Revealed: The World Map of Entrepreneurship

Revealed: The World Map of Entrepreneurship

International accountancy and advisory firm Mazars, in collaboration with the Global Entrepreneurship Monitor (GEM), today launches the findings of the largest global study of high-growth entrepreneurship ever conducted.

The research examines the phenomenon of high-expectation entrepreneurship (HEE): start-up firms expecting to employ at least 20 people in five years time.

This rare group of entrepreneurs accounts for just 7% of global start-up activity, but makes a disproportionately large contribution to economic prosperity and job creation. A mere 1.7% of all entrepreneurs plan to employ more than 100 people within the next five years, yet this ambitious group will create half of all expected new jobs by start-ups worldwide during this period, according to the report.

The GEM/Mazars study analyses entrepreneurial ambition from two perspectives: as a proportion of a country’s overall adult population and of its start-up community. Click here to see representative maps.

China: The New Ambition Capital of The World

China has more high-expectation entrepreneurs than any other country, with 17 in every 1,000 adults rated HEE. Although low-income countries tend to have a lower prevalence of ambitious entrepreneurs, China is an extreme exception, with levels of start-up ambition far ahead of other low-income economies.

Entrepreneurship: An American Dream?

At a regional level, the rate of high-expectation entrepreneurship in the general population is highest in North America (14 in 1,000 adults), with the USA having the second highest prevalence of ambitious entrepreneurs globally. Fifteen in every 1,000 US adults are rated HEE.

However, America could do more to foster high-growth entrepreneurship amongst its entrepreneurial population, according to the GEM/Mazars study.

Looking at the start-up community specifically, America’s entrepreneurs rank only as the world’s fifth most ambitious, with 130 start-ups in every 1,000 rated HEE. This proportion is lower than in Russia (where an impressive 175 in every 1,000 expect high growth); Singapore (168 in 1,000); Israel (146) and neighbouring Canada (137).

Europe: The North-South Divide

Just 4 in every 1,000 European adults are entrepreneurs with high-growth expectations - the lowest proportion of all world regions.

However, both high-expectation and established entrepreneurial activity is generally higher in Northern European countries than among their southerly neighbours.

For example, 9 in 1,000 adults in Ireland are considered HEE, with similar levels in the UK (7 in 1000), Germany (6), and the Netherlands (5), according to the GEM/Mazars findings.

By contrast, Italy (4 in 1,000), France (3) and Spain (2) display a lower prevalence of HEE activity. The lowest proportion worldwide is to be found in Greece, where less than one adult in 1,000 has a high level of entrepreneurial ambition.

A similar picture emerges when examining levels of ambition within Europe’s entrepreneurial communities. Again, Northern European start-ups expect higher growth. German entrepreneurs have the highest expectations, with 119 in 1,000 start-ups rated HEE, followed by Ireland (115 in 1,000), the UK (111) and the Netherlands (106).

By contrast, just 66 of every 1,000 Italian entrepreneurs are considered HEE, with France (56 in 1,000) and Spain (35) lower still. Once more, Greece is bottom of the global ambition ladder, with just 14 in every 1,000 entrepreneurs displaying high levels of growth ambition.

Erkko Autio, Professor in Entrepreneurship and author of the report, comments: “Europe’s limited levels of high-expectation entrepreneurship can be explained by the prevalence of large companies and public sector employers in the region – making high risk ventures a less attractive option.

“While Northern Europe’s strong technology base provides attractive opportunities for entrepreneurs with high-growth ambitions, Southern Europe by contrast has a long heritage of small family businesses, which tend to be less ambitious when it comes to growth.”

Ambition Britain?

Despite being one of Europe’s more ambitious nations, the UK still lags behind many other high-income countries, with 7 in every 1,000 adults considered HEE.

This proportion is significantly lower than high-expectation entrepreneurship levels in the USA (15 in 1,000), New Zealand (14), Iceland (13) and Canada (12).

Alistair Fraser, Global Head of Owner-Managed Business Services at Mazars comments: “With a buoyant UK economy providing attractive career options, large companies often fast track the talented individuals who might otherwise make ideal high-ambition entrepreneurs. Combined with the high opportunity cost of starting a firm in the UK, the risk-reward balance simply doesn’t add up for many ambitious individuals.”

Entrepreneurship and the Economy

The report draws some interesting conclusions about the relationship between entrepreneurial activity and economic activity. While low-income countries generally show higher levels of start-up activity as a whole, high-income nations enjoy a greater proportion of high-growth entrepreneurs among their start-up communities. The report reveals that necessity-driven entrepreneurship in low-income countries tends to engender low-growth ambition. By contrast, high-income countries have higher levels of ambition-driven entrepreneurship, perhaps explained by the fact that individual entrepreneurs require the promise of high returns to risk leaving stable, well rewarded employment.

Quality Before Quantity

The report concludes that not all entrepreneurial activity contributes equally to economic growth. Furthermore, creating policies to foster entrepreneurial activity in general does not encourage the high-growth entrepreneurial activity needed to stimulate job creation and economic acceleration.

Erkko Autio comments: “The key question for policy is not ‘how many’, but rather, ‘who’ starts new firms. Increasing the numbers of new entrepreneurs is not necessarily the key to economic growth. The challenge is to encourage the right individuals - those with high human and social capital - to consider the entrepreneurial option. Instead of offering a little support to everyone, economic policies need to target those few start-ups with the potential and motivation to grow quickly.”

Alistair Fraser comments: “All entrepreneurs are not equal. High-expectation entrepreneurs are a powerhouse for job creation and economic growth.

“Governments across the world need to simplify regulations and invest in educating the next generation about the opportunities entrepreneurship can offer. Including practical financial and business training in higher education curriculums would go a long way to supporting higher levels of entrepreneurial ambition and capability, particularly in countries like the UK where the study shows low or middling ambition.”

“Policy-makers should be aware of the negative economic impact of regulatory frameworks which penalise businesses that are trying to grow.”

About the Study

The Global Entrepreneurship Monitor’s (GEM) 2007 Global Report on High-Growth Entrepreneurship was written by Erkko Autio and produced in association with Mazars, London Business School and Babson College, Massachusetts (USA). Erkko Autio is QinetiQ-EPSRC Chair Professor in Technology Transfer and Entrepreneurship at Tanaka Business School, Imperial College London.

The report examines the growth expectations of nascent, new and established entrepreneurs in 53 countries. The study is based on interviews with 678,714 adult-aged individuals and is the first study to make international comparisons of the nascent entrepreneurial process.

[1] The Global Entrepreneurship Monitor’s (GEM) 2007 Global Report on High-Growth Entrepreneurship was written by Erkko Autio and produced in association with Mazars, London Business School and Babson College, Massachusetts (USA). The research is based on interviews with 678,714 adult-aged individuals in a total of 53 countries.

Contact us


Mazars company logo (tm)

© 2008 Mazars LLP, the UK firm of Mazars, an international advisory and accountancy group.