1. The Phases and Profiles of Entrepreneurship – Global Entrepreneurship Monitor (GEM)

1.4 Motivations to Start a Business

The motivations for starting a business differ vastly across the globe. Individual drivers are traditionally captured within the GEM framework by setting out necessity-driven entrepreneurship and opportunity-driven entrepreneurship. A necessity-driven entrepreneur indicates in the GEM Adult Population Survey that s/he started the business because there were no better options for work, rather than s/he saw the start-up as an opportunity. For those who did see the start-up as an opportunity (rather than no other options for work), a further assessment was made on the nature of this opportunity. Improvement-driven opportunity (IDO) entrepreneurs are defined as those opportunity-driven entrepreneurs who indicate that the opportunity is to be linked to either earning more money or being more independent, as opposed to maintaining income.
As Figure 9 shows, entrepreneurs in factor-driven economies tend to be driven equally by necessity and improvement-driven opportunity motives. With greater economic development levels, necessity gradually falls off as a motivator, while IDO motives increase. The Swiss indicator for improvement-driven activities lies slightly higher than the average for innovation-driven countries and has remained rather stable over the last three years.

Figure 9:
Percentage of Early-Stage
Entrepreneurs (TEA) Motivated
by Necessity and by Improvement-Driven, 2011

Although the difference in the motivation structure of Swiss female and male inhabitants is not statistically significant, one can state that opportunity-driven entrepreneurship in order to maintain income is more strongly represented among females than among males. IDO motives may be less dependent on the economic environment and of a more intrinsic nature; the individual opts to pursue an opportunity that is believed to increase income and/or independence. One could question whether this kind of motivation can be stimulated by, for example, greater exposure to entrepreneurial opportunities in one’s environment.

Table 3:
Necessity and ImprovementDriven
Opportunity Early-Stage Entrepreneurial
Activity Rates, by Innovation-Driven Countries, 2011

Copyright 2012 R. Baldegger, S. Alberton, F. Hacklin, A. Brülhart, A. Huber and O. Saglam (2012) Global Entrepreneurship Monitor 2011 — Report on Switzerland, Fribourg

“We would dare again, anytime” – Article in the Beobachter with Rico Baldegger as an interview partner

Many may not work their whole life for someone. A lot of people prefer to start their own business to be independent. But it’s not that easy it seems. The fear of failure afflicts the young Swiss entrepreneurs.

Follow the link below to read what came to the table on an interview with Prof. PhD Rico J. Baldegger – Director of the Institute for Entrepreneurship and SME in Fribourg. With his scientific and practical experience and knowledge in Entrepreneurship and Start-ups he joined the interesting discussion.

http://www.beobachter.ch/kmu/kmu-artikel/artikel/jungunternehmen_wir-wuerden-es-jederzeit-wieder-wagen/

1. The Phases and Profiles of Entrepreneurship – Global Entrepreneurship Monitor (GEM)

1.3 Total Early-Stage Entrepreneurial Activity (TEA)

Figure 5:
Total Early-Stage Entrepreneurial Activity (TEA)
in Innovation-Driven Economies, 2011

The Total Early-Stage Entrepreneurial Activity (TEA) rate is defined as the prevalence rate of individuals in the working-age population who are actively involved in business start-ups, either in the phase in advance of the birth of the firm (nascent entrepreneurs), or the phase spanning 42 months after the birth of the firm (owner-managers of new firms). As such, GEM takes the payment of any wages for more than three months as the “birth event” of the firm.

Figure 5 shows the TEA rates for the innovation-driven economies. The 95% confidence intervals help to interpret the differences between countries. They measure the probability that the average value will fall within a certain range. Although the Swiss TEA rate tends to be higher than in neighboring countries such as France or Germany, adopting the 95% certainty, TEA rates of these countries are not statistically different from its Swiss counterpart. Among the comparison group, only the United States differs considerably. After the 2010 cycle, which was strongly influenced by the aftermath of the financial crisis, many Swiss entrepreneurship activity indicators for 2011 turned upward again, with the total entrepreneurial activity (TEA) being one of them. After the all-time low of a Swiss TEA rate in 2010 of only 5%, the most important indicator for entrepreneurial activity once more reaches a normal level (6.6%). This rebound in entrepreneurial activities in Switzerland is reflected across most of the different age categories (Figure 6). Entrepreneurial activity among the adult population older than 35 is again close to the 2009 level, whereas the TEA rate of younger Swiss inhabitants still lags considerably behind the 2009 peak.

Figure 6:
Total Early-Stage Entrepreneurial Activity (TEA)
in Switzerland by Age, 2009-2011

1. The Phases and Profiles of Entrepreneurship – Global Entrepreneurship Monitor (GEM)

1.2 Entrepreneurial Activities

GEM conceptualizes entrepreneurship as a continuous process that includes nascent entrepreneurs involved in setting up a business, entrepreneurs who own and manage a new business, and entrepreneurs who own and manage an established business. In addition, GEM assesses the rate and nature of business discontinuations. As a result, indicators for several phases of the entrepreneurial process are available. Table 2 shows these entrepreneurial activity prevalence rates per phase of economic development. Taken together, these prevalence rates form a first glance of the entrepreneurial dynamics for each of the economies. In the remainder of this section, we elaborate on these phases of entrepreneurial activity. Most attention is paid to the situation in Switzerland, its development over the last years, and the comparison with innovation-driven economies.

