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Group structure

By Joanne Wilson,2014-07-09 13:31
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Group structure ...

    Group structure:

    1. Churilova Elena (echurilova@bk.ru)

    2. Shuklin Vladimir (shuklin.vladimir@gmail.com)

    Research theme:

    “Enterprise potential of Russia and Belgium: the comparative analysis of environ-

    ment for early entrepreneurship activities (based on "Global Entrepreneurship Monitor" APS data, 2006-2007)”

    Importance.

    Especially globalization process makes important the still existing disparities in entrepre-neurship framework conditions between Western Europe and some emerging market economies like Russia (including SME). Perceived conditions for business start-up are one of the compo-nents, which have the biggest influence on the decision to start-up a venture. In this paper we intend to carry out the comparative analysis of perceived framework entrepreneurship conditions based on GEM APS data between Russia and Belgium.

    Novelty.

    Novelty of the proposed research is defined by the absence of such comparative studies between Belgium and Russia,

    Object and subject of research.

    Object of our research is the population of Belgium and Russia. Our subjects are both the estimation of conditions of starting-up and developing a business by the population, and the fac-tors influencing this estimation of conditions.

    Aim of the project

    To reveal a parity of conditions for development and the business beginning in Belgium and Russia, and to define the factors influencing an estimation of conditions.

    Research problems.

    1. To define and compare level of estimation of conditions to start-up and continue a business in Russia and Belgium.

    2. To explore the socio-demographic characteristics influencing perception of framework conditions to start-up and continue a business in Russia and Belgium.

    3. To explore the economic characteristics of the country influencing perception of framework conditions to start-up and continue a business in Russia and Belgium.

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    4. To define and differentiate level of fear of starting-up a new venture in Russia and Belgium.

    5. To detect, how the experience of enterprise activity influence on the level of fear of starting of new business in Russia and Belgium.

    Research model

    The Global Entrepreneurship Monitor started in 1999. Now this worldwide project in-volves researchers from all over the world. For the 2003 study 31 countries were included in the analyses. In terms of the scale and scope, GEM represents the largest global research project in entrepreneurship currently being undertaken anywhere in the world.

    GEM is a major research project aimed at describing and analyzing entrepreneurial processes within a wide range of countries. In particular, GEM focuses on three main objectives:

    To measure differences in the level of entrepreneurial activity between countries

    To show factors determining the levels of entrepreneurial activity

    To identify policies that may enhance the level of entrepreneurial activity

    Entrepreneurship is a complex phenomenon that spans a variety of contexts. The varied definitions in entrepreneurship literature reflect this complexity. In line with its objectives, GEM takes a broad view of entrepreneurship and focuses on the role played by individuals in the en-trepreneurial process. Unlike most entrepreneurship data sets that measure newer and smaller firms, GEM studies the behavior of individuals with respect to starting and managing a business. This differentiates GEM from other data sets, most of which record firm-level data on (new) firm registrations. New firms are, most often, started by individuals, and individuals typically deter-mine the entrepreneurial attitude of established businesses, regardless of size. Another important aspect is that, from the start of the project in 1999, GEM views entrepreneurship as a process and considers people in entrepreneurial activity in different phases, from the very early phase when businesses are in gestation to the established phase and possibly discontinuation of the business. An individual entrepreneur who has succeeded in maintaining a business has gone through a process, and the characteristics of his or her actions are a very useful way to study entrepreneuri-al behavior. The entrepreneurial process starts before the firm is operational. Someone who is just starting a venture and trying to make it in a very competitive market is an entrepreneur de-spite not having high-growth aspirations. On the other hand, an established business owner may have been in business for quite a number of years and still be innovative, competitive, and growth-minded; this person is also an entrepreneur. GEM provides an umbrella under which a wide variety of entrepreneurial characteristics, such as motivations, innovativeness, competitive-ness, and high-growth aspirations, can be systematically and rigorously studied.

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    GEM terminology

    Nascent entrepreneur is one who is actively planning a new venture. Such an entrepre-

    neur has done something during the previous 12 months to help start a new business that he or she will own, at least in part. Activities such as organizing the start-up team, looking for equip-ment, saving money for the start-up, or writing a business plan would all be considered active commitments to starting a business. Wages or salaries will have been paid for no more than three months; nascent entrepreneurs are often still employed full-time elsewhere.

    New firm entrepreneur is an entrepreneur who, at least in part, owns and manages a

    new business that is between four and 42 months old and has not paid salaries for longer than this period.

    Established business owner In addition to those individuals who are currently involved

    in the early stages of a business, there are also many individuals who have set up businesses that they have continued to own and manage for a longer time. These individuals are included in the established business owner index, which captures the percentage of individuals in a population who have set up businesses that they continue to own and manage and who have paid wages or salaries for more than 42 months.

    Dynamism is defined as the ratio of early-stage entrepreneurship to established business ownership. This ratio shows the relative activity levels among early-stage entrepreneurs com-pared to the prevalence of established business owners. Low levels of dynamism indicate a less entrepreneurial environment.

    Total early-stage entrepreneurial activity (TEA Rate) refers to the total rate of early-

    stage entrepreneurial activity among the adult population aged 1864 years, inclusive. In some

    instances, this rate is less than the combined percentages for nascent and new firm entrepreneurs. This is because, in circumstances where a respondent qualifies as both a nascent and a new firm entrepreneur, he or she is counted only once.

