it to the entrepreneurial framework conditions (EFCs) and their
projected economic growth on the other.
The project ,initiated in 1999, has been coordinated by London
Business School, UK, and Babson College, USA,
Ten countries in 1999, 21 in 2000, 28 in 2001,37 in 2002 and 35 in
2005
India has participated during 2000, 2001,2002 and 2006.

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Major
Major Objectives
Objectives of
of GEM
GEM
Measure and benchmark the level of
entrepreneurial activity among different countries
Examine the factors that may have led to some
countries having higher levels of entrepreneurship
than others
Identify what can be done to enhance the national
level of entrepreneurial activity
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The
The GEM
GEM Conceptual
Conceptual Model
Model

The main hypothesis of the GEM research project is that the level of
entrepreneurial activity in a country has a backward linkage to the quality of
the entrepreneurial framework conditions in the country and a forward linkage
to the countrys economic growth. A simplified version of the GEM
Conceptual Model is as below:

Entrepreneurial
framework
conditions

Level
of
Entrepreneurial
activity

Economic
growth

The Causal relationships implied in the model are at two levels: (1) the
supportiveness of the entrepreneurial framework conditions
influences the level of entrepreneurial activity, and (2) the level of
entrepreneurial activity influences economic growth.
At the level of individual countries, the GEM research effort is mainly a
fact-finding mission to ascertain the supportiveness of the
entrepreneurial framework conditions and the level of entrepreneurial
activity in the country.
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GEM conceptual model

General National Framework Conditions

Openness (External Trade)
Government (Extent, #Role)
Financial Markets (Efficiency)
Technology, R&D (Level, Intensity)
Infrastructure (Physical)
Management (Skills)
Labor Markets (Flexible)
Institutions (Unbiased, Rule of Law)
Social,
Cultural,
Political
Context

Entrepreneurial Framework Conditions

Financial

Government Policies

Government Programs

Education & Training

R&D Transfer

Commercial, Legal Infrastructure

Internal Market Openness

Access to Physical Infrastructure

Cultural, Social Norms

Opportunities for New Venture Creation,

Entrepreneurial Capacity,

Intellectual Property Rights (IPR) Law

and Enforcement,

Facilitation for Women Entrepreneurs.

Entrepreneurs.

Major
Established Firms
(Primary Economy)
Micro, Small, and
Medium Firms
(Secondary Economy)

Entrepreneurial
Opportunities

Entrepreneurial
Capacity
Skills
Motivation

National
Economic
Growth
(GDP, #Jobs)

Business
Churning

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GEM research activities

Adult population surveys

Random sample of adults, 2,000 or more
Identify grass roots entrepreneurial activity

National expert interviews

Completed by national teams
18-70 per country

National expert questionnaires

Follows personal interview
Standardized, multi-item indices

Standardized national data

IMF, World Bank, UN, OECD, etc.

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Total entrepreneurial activity (TEA) index

Based on survey of adults in the population
Count those in start-up process
Active
Will own all or part of the business
No salary/wage payments for over 3 months
Count those owning/managing a new firm
Active in management
Own all or part of the business
Salary/wage payments 3-42 months
Add them together for the TEA index
Count once if person doing both, as 5% are

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Persons Per 100 adults, 18-64 yrs Old

(95% Confidence Interval)
25.0

20.0

15.0

10.0

5.0
All Countries

Japan
Russia
Belgium
France
Hong Kong
Croatia
Sweden
Chinese Taipei
Poland
Finland
Netherlands
Slovenia
Spain
Germany
United Kingdom
Italy
Singapore
Denmark
South Africa
Hungary
Israel
Switzerland
Australia
Norway
Canada
Ireland
U.S.A.
Iceland
China
Mexico
Brazil
New Zealand
Argentina
Korea
Chile
India
Thailand

Total entrepreneurial activity (TEA) by country

0.0

210

Persons Per 100 adults, 18-64 yrs Old

(95% Confidence Interval)
10.0

5.0

15.0

25.0

India
Thailand
Group Average

O F

China
Korea

A D V A N T A G E

Mexico
Brazil
Argentina
Chile
Group Average

New Zealand
Group Average

20.0

South Africa
Australia
Canada
U.S.A.

Belgium
France
Sweden
Finland
Netherlands
Spain
Germany
United Kingdom
Italy
Denmark
Israel
Switzerland
Norway
Ireland
Iceland
Group Average

Russia
Croatia
Poland
Slovenia
Hungary
Group Average

Japan
Hong Kong
Chinese Taipei
Singapore
Group Average

E N T R E P R E N E U R I A L
N A T I O N S

Total entrepreneurial activity (TEA) by global region

0.0

211

E N T R E P R E N E U R I A L

A D V A N T A G E

O F

N A T I O N S

Opportunity vs. necessity

Are you involved
To take advantage of a business opportunity or
Because you have no better choices for work?
Willing volunteers or draftees?

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Persons Per 100 adults, 18-64 yrs Old

(95% Confidence Interval)
20.0

18.0

16.0

14.0

12.0

10.0

8.0

6.0

4.0

2.0

A D V A N T A G E
O F

All Countries

Japan
Russia
Belgium
Croatia
Hong Kong
France
Poland
Sweden
Chinese Taipei
Italy
Slovenia
South Africa
Spain
Finland
Germany
Hungary
Netherlands
United Kingdom
Singapore
Israel
China
Brazil
Denmark
Switzerland
Australia
Argentina
Canada
Norway
Ireland
Mexico
Chile
Iceland
Korea
U.S.A.
New Zealand
India
Thailand

E N T R E P R E N E U R I A L
N A T I O N S

Opportunity-based entrepreneurial
activity by country

0.0

213

Persons per 100 Adults, 18-64 Yrs old

(95% Confidence Interval)
7.0

6.0

5.0

4.0

3.0

2.0

1.0

10.0

9.0
Chile
China
Argentina
Brazil

A D V A N T A G E
O F

All Countries

France
Spain
Belgium
Finland
Denmark
Norway
Italy
Japa
n
Netherlands
Russia
Chinese Taipei
Sweden
United Kingdom
Croatia
Iceland
Singapore
Switzerland
Canada
Germany
U.S.A.
Hong Kong
Poland
Ireland
Israel
Slovenia
Australia
Hungary
New Zealand
South Africa
Mexico
Thailand
Korea
India

E N T R E P R E N E U R I A L
N A T I O N S

Necessity-based entrepreneurial
activity by country

8.0

0.0

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The
TheGEM
GEMResearch
ResearchMethodology
Methodology

In order to assess the supportiveness of entrepreneurial framework

conditions in a country, it was necessary to define the 14
components of EFC. Data were collected by an international
consortium of researchers.:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Financial Support to New Firms

Government Policy on New Firms
Government Programs for New Firms
Education and Training Support
Research and Development Transfer
Commercial, Legal and Professional Infrastructure
Market Openness and Ease of Entry
Adequacy of Physical Infrastructure
Appropriateness of Social support
Cultural Norms
Opportunities for New Venture Creation,
Entrepreneurial Capacity,
Intellectual Property Rights (IPR) Law and Enforcement,
Facilitation for Women Entrepreneurs.

Data on the above 14 dimensions were collected by way of experts assessment.

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