Table 2:
Entrepreneurial Activity in
Innovation-Driven Economies, 2011

Copyright 2012 R. Baldegger, S. Alberton, F. Hacklin, A. Brülhart, A. Huber and O. Saglam (2012) Global Entrepreneurship Monitor 2011 — Report on Switzerland, Fribourg

1. The Phases and Profiles of Entrepreneurship – Global Entrepreneurship Monitor (GEM)

This section examines the rate of individual participation in the various phases of entrepreneurship for Switzerland as compared with other innovation-driven countries. We discuss potential entrepreneurs, individuals with the intention of starting businesses, people starting and running new businesses (early-stage entrepreneurs), those running established businesses, and the discontinuation of businesses.

The GEM data collection for Switzerland yields entrepreneurial profiles along three important dimensions. Entrepreneurial attitudes, perceptions, and intentions reflect the degree to which individuals tend to appreciate entrepreneurship, both in terms of general attitudes and in terms of self-perceptions: how many individuals recognize business opportunities, how many believe they have the skills and knowledge to exploit such opportunities, and for how many would fear of failure prevent them exploiting such opportunities? Entrepreneurial activity measures the observed involvement in several phases of entrepreneurial activity. It also tracks the degree to which entrepreneurial activities are driven by opportunity and/or necessity. Moreover, discontinuations of entrepreneurial activity (and the reasons for doing so) are estimated based on the GEM Adult Population Surveys. Finally, entrepreneurial aspirations are of key importance in addressing the (socio) economic impact of entrepreneurial behavior. Of particular interest are those entrepreneurs who expect to create jobs, to be involved in international trade, and/or to contribute to the society by offering new products and services.

1.1 Entrepreneurial Attitudes

Fostering entrepreneurial awareness and positive attitudes toward entrepreneurship is high on Switzerland’s policy agenda. The idea is that evolving attitudes and perceptions toward entrepreneurship could affect those individuals wishing to venture into entrepreneurship. However, the key factor that determines whether someone progresses to entrepreneurship is not the perception of opportunities for start-ups or of (matching) personal capabilities: context also plays a role. Factors such as the availability of (good) job alternatives in an economy can make a difference for those who perceive market opportunities and have confidence in their own entrepreneurial capabilities, and help to determine whether they engage in independent entrepreneurial activity or not. So, while in some societies positive attitudes and perceptions toward entrepreneurship may be instrumental in achieving new (highvalue) entrepreneurial activities, in many others they are certainly not, on their own, sufficient reason for people to choose to engage in entrepreneurial activity. For example, there may be other excellent options available to individuals. Bearing this in mind, we can see in Table 1 how Switzerland compares in terms of entrepreneurial perceptions and attitudes to other innovation-driven economies in general and to the comparison group in particular.

Table 1: Entrepreneurial Perceptions,
Intentions and Societal Attitudes
in Innovation-Driven Economies, 2011

The perceptions of entrepreneurial opportunities in Table 1 reflect the percentage of individuals who believe there are opportunities to start a business in the area they live in. Perceived capabilities reflect the percentages of individuals who believe they have the required skills and knowledge to start a new business. The measure of fear of failure (when it comes to starting your own business) applies to these individuals only. Entrepreneurial intentions are defined by the percentage of individuals who expect to start a business within the next three years (those who are currently already entrepreneurially active are excluded from this measure). For all four measures we should consider that cultural differences and business-cycle patterns are an important explanation for the differences in perceptions across countries.

In the 2011 census the perceived opportunities to start a business are in Switzerland considerably higher than in previous years. This boost in perceived opportunities sets Switzerland apart from neighboring countries and the U.S. Nordic countries, such as Finland, Sweden, and Norway, remain on top when it comes to available opportunities. Switzerland shows, as in previous years, a rather high perception of capabilities paired with a very low fear of failure. While Switzerland’s perception of capabilities is at least as good as or even better than the European benchmark, it still lags behind United States inhabitants’ very strong belief in their own capacity to start a business. The entrepreneurial intentions of Swiss inhabitants (10%) are on a par with the average for innovation-driven countries. Most remarkable are the differences between Switzerland, Germany, and France. While in Germany only 5% of the individuals expect to start a business in the next three years, almost one-fifth of the French think about setting up a new business.

