International Research Shows Australian Women Lead the Way in Businesses

New research paints a rosy picture of the state of entrepreneurship in Australia, and points to Australian women as being the most entrepreneurial in the world.

The research, compiled by the Australian Centre for Entrepreneurship (ACE) in partnership with the Global Entrepreneurship Monitor (GEM), indicates that last year 10 per cent of the Australian adult population was involved in setting up or owning newly-founded businesses.

ACE Associate Professor Paul Steffens said Australia was second only to the United States in this regard.

“Out of the 23 developed countries surveyed, the US came up trumps with just over 12 per cent with Australia a close second at 10.5 per cent. Even more encouraging is that fewer of these new Australian businesses were born out of necessity – 15 per cent – compared with more than 21 per cent for the US,” he said.

“This is very encouraging and indicates that Australia has been weathering the global financial crisis well.

“Most new businesses started to take advantage of a perceived lucrative business opportunity with only about a fifth started out of a lack of alternative options for work.

“This is significant because it points to a culture of genuine innovation and entrepreneurship.”

Professor Steffens said 19 per cent of those 2000 businesses surveyed intended to grow their businesses and employ more staff over the next five years.

“This sort of optimism places Australia higher than average when compared with other developed economies,” he said.

He said the research results were particularly interesting in relation to women in business.

“With 7.8 per cent of adult women involved in setting up a new business or owning newly founded businesses, Australia ranks number one among developed economies.

“What’s interesting too is that Australia is the only developed economy where men and women are participating virtually equally in this endeavour.

“Australian women put their stronger than average success in new business ventures down to their skills levels and the high media attention for entrepreneurship in Australia which provides them with successful role models.”

Professor Steffens said while having 500,000 women entrepreneurs painted a healthy picture of access to business opportunities for Australian women, businesswomen were still under-represented in the workforce in growth-oriented industries such as mining, manufacturing, finance and IT and this probably accounted for their propensity to start new businesses in service industries.

“Having more women training and employed in these traditionally male-dominated industries would have a significant positive impact on the creation of additional business opportunities for women,” he said.

“The research also shows that while more male entrepreneurs were intending to export their products or services over the next five years, both male and female Australian entrepreneurs were lagging behind the international surveyed average on this account.”

For more information access the GEM 2011 Global Report and the GEM 2010 Women’s Report.

Learning From Failure

The following story appeared in Brisbane’s Courier Mail Newspaper on April 2nd 2012. Written by Rob Kidd, the article was based on a seminar that Dean Shepherd presented for ACE on March 28th, and a subsequent interview.

FAILURE in some aspect of business is as inevitable as the taxman making his monthly mark on your payslip.

But, according to one expert, it needn’t be as depressing.

Dean Shepherd, an Australian who is professor of entrepreneurship at Indiana University in the US and an adjunct professor at QUT Business School, believes valuable lessons should be learned from failed ventures and even individual projects.

“Entrepreneurship is about the pursuit of opportunity. Opportunity only exists in environments of uncertainty, so if we’re pursuing opportunities there’s a high likelihood we’re going to get it wrong and fail,” he said.

“The assumption has always been that you can learn from failure and it will be automatic and instantaneous. (But) that negative emotional element impacts our ability to learn.”

Research from QUT’s The Comprehensive Australian Study of Entrepreneurial Emergence research project (CAUSEE), focusing on about 800 emerging business start-ups, found about half failed within two years.

However, only 12.9 per cent of those involved considered the failure a “negative” experience.

Mr Shepherd, whose own research was inspired by seeing his father’s family business collapse, sees failure as an “integral part of innovation”, and says people should be encouraged to have a go.

“Being wrong is just part of being an entrepreneur. You can’t be an entrepreneur or an innovative company and only hit winners,” he said.

A more extreme method companies used for analysing a failed project was holding a “funeral” or “post-mortem”, Mr Shepherd said.

“They’ll send out an invitation to the wake – it’s a chance for people to get together to say the project is dead, to reminisce about the good times, perhaps to console each other but perhaps also to send the message that it’s time to move on.”

