SOURCE: Kauffman Foundation

November 13, 2008 10:00 ET

A New Global Measurement for Entrepreneurship

Kauffman Foundation-Funded Report Establishes Comparable Data on Business Entry, Growth and Exit, Providing New Data to Understanding Economies and Driving Growth

KANSAS CITY, MO--(Marketwire - November 13, 2008) - With funding and cooperation from the Ewing Marion Kauffman Foundation, the Organization for Economic Co-operation and Development (OECD) developed a new tool to empower research-based decision-making on government policies involving entrepreneurship.

The creation of the OECD-Eurostat Entrepreneurship Indicators Program (EIP) was a joint effort of the OECD, a consortium of 30 industrial democracies, and Eurostat, the statistical office of the European Communities. In 2005, the Kauffman Foundation provided the OECD the financial support for a feasibility study to explore what could be done to improve entrepreneurship data. Seven countries -- Canada, Denmark, the Netherlands, Finland, Norway, Sweden and the United States -- added financial and intellectual support for the work. In 2007, Eurostat formally joined forces with the OECD to create the joint OECD-Eurostat EIP, whose aim is to create a durable, long-term program of policy-relevant entrepreneurship statistics.

The EIP establishes multiple measures of internationally comparable data on entrepreneurial activity in 18 OECD countries, based on information produced by national statistical offices according to internationally agreed definitions. Policy-makers and citizens alike can now measure their countries' entrepreneurial performance, and compare it with other countries.

"Economic policy should be based on comprehensive and comparable data. But with regard to entrepreneurship, which is vital in the context of the current economic crisis, policy makers literally have been driving blind," said Robert Litan, vice president of Research & Policy at the Kauffman Foundation. "Now we can make common comparisons of entrepreneurial activity from one nation to another. This will provide clearer analysis of the impact of government policies and programs designed to support and encourage business startups."

The first data digest based on the EIP, "Measuring Entrepreneurship: A Digest of Indicators," has now been released. Entrepreneurial activity in 18 different nations is compared and contrasted in the report, available at www.oecd.org/statistics/entrepreneurshipindicators.

According to the report, new EU countries that underwent structural changes in their economies saw significant entrepreneurial activity. Countries like Lithuania, Estonia, Latvia, Hungary, Romania and the Slovak Republic created a greater number of "employer firms" (those with at least one employee) and high-growth firms than in most other countries.

Findings for the developed countries in the report show some indicators with little variety and others with great differences. The one-year survival rate for new employer enterprises ranges from nearly 85 percent in Canada to nearly 60 percent in the Netherlands. The share of high-growth enterprises as a percentage of enterprises with 10 or more employees, for example, shows big differences between manufacturing and services. The United States has close to 5 percent in both industry classifications, but countries such as Denmark, Finland and Italy show nearly twice as many high-growth enterprises in services than in manufacturing.

The release of the entrepreneurship data coincides with Global Entrepreneurship Week, a first-ever collaborative effort of more than 75 countries to highlight the importance of entrepreneurship to young workers and college students and to encourage more of them to become more innovative and entrepreneurial.

About the 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.

About OECD

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 www.oecd.org.

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.

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