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Monday, February 25, 2013

WHO ARE THE ENTREPRENUERS AND WHERE DO THEY COME FROM?

WHO ARE THE ENTREPRENEURS AND WHERE DO THEY COME FROM?

An interesting article in Small Business Trends, “WhereFuture Entrepreneurs Live Today,” provides some very interesting information on where the entrepreneurial spirit is the strongest, and where such drive is low.

In a study that questioned over 200.000, the rate of people wishing to start their own businesses within the next three years runs from a high of 79% in Uganda, to only two percent in Russia and Japan. The United States is also closer to the bottom, at 13%.

The rates appear to be highest, where economics are in the earlier stages of the growth curve, and lower where economies are advanced. The article states:

As the authors of the GEM report explain, a country’s economic development level matters. In poor countries, a much larger fraction of the non-entrepreneur population intends to start businesses in the future. This pattern is consistent with an argument that I and others have made elsewhere. As countries get richer, the opportunity cost of starting a business rises, reducing the fraction of the population that wants to be self-employed.

While that argument might account for the much higher level of entrepreneurial intentions in Uganda than Japan, it doesn’t explain why 13 percent of non-entrepreneurs in the United States intend to start businesses in the next three years, while only 2 percent in Japan do, or why such a small fraction of Russians plans to start a business in the coming years.

Another factor the article noted is that entrepreneurial ambition was higher in countries where such activity was seen as a “good choice.” 

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