Organisations, he said, would benefit from adopting an “anti-failure bias”.

“In other words, they pursue many projects realising that some are going to fail. But by doing that their mean performance actually increases, so the organisation as a whole performs well,” Mr Shepherd said.

“It’s not a bad thing for a society if we have a lot of failed businesses. What’s bad is if we penalise or stigmatise them so even if they’re in the best position to learn, they never try again.”

CAUSEE Update – November 2011

The Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) project that ACE has been conducting over the past 4 years has just completed its final year of data collection. What this means is that we now have one of the largest longitudinal datasets on Australian entrepreneurial activity.

We have already published a number of industry and academic papers that directly use CAUSEE data. These can be found here.

Our international research teams are actively working on a  number of projects including:

  • The role of action in the venture creation process [Scott Gordon]
  • Entrepreneurial bricolage – business founders’ clever and frugal ways of getting by with very limited resources (and possible negative effects of being overly clever/frugal) [Julienne Seynard and others]
  • The role of business planning in new and emerging ventures [Christophe Garonne]
  • How novelty and relatedness of the business idea affects new venture creation outcomes [DM Semasignghe – ‘relatedness’ = how closely the idea builds on knowledge and resources the founders already have]
  • The development and effects of resource advantages in new ventures [Paul Steffens]
  • Gender and new venture creation [Roxanne Zolin & others]
  • Internationalization of new and emerging firms [Siri Terjesen & industry report]
  • Engaging, Persisting, Progressing and Succeeding at new venture creation: Different milestones, different drivers?
  • Learning and adaptation in the venture creation process [only industry report so far]
  • The role of family in new venture creation [industry report]
  • High potential new ventures [industry report]
  • Business model adaptation [Antonio Dottore]

Additionally there is still great opportunity for additional projects using the data that has already been collected.

We would also like to follow-up on outcomes for all start-ups that were originally included in the survey whether or not they participated in all of the previous four waves. However, like all much of our research, funding is a key component. We would welcome any suggestions, or indeed interest from you in supporting us with additional research using this fantastic dataset.

CAUSEE is proudly supported by:

GEM Australia 2010 National Summary

MAIN CHARACTERISTICS OF ENTREPRENEURIAL ACTIVITY

While 26.6% (N=532) of the population reported some kind of entrepreneurial activity, only 6.4% are involved in early-stage entrepreneurial activity (nascent firm or young firm or both). Of these 6.6% are males and 6.3% females. While 9.1% of the entrepreneurs cannot define a precise reason why they started a new venture, 18.4% did it out of necessity and 72.5% identified it as an opportunity.

In terms of growth aspirations, 16% anticipates 10 or more jobs 5 years after the business has started, while 84% believe it will be less than that. If we look at market size 64.2% do not anticipate any change, 31.8% expect some market expansion, while the remaining 4.1% anticipate a significant increase.

3.8% of the population are owners in start-up efforts and 2.6% own-manage a business that is up to 42 months old. 9% of the population anticipate they will start a new business over the next 3 years.

ENTREPRENEURIAL ACTIVITY & THE ECONOMIC CRISIS

The Global Financial Crisis (GFC) started in 2007, had its peak in the second half of 2008 and is still ongoing. 7.9% of established Australian businesses reported that the GFC positively impacted their activities by providing more opportunities, 41.9% stated no change, and 50.2% were negatively affected. Among early-stage Australian entrepreneurs, only 14.6% perceived a positive impact out of the GFC, while 43.4% saw it as an event that restricted business opportunities.

Out of 42 individuals (2.1%) who decided to exit a business, 31.6% reported the activity not being profitable as the main reason and 6.2% having problems in getting finance, both reasons arguably linked to the GFC. The rest suggested: opportunity to sell (11.7%), another job or business opportunity lined up (9.1%), having planned the exit in advance (6.8%), retirement (14.1%), and personal reasons (20.4%).