Copyright 2012
R. Baldegger, S. Alberton, F. Hacklin, A. Brülhart, A. Huber and O. Saglam (2012) Global Entrepreneurship Monitor 2011 — Report on Switzerland, Fribourg

Women‘s Participation in Entrepreneurship – Global Entrepreneurship Monitor (GEM)

The structure and nature of entrepreneurial activities not only vary across countries or over time, but gender also plays a determining role in such activities (Acs et al., 2011).
Demographically, Switzerland has an equal proportion of men and women in the 15-64 age groups, which is also the case in most of the other nations in the world (CIA World Fact Book, 2012). However, as a global trend, the number of females engaged in entrepreneurial activity is in most countries historically lower than for their male counterparts, which may well be explained by various social, cultural, or economic factors. In some countries, the number of males participating in entrepreneurial activities can be dramatically higher and the male preponderance is obvious. Pakistan is one such country; there, the number of male entrepreneurs is as much as ten times higher than that of their female counterparts. For example, Rossi (2009) argues that this male preponderance in entrepreneurship is accounted for by the lack of specific business skills, the less extensive social network, and perhaps the lack of identification patterns among women (Rossi, 2009). It can be argued, therefore, that addressing these issues should help increase the proportion of female entrepreneurs.

There also exist a few ‘outlier’ nations where exactly the opposite scenario can be observed, that is, where female entrepreneurs outnumber male entrepreneurs; these
include a couple of countries in Southeast Asia, such as Thailand and Singapore. As well as these extreme cases, however, there are economies where the female and male ratio of early-stage entrepreneurial activity is balanced. Female and male numbers that remain in equilibrium may sound like a desirable scenario since women’s entrepreneurship brings about additional contribution to economic growth, such as job creation and the increased GDP that the global economy is in urgent need of (OECD Report, 2004). This category also includes Switzerland, which is very good news for this innovation-driven economy. Seven
other economies together with Switzerland enjoy the equal participation of men and women in entrepreneurship (others being Panama, Venezuela, Jamaica, Guatemala, Brazil,
Thailand, and Singapore). Actually, in terms of early-stage entrepreneurial activity, Switzerland enjoys one of the best positions (meaning the equalized female-to-male ratio)
when compared with other innovation-driven economies such as those in the Scandinavian countries or the French, German, and even U.S. economies. Switzerland is beaten only by Singapore in this class.

Even better news is that Switzerland shows strong potential to bridge the existing gender gap in entrepreneurial activities. Although progress toward closing the gender gap in Switzerland is comparatively lower within its own class (i.e., the innovation-driven economies), it is hoped that facilitating female entrepreneurship and the existence of strong women entrepreneurs will assist in closing the gender gap and reaching the levels seen in Scandinavian countries (WEF Report, 2011; GEM Global Report, 2011). A higher level can be achieved in Switzerland if certain issues are addressed, such as increasing social services, opportunities, and the acceptance and encouragement of female entrepreneurship.

Figure:
Male and Female Early-Stage
Entrepreneurial Activity 2011,
by Country and Phase of
Economic Development

Copyright 2012
R. Baldegger, S. Alberton, F. Hacklin, A. Brülhart, A. Huber and O. Saglam (2012)
Global Entrepreneurship Monitor 2011 — Report on Switzerland, Fribourg

Gary Hamel – What does management means and why is management related to innovation?

Watch an amazing presentation of Gary Hamel where he speaks about the management of the 21st century. In this 15-minute video essay, Hamel paints a vivid picture of what it means to build organizations that are fundamentally fit for the future.

“Modern” management is one of humanity’s most important inventions, Hamel argues. But it was developed more than a century ago to maximize standardization, specialization, hierarchy, control, and shareholder interests.

http://www.youtube.com/watch?v=K3-_IY66tpI

Swiss International Entrepreneurship Survey (SIES) 2013

Switzerland is well known for its big, successful multinational groups. Therefore, SMEs are often perceived by the public as playing only a secondary role – despite the fact that more than 99% of firms in Switzerland are SMEs and that they account for around 70% of all jobs. A study by the School of Management in Fribourg, led by Professor Rico J. Baldegger, is to examine how Swiss SMEs can be supported in their internationalization activities. This is the third such study since 2007 and 2010.

Companys can complete the questionnaire online at http://www.sies2013.ch in German, French, Italian, or English.

Thank you for helping us by taking between 20 and 40 minutes of your time to complete this survey. The study will help us understand how small and medium-sized Swiss companies internationalize themselves, as well as identify the success factors involved. We would be happy to send you the results of our study. For details on how to receive the results, please see the last page of  the online survey.

The health of entrepreneurs. Is this subject taboo?

How important is the health of entrepreneurs? Etienne Rumo gave an Interview on Radio Fribourg concerning the health of entrepreneurs and the last conference to this subject organized by the School of Management Fribourg.

New Director for the School of Management in Fribourg

Professor Rico J. Baldegger, director of the Institute for Entrepreneurship and SME has been selected to become the new director of the School of Management in Fribourg. We would like to congratulate Prof. PhD Rico J. Baldegger for his new position which starts on May 1^st 2013 and wish him all the best as new director. 

http://cmo.argus.ch/email/1089048/48961754.pdf