Investment climate; entrepreneurship international comparison 1990-2012

Table explanation

Description topics

Business ownership rate

The rate is defined as the number of entrepreneurs as a percentage of the employed and job seeking labour force. Entrepreneurs are defined as: all owners of companies managing the company and where for the concerning persons entrepreneurship is the main activity. This definition includes therefore both self-employed persons of non-legal bodies, and directors/large shareholders of legal persons. The rate excludes the agricultural sector.

Source: EIM, on the basis of Labour Force Statistics database (LFS) of the OECD and additional figures of Eurostat.

The OECD uses no uniform definition of entrepreneur in the LFS, but the definition in use in the country concerned. The result is that country
figures are not fully comparable. Besides, the statistic has a lot of breaks in the time series. EIM has developed a method to compare data from several countries with each other on the basis of an uniform definition. EIM examined which definition of an entrepreneur is used by the various countries in various statistics. Then for one year raising factors, c.q. split-off factors have been determined per country (mostly for the year 1992) to reach an uniform definition. In some countries (among which The Netherlands and the USA) estimates have been made for the directors/large shareholders, whereas for some other countries estimates have been made of the so-called cooperating family members who have been deducted from the number of entrepreneurs in the statistics. The raising factors and split-off factors have been kept constant in the time for a number of countries for lack of information per year. In addition, corrections have been made for the time series discontinuities in the OECD material by taking in the year of the times series discontinuity the average development of the preceding and the following year as the growth figure. Up to 1991 Germany refers only to West Germany. The later years concern the reunified Germany.

Total entrepreneurial activity index

Young and upcoming entrepreneurship (TEA index).
The TEA index is the sum of the number of persons starting a business (starting entrepreneurs) and the number of owners of businesses that were established less than 3.5 years before the reference date (young entrepreneurs), as a percentage of the labour force. In the TEA index only establishments of legal bodies are counted (Ltd. or plc for example).

Source: EIM, Global Entrepreneurship Monitor (GEM).

The Total Entrepreneurial Activity Index (TEA-index) is an index for the degree of new entrepreneurship by country and is calculated as the percentage of people who undertake such activities in comparison to the labour force (population aged 18 to 65 years). The GEM started in 1999, on the initiative of 10 countries. Since 2001 the EIM has taken part in the GEM within the programme 'MKB en Ondernemerschap' (SME and Entrepreneurship). Annually more than thirty countries take part in this study, among which 20 OECD countries, so that a good international comparison is possible of the degree of new entrepreneurship and of the investment climate.

Business demography

The definitions for births and exits of companies used here differ from the definitions used elsewhere for figures published by Statistics Netherlands for the Netherlands. In the national figures Statistics Netherlands only counts companies where at least 1 person works at least 15 hours a week or more. In this international comparison a company is counted when at least 1 person works at least 1 hour a week. The differences are shown in the figure below.
International comparison (this table):
Population: businesses excluding agriculture and fishery (NACE Rev 3.1 sectors C-K; N-O). Health care is included; government and education are not. The NACE Rev 3.1 is the English-language Standard Industrial Classification, which is used by Eurostat.
Entity: Legal unit
Definition birth: Starting enterprises and new daughters, when active.
Definition exit of a company: Active companies stopping or going bankrupt. Mergers and take-overs are not counted, except for single owner companies.
Definition active company: At least 1 person works 1 hours or more a week in the company.
National Statistics Netherlands figures (published elsewhere):
Population: Businesses excluding enterprises in agriculture, fishery, financial institutions, government and the subsidised sector.
Entity: Company Definition establishment: New economically active companies. Continuations of one or more existing companies (merger, take-over, independence, change of owner or name) are not considered new.
Definition exit of a company: The company is no longer part of the active business population in year (t+1), whereas it was in the previous year (t). An additional condition is that no other companies are involved in the event. That is, a change in structure (merger, take-over, split, separation) does not count as the exit of the company.
Definition active company: At least 1 person works 15 hours or more a week.

Source: EIM, International Benchmark on Entrepreneurship.

Births of enterprises

Number of establishments of enterprises.

Source: EIM.

Births, total

Total, relative

Exits of enterprises

Number of enterprises that stopped.

Source: EIM.

Exits, total

Total, relative

Balance of births and exits

The difference between the number of gross births and exits of enterprises.

Source: EIM.

Balance

Balance, relative

Propensity towards entrepreneurship

Percentage of people interviewed (sample of residents of the European Union and some other countries, among which the United States, Norway and Iceland) who prefer being an entrepreneur over being an employee. The exact wording of the question was: Suppose you could choose between different kinds of jobs, which one would you prefer:
being an employee;
being self-employed;
none of these.
The European Union consists of the following countries. The year in which they joined is shown between brackets: Austria (1995), Belgium (1958), Bulgaria (2007), Cyprus (2004), Czech Republic (2004), Denmark (1973), Estonia (2004), Finland (1995), France(1958), Germany (1958), Greece (1981), Hungary (2004), Ireland (1973), Italy (1958), Latvia (2004), Lithuania (2004), Luxembourg (1958), Malta (2004), the Netherlands (1958), Poland (2004), Portugal (1986), Romania (2007), Slovakia (2004), Slovenia (2004), Spain (1986), Sweden (1995), and the UK (1973).

Source: European Commission; Flash Eurobarometer 160 'Entrepreneurship' (2004) and Flash Eurobarometer 192 'Entrepreneurship survey' (2007).
Note: the higher the percentage, the more entrepreneurship is preferred over being an employee.

Self-employment rate

Self-employed persons include employers (with personnel), own-account workers, members of producers' co-operatives, and unpaid family workers (this last group is particularly important in farming and retail trade). Company directors are not considered to be self-employed entrepreneurs. Someone is part of the employed labour force when he or she is 15 years or older and works more than 1 hour a week.

Source: OECD, Factbook 2010.

Men

Share of male employed persons that is an entrepreneur.

Women

Share of female employed persons that is an entrepreneur.