The general feeling that the GFC is still not over is validated by 58.9% of established Australian businesses considering the start of a new business today to be even more difficult than it was a year ago (May-Jun 2009), while 32% consider it to be the same. People involved in early-stage entrepreneurial activities are just slightly more positive in their assessment with 36.8% reporting the feeling that starting a new business now would be more difficult than a year ago, and 46.8% consider it to be about the same.

While the GFC is not over yet, people are beginning to see the light at the end of the tunnel as confirmed by significant changes in growth aspirations, especially for early-stage entrepreneurs: 38.5% increased them, 34.7% kept them the same, and 26.8% lowered their growth ambitions. Established businesses also show optimism although they appear to be more cautious with 35.6% lowering growth ambitions compared to a year ago, 37.8% maintaining them the same, and 26.6% increasing them.

GEM IN ACTION

Australia did not participate in GEM in recent (2007-9) years.

List of Australian References mentioning GEM

1)   Parliament of Australia – House of Representatives: Inquiry into pathways to technological innovation http://www.aph.gov.au/house/committee/scin/pathways/report/prelims.htm

2)   Austrade: Innovation means more than better mouse traps http://www.austrade.gov.au/Innovation-means-more-than-better-mouse-traps/default.aspx

3)   Australian Government – Equal Opportunity for Women in the Workplace Agency: 2006 Census of Women in Leadership http://www.eowa.gov.au/Australian_Women_In_Leadership_Census/2006_Australian_Women_In_Leadership_Census/Secure%20site.asp

4)   Victorian Government: Strategic Audit of Victorian Industry http://www.business.vic.gov.au/busvicwr/_assets/main/lib60019/savi_overview.pdf

5)   Department of Education, Training and Youth Affairs: National Youth Entrepreneurship Attitude Survey http://www.innovation.gov.au/Documents/National%20Youth%20Entrepreneurship%20Attitude%20Survey20041122160212.pdf

6)   AusAID: Annual program performance report: Pacific regional program 2008-09 http://www.ausaid.gov.au/publications/pdf/appr-0809-pacific-regional.pdf

7)   Department of Broadband, Communications and the Digital Economy: An Overview of the Australian ICT Industry and Innovation Base http://www.dbcde.gov.au/__data/assets/pdf_file/0012/10353/An_Overview_of_the_Australian_ICT_Industry.pdf

8)   Foundation for Young Australians http://www.fya.org.au/wp-content/uploads/2009/05/seg_final_small1.pdf

9)   The Australian Treasury – Macroeconomic Policy Division: Measuring entrepreneurship http://www.treasury.gov.au/documents/1352/PDF/02_Entrepreneurship.pdf

10)           The Australian Treasury: Economic Roundup Summer 2008 http://www.treasury.gov.au/documents/1352/PDF/combined.pdf

11)           Australian Government – Productivity Commission: Public Support for Science and Innovation http://www.pc.gov.au/__data/assets/pdf_file/0016/37123/science.pdf

12)           Federal Industrial Council of the Retail Motor Industry http://www.workplace.gov.au/NR/rdonlyres/96E4068A-623A-42A6-B27C-80E4E69E2FD3/0/FederalIndustryCounciloftheRetailMotorIndustry.pdf

 

 

List of 2009/10 GEM-related Scholarly Articles by Australian Authors

  1. Luke, Belinda and Verreynne, Martie-Louise and Kearins Kate (2010) Innovative and entrepreneurial activity in the public sector: The changing face of public sector institutions. Public Sector Innovation. 12, pp. 138-153.
  2. Craig, Justin and Moores, Ken (2010) Championing Family Business Issues to Influence Public Policy: Evidence From Australia. Family Business Review. 23, pp.170-180.

 

Global Entrepreneurship Monitor Project

Background of GEM

The Global Entrepreneurship Monitor (GEM) research program is an annual assessment of the national level of entrepreneurial activity. Started as a partnership between London Business School and Babson College, it was initiated in 1999 with 10 countries, expanded to 21 in the year 2000, with 29 countries in 2001 and 37 countries in 2002. GEM 2009 is set to conduct research in 56 countries. From 2010 The Australian Centre for Entrepreneurship Research has been appointed the Australian GEM partner.

