Global Entrepreneurship Monitor says Ireland has third-highest level of early stage activity in EU but development to high-growth firms lags

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Global Entrepreneurship Monitor says Ireland has third-highest level of early stage activity in EU but development to high-growth firms lags
By Finfacts Team
Sep 21, 2007, 08:31

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The Global Entrepreneurship Monitor (GEM) estimates the number of people involved in early stage entrepreneurial activity.

A report has been published today in respect of activity in Ireland in 2006.

Rates of entrepreneurial activity in Ireland among adults (aged between 18 and 64 years) for 2006 were as follows:

The total early stage entrepreneurial activity rate for Ireland in 2006 was 7.4%. For the period 2002 to 2006, the total early stage entrepreneurial activity rate averaged 8.4%.

This means that there were approximately 201,000 people involved in early stage entrepreneurial activity in 2006.
There were approximately 122,000 people attempting to start a new business (nascent entrepreneurs) in 2006.
There were approximately 80,000 people who had been personally involved in starting a new business in the period January 2003 to June 2006.
In addition, there are approximately 214,000 people actively involved in businesses they established prior to 2003.
Looking forward, approximately 269,000 people reported that they would aspire to starting a new business in the next three years.
In terms of closing businesses, approximately 48,000 reported that they had closed a business in the previous twelve months.

Bank of Ireland data shows that 25% of start-ups are in the Construction and Engineering sectors.

GEM reports the age, gender, education, work status and income groups of early stage entrepreneurs. In 2006 GEM finds the following:

AGE: The most entrepreneurial active are those in the age group 25-34, where 10.9% are active as early stage entrepreneurs, and those aged 35-44, where 9.7% are active as early stage entrepreneurs. Rates are 5.2% for those aged 18-24 and 6.3% 45-54. The least active are those aged 55-64, at 2.0%.

GENDER: Entrepreneurial activity rates are much higher among Irish males than females — 10.5% of Irish males, as compared to 4.2% of Irish females. GEM has reported a difference in rates of entrepreneurship between Irish males and females every year for the last five years.

EDUCATION: In Ireland, entrepreneurial activity rates increase with education. Entrepreneurial activity rates are 11.1% for those with post graduate experience, 9.3% for those with third-level qualifications, 7.3% for those who have completed secondary, and 3.7% for those with only some or no secondary education.

Ireland ranks less favourably in terms of those established entrepreneurs (businesses started before 2003) who actually achieved growth of twenty or more employees.

In a group of 22 OECD countries, Ireland ranks 9th in the OECD in terms of the rate of established entrepreneurs who achieved high growth. Countries ranked higher than Ireland are New Zealand, Iceland, Canada, Netherlands, Switzerland, Denmark, and Japan.
Ireland ranks 13th in the OECD in terms of the percentage of established businesses that achieved high growth.

In December 2005, a Bank of Ireland survey showed that only 3% of Irish SMEs are medium size with more than 50 employees. Overseas expansion and exporting are dependant on businesses growing to a medium sized enterprise, yet the research indicated that only 7% of Irish SMEs intended to expand abroad in the following twelve months. This contrasts sharply with the UK where medium enterprises, which employ 30% of the workforce, are the powerhouse of the economy.

Ireland ranks seventh of the twenty two OECD countries in the rate of early stage entrepreneurship, lagging Australia (12.0%), Iceland (11.3%), US (10.0%), Norway (9.1%), Greece (7.9%) and the Czech Republic (7.8%). The OECD average is 6.4%. The rate of early stage entrepreneurship in Ireland is 1.16 times the OECD average. Ireland (7.4%) ranks third in the EU. Greece (7.9%) ranks first, followed by the Czech Republic (7.8%), with Spain ranking fourth (7.3%). The EU average is 6.3%.

Ireland (7.8%) ranks fifth in terms of the rate of established entrepreneurs (owner-managers of businesses started prior to 2003) in the OECD, lagging Turkey (11.4%), Australia (9.1%), Greece (8.2%) and Finland (7.8%). Ireland ranks third in the EU.