UWC Colloquium
Monday 15th September
GEM in 1997
GEM in 2014
GEM Study
• Most authoritative and informative study in the world
• Used by policy makers in planning small business policies
• GEM studies individuals, their profile and characteristics such as
perceptions, attitudes, aspirations and intentions
• Fledgling businesses that have not yet started
• New business start-ups
• Established business owners
What makes GEM Unique?
GEM Measures
•TEA…early-stage entrepreneurial activity
- nascent
- new businesses
•GEM distinguishes between
- opportunity
- necessity
- age
- gender
GEM Objectives
• To measure differences in the levels of entrepreneurial activity
between countries
• To uncover factors leading to the enhancement and hindrance of
entrepreneurship
• To suggest policies that may enhance the national level of
entrepreneurship
Total entrepreneurial activity rates in GEM countries, 2013
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Alg
eria
India
Lib
ya
Iran
Vie
tnam
Phili
ppin
es
Bots
wan
a
Ang
ola
Ug
an
da
Gh
an
a
Mala
wi
Nig
eria
Zam
bia
Suri
na
me
Ru
ssia
Mala
ysia
Mace
do
nia
Cro
atia
Pola
nd
Slo
vakia
Hu
ng
ary
Ro
ma
nia
Bosnia
Sou
th A
fric
a
Gu
ate
mala
Lithu
ania
Esto
nia
La
tvia
Ja
ma
ica
Ch
ina
Uru
gu
ay
Mexic
o
Arg
en
tina
Bra
zil
Tha
iland
Pan
am
a
Peru
Co
lom
bia
Ch
ile
Indo
ne
sia
Ecu
ado
r
Ita
ly
Ja
pa
n
Fra
nce
Belg
ium
Ge
rman
y
Spa
in
Fin
lan
d
Gre
ece
No
rwa
y
Slo
venia
Kore
a
Un
ited
Kin
gdo
m
Cze
ch R
ep
ub
lic
Taiw
an
Sw
itze
rla
nd
Port
ug
al
Sw
eden
Pue
rto
Ric
o
Lu
xe
mb
ou
rg
Irela
nd
Ne
the
rla
nds
Isra
el
Sin
gap
ore
Ca
na
da
US
A
Trinid
ad
& T
ob
ag
o
Factor-driven economies Efficiency-driven economies Innovation-driven economies
Relative rankings, 2002 - 2013
Year
SA’s TEA ranking SA’s TEA rate Median Number of positions
above/ below median
2002 20th out of 37
countries
6.3 19 1 below
2003 22nd out of 31
countries
4.3 16 6 below
2004 20th out of 34
countries
5.4 17 3 below
2005 25th out of 34
countries
5.2 17 8 below
2006 30th out of 42
countries
5.3 21 9 below
2008 23rd out of 43
countries
7.8 22 1 below
2009 35th out of 54
countries
5.9 27 8 below
2010 27th out of 59
countries
8.9 30 3 above
2011 29th out of 54
countries
9.1 27 2 below
2012 22nd out of 69
countries
7.3 9.6 12 below
2013
35th out of 67
countries
10.6 10.3 1 above
Perceptions of good opportunities &
capabilities in the adult population, 2001 -
2013
Potential entrepreneurs 2001 2005 2009 2013 Ave SSA
Perceive good opportunities 19.7 27.3 35.4 37.8 74.5
Perceive capabilities 30.4 35.2 35.5 42.7 78.9
2003 2005 2009 2013 Ave SSA
Entrepreneurial intentions 12.2 10.7 13.3 15.4 58.3
Good career choice 48.0* 55.2 63.7 74.0 77.8
High status to successful entrepreneurs 48.0 56.0 64.0 74.7 80.2
Media attention for entrepreneurship 47.5 54.4 63.9 78.4 77.5
Entrepreneurial attitudes in SA towards
entrepreneurial intentions, 2003-2013
Opportunity – and necessity-driven entrepreneurship in
SA, 2001 - 2013
2001 2005 2009 2013 Ave SSA
Necessity-driven (% of TEA) 18.3 39.5 32.7 30.3 38.6 Opportunity-driven (% of TEA) 64.7 57.1 63.7 68.6 57.9 Ration of Necessity vs. opportunity 3.53 1.44 1.94 2.26 1.56
Entrepreneurial activity in South
Africa by gender, 2002 - 2013
2002 2005 2009 2013 Ave SSA
Male - opportunity 3.9 3.4 4.6 8.8 21.7
- necessity 2.2 1.9 2.3 3.3 10.2
- total 7.3 5.9 7.2 12.3 32.4
Female - opportuntiy 2.7 2.1 3.0 5.8 17.3
- necessity 2.6 1.8 1.6 3.1 12.0
- total 5.8 4.5 4.7 9.0 29.9
Motivation for early-stage entrepreneurship by race,
2005 -2013
2005 2009 2013
Black African - opportunity driven 22.9% 49.1% 58.3%
- necessity driven 29.3% 30.1% 27.4%
Coloured - opportuntiy driven 9.3% 3.0% 1.5%
- necessity driven 2.1% 0.6% 1.2%
Indian - opportunity driven 6.4% 1.8% 1.8%
- neccesity driven 3.6% 0.6% 0.9%
Whites - opportunity driven 19.3% 9.7% 7.3%
- necessity driven 3.6% 1.2% 0.9%
2001 2005 2009 2013 Ave SSA
None 0.0 0.0 13.2 5.1 30.1
Some secondary 45.5 42.5 29.9 33.4 30.6 Secondary degree 43.2 44.6 42.5 48.2 23.9
Post secondary 11.3 12.9 14.4 13.3 15.5
Distribution of educational levels for TEA in South Africa,
2001 -2013
Youth findings
“Where I live working
for the government
is the best way to
earn a good living”.
67%
of the youth
agree with
this statement
“Young adults
that start
their own
business
have to work
too hard for
little money”.
61%
of the
youth
agree with
these
statements
“Young adults
start their
own
business
because
they cannot
find a job”.
TEA
Male 13.1%
Female 8.9%
40%
Believe a
young
woman’s
primary
responsibility
is to start and
maintain a
family
34% Believe men
should earn more than
women and that young
women are disadvantaged
in starting a business due
to religious and or cultural
beliefs
Policy
Necessity
-Driven
businesse
s
High-growth
businesses
Opportunity-
driven
businesses
Policy
Necessity-
Driven
businesses
High-growth
businesses
Opportunity
-driven
businesses
Policy
Necessity-
Driven
businesses
High-
growth
businesses
Opportunity-
driven
businesses
• Poor quality with respect to primary and secondary education
• High drop out rate with respect to education
• Extremely low levels of students taking maths & sciences
• Poor quality of maths and science education
• Low levels of potential and intentional entrepreneurs
• Low levels of conversion from early-stage business to
established businesses
• High business failure rates
• High levels of corruption & nepotism
• High levels of crime
• Credibility in eyes of overseas investors
• Unemployment & underemployment
Challenges facing South Africa, 2014