The research program, based on a harmonized assessment of the level of national entrepreneurial activity for all participating countries, involves exploration of the role of entrepreneurship in national economic growth. Systematic differences continue, with few highly entrepreneurial countries reflecting low economic growth. There is a wealth of national features and characteristics associated with entrepreneurial activity.

Those new to the research program will find global comparisons, national reports, and special topic reports based on the annual data collection cycle. This material can be downloaded after a few simple items of personal background are provided. Over 120 scholars and researchers are actively participating in the GEM project; those with user names and passwords will have access to the interview schedules, data collection procedures, and other details required for systematic analysis.

In 2005 the National Teams, London Business School and Babson College as a consortium, established an independent, not-for-profit company called the Global Entrepreneurship Research Association (GERA) to oversee the operations of GEM. GERA now owns the GEM brand.

Overview

GEM is the largest survey-based study of entrepreneurship in the world. During the course of its history since 1999, over 60 countries have been involved with the research.

GEM Research has three main objectives:

  • To measure differences in the level of early stage entrepreneurial activity between countries
  • To uncover factors determining the levels of entrepreneurial activity
  • To identify policies that may enhance the level of entrepreneurial activity

The GEM approach

Every year each national team is responsible for conducting a survey of at least 2000 people within its adult population. The Adult Population Survey is a survey of attitudes towards entrepreneurship in the general population but it also asks people whether or not they are engaged in start up activity or own or run a business.

The individual national team surveys are all collected in exactly the same way and at exactly the same time of year to ensure the quality of the data. The individual national team surveys are harmonised into one master dataset that allows users to investigate entrepreneurial activity at various stages of the entrepreneurial process, as well as to study a variety of factors characterizing both entrepreneurs and their businesses in each participating nation and across countries.

Overall,  GEM’s  unique  ability  to  provide  information  on  the  entrepreneurial landscape  of   countries in a global context makes its data a necessary resource for any serious attempt to study and track entrepreneurial behaviour worldwide.
.

Developments in GEM Research

Clearly, entrepreneurship is a complex phenomenon and can be found in a variety of settings and situations. Thus, no single measurement, no matter how precise, can capture the entrepreneurial landscape of a country. As a result, GEM takes a holistic approach to the study of entrepreneurship and provides a comprehensive set of measurements aimed at describing several aspects of the entrepreneurial make-up of a country. In addition to early- Stage Entrepreneurial Activity, GEM identifies  “established  business  owners.” Established   business owners are entrepreneurs who have paid salaries and wages for more than 42 months. Their businesses have survived the most risky stage of the entrepreneurial process and much can be learned from comparing early-stage and established business owners.

GEM also documents entrepreneurial motivation. Thus, business owners are classified as being either necessity-driven or opportunity-driven. In addition, GEM documents the characteristics of all entrepreneurs with respect to product novelty, intensity of competition, employment and expansion plans, and use of technology. Finally, GEM looks at the socioeconomic characteristics of populations; as well as their subjective perceptions and expectations about the entrepreneurial environment.

Australia’s  Role  in  GEM

The Australian Centre for Entrepreneurship Research has from 2010 has become the Australian partner in the GEM Consortium, responsible for both the data collection and reporting on Australian research.

ACE’s  role  in  both  GEM  and  CAUSEE,   (Comprehensive Australian Study of Entrepreneurial Emergence), allows an ideal opportunity to produce extended statistical analysis providing a deeper and broader view of Australian entrepreneurial activity.

 

 


For more information or to further discuss these opportunities further please contact:

Neil James
Executive Manager – External Relations Australian Centre for Entrepreneurship Research Queensland University of Technology (QUT) Phone: 07 3138 1971
Mobile: 0405188664
Email: rn.james@qut.edu.au