    The research conceptual model

    GEM views national economic growth and the aggregate level of economic activity in a country as being associated with newer and smaller firms as well as established firms, but its fo-cus lies on early-stage entrepreneurial activity. Small and newer firms generate innovations, fill market niches, and increase competition, thereby contributing to resource reallocation in eco-nomic activity. By considering the complementary nature of economic activity among different groups of firms, GEM links a nation’s economic activity to the interplay of established and new and smaller firms, allowing a clearer understanding of why entrepreneurship is vital to the whole economy. Figure 1 presents the conceptual framework that guides GEM’s data collection activity. The GEM model maintains that established business activity at the national level varies with

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    General National Framework Conditions (GNFC), while entrepreneurial activity varies with En-trepreneurial Framework Conditions (EFC).

    Figure 1.

    GEM Conceptual model

    General

    National Major Frame-Established Firms

    work Con-(Primary Econ-New ditions omy) Establish-

    ments

    Micro, Small and National Economic Growth Medium Firms (Jobs and Technical Innova-(Secondary Econ-tion) omy)

     Entrepreneu-Entrepreneu-

    rial Social, rial New Firms Cultural, Opportunities Political Con-

    text

    Framework

    Conditions

Research hypotheses

    We expect that in Russia and Belgium there is not the same condition to begin new busi-ness and to develop it. We stay that there are factors influenced the level of this condition: age, economic situation in each country and experience of enterprise activity.

    1. Despite the much higher growth of economy in 2006-2008, in Russia than in Belgium, the

    population has more negative estimations than in Belgium concerning the possibilities to

    start-up a business in the own location because of weak entrepreneurship support infrastruc-

    ture.

    2. Both in Russia and in Belgium the younger generation (up to 24 years) estimates conditions

    to begin with (of beginning) and business developments (developing business) more pers-

    pective, than older people, because young people are more ambiguous than other cohorts of

    population.

    3. Due to the fact that fear of failure is more common for Russian people than for Belgians, in

    Russia the fear of failure is a stronger ‘de-motivator’ to start-up.

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    4. Both in Russia and in Belgium there is dependence between experience of entrepreneurial

    activity and low level of fear of failure. And vice versa, both in Russia and in Belgium pop-

    ulation without experience of enterprise activity fears opening new business more than en-

    trepreneurs.

    5. In Russia the level of self-confidence in entrepreneurial skills is less than in Belgium be-

    cause the level of Belgian’s entrepreneurship culture is higher than in Russia. (Market econ-

    omy in Russia established only in 90-s XX century whereas in Belgium entrepreneurship

    economy established and developed over a period the last two centuries.

    6. In Russia the social respect of entrepreneurship is much more modest because of the weak

    role of media in establishing a positive picture of entrepreneurship.

    Prospective information base

    Prospective base of our research are the GEM data file, for 2006-2008, and the official statistics data about (from) Russia and Belgium

    The GEM data collection covers the life-cycle of the entrepreneurial process and looks at individuals at the point when they commit resources to start a business they expect to own them-selves (nascent entrepreneurs); when they currently own and manage a new business that has paid salaries for more than three months but less than 42 months (new business owners); and when they own and manage an established business that has been in operation for more than 42 months (established business owners).

    GEM takes a broad view of entrepreneurship and focuses on the role played by individu-als in the entrepreneurial process. Unlike most entrepreneurship data sets that measure newer and smaller firms, GEM studies the behavior of individuals with respect to starting and managing a business. Furthermore, GEM views entrepreneurship as a process and considers people in entre-preneurial activity in different phases; from the very early phase when the business is in gesta-tion to the established phase and possibly discontinuation of the business. A key GEM indicator is the prevalence rate of early-stage entrepreneurial activity (also known as the TEA index), represented by the shaded box in Figure 2.

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    Figure 2.

    The Entrepreneurial Process and GEM Operational Definitions

    GEM Adult Population Survey Russia

    Survey institute which was collected data was Levada center. Target population was per-sons aged 16 years and over, resident to a private household in Russia. Using sampling method was face-to-face interview and Russian Census 2002. Respondent’s method of selection - Next

    birthday.

    Table 1.

    Principles of sampling in Russia

    Sample Description Selected

    stage units

    Stage 1 Selection of Primary Sampling Units (PSU) cities. 108 PSUs

    ( the limitation of 15 interviews per PSU)

    Stage 2 Selection of Secondary Sampling Units (SSU) - Electoral dis-217 SSUs

    tricts

    Stage 3 Selection of household Random

    walk

    Stage 4 Selection of individual Next birthday

    GEM Adult Population Survey Belgium 2006.

    Data from Belgium are collected by TNS Dimarso. Target population was person aged 18 64 years, resident to a private household in Belgium. Data was collected using mobile phone and fixed-line telephone sampling. Fixed-line telephone component of survey: Random digital dialling (85%) Mobile telephone component of survey: Random dial from list (15%). Respondent’s method of selection - Last birthday.

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    Three age groups defined in the following proportions to the population:

    Age group Proportion to popula-

    tion, %

    18 34 31

    35 54 48

    55 64 21

    Total 100

    Gender defined in the following proportions to the population:

    Gender Proportion to population, %

    Male 48

    Female 52

    Total 100

    National statistics

    We use GDP per capita, in internationally comparable prices by expenditure, data are or-ganized by country and by year. Source of national statistics are UNECE Statistical Division Da-tabase, compiled from national and international (CIS, EUROSTAT, IMF, OECD) official sources.

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