SOURCE: Ewing Marion Kauffman Foundation

Ewing Marion Kauffman Foundation

November 19, 2009 08:00 ET

OECD Report on Entrepreneurship Reveals Clear Glimpses of Economic Impact on 2009 Firm Starts and Exits

Kauffman Foundation-Funded Report Shows Sharp Drop in Firm Entry and Significant Increase in Firm Exit in 12 Countries; Timely Indicators Report Is Part of the Second Annual Publication of the Joint OECD-Eurostat Entrepreneurship Indicator Programme

KANSAS CITY, MO--(Marketwire - November 19, 2009) - As part of Global Entrepreneurship Week (Nov. 16 - 22), the Organisation for Economic Co-operation and Development (OECD) today unveiled the first indications of how the economic slump has impacted entrepreneurship in the United States and 11 other countries in 2008 and most of 2009. The report, "Timely Entrepreneurship Indicators," shows that firm formation declined and exits increased, which economists say could have significant implications for job creation.

"Our research shows that new and young firms have been the primary source of new jobs in the United States over the past three decades," said Robert Litan, vice president of Research & Policy at the Ewing Marion Kauffman Foundation, which funded the study. "While business exits are a normal part of a healthy entrepreneurial ecosystem, this study shows a concurrent increase in exits and decrease in formation throughout OECD countries as a whole. This should send a giant red flag to policymakers around the globe to pull out all the stops to encourage and support business startups so we can create new jobs and sustain a worldwide economic recovery."

Timely data on firm entries show a remarkably similar pattern across countries and clearly suggest that the economic crisis has had a significant impact on entrepreneurship. Firm entries have slowed following the economic crisis, although there are differences in timing among countries. The United States and the United Kingdom (and to a lesser extent Spain) observed a decrease in firm entries already in 2007, when most other countries were still reporting a steady rise. The subsequent strong fall in firm entries during 2008 and 2009 has resulted in fewer firm entries than in 2005 (except for France and Belgium). The researchers warn that the data for the first half of 2009 should be interpreted with care, however, given the reported signs of economic recovery in recent months in some countries. The "Timely Indicators" is part of the second-year results of the Entrepreneurship Indicator Program (EIP), which uses official government data to measure performance in 23 countries.

Similar to last year's publication, the 2009 EIP presents indicators on entrepreneurial performance. What's different this year is that the EIP has expanded in breadth and scope to reinforce the multiple measures of internationally comparable data on entrepreneurial activity from 18 OECD countries in 2008 to 23 countries and regions. In addition, the report presents for the first time a broad set of indicators on entrepreneurial determinants (access to finance, regulatory framework, knowledge creation and diffusion, market conditions, entrepreneurial capabilities and entrepreneurial culture), allowing countries to benchmark themselves in terms of entrepreneurial policies and the entrepreneurship environment.

According to the report, Eastern European countries and Brazil -- countries undergoing a high degree of restructuring -- are experiencing higher rates of firm births, deaths and even growth. Employment creation and destruction through firm births and deaths seem to form an important part of the employment churning in countries. The report also shows the services industry having a higher degree of entrepreneurial dynamism compared to manufacturing.

To access the report, visit

The Organisation for Economic Co-operation and Development

Headquartered in Paris, the OECD fosters collaboration among 30 European countries committed to democracy and the market economy. OECD provides economic and social data, forecasts economic developments and tracks trends in technology, trade, the environment and other areas. To find out more about the OECD, go to

The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

Kauffman Foundation

The Ewing Marion Kauffman Foundation is a private nonpartisan foundation that works to harness the power of entrepreneurship and innovation to grow economies and improve human welfare. Through its research and other initiatives, the Kauffman Foundation aims to open young people's eyes to the possibility of entrepreneurship, promote entrepreneurship education, raise awareness of entrepreneurship-friendly policies, and find alternative pathways for the commercialization of new knowledge and technologies. It also works to prepare students to be innovators, entrepreneurs and skilled workers in the 21st century economy through initiatives designed to improve learning in math, engineering, science and technology. Founded by late entrepreneur and philanthropist Ewing Marion Kauffman, the Foundation is based in Kansas City, Mo. and has approximately $2 billion in assets. For more information, visit, and follow @kauffmanfdn on Twitter.

Global Entrepreneurship Week

With the goal to inspire young people to embrace innovation, imagination and creativity, Global Entrepreneurship Week will encourage youth to think big, turn their ideas into reality, and make their mark. From Nov. 16-22, 2009, millions of young people around the world will join a growing movement to generate new ideas and seek better ways of doing things. Tens of thousands of activities are being planned in dozens of countries. Global Entrepreneurship Week is founded by the Ewing Marion Kauffman Foundation and the Make Your Mark campaign. For more information, visit, and follow @unleashingideas on Twitter.

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