Presentation from the capacity building seminar “Financing business start-up by under-represented groups”, 27-29 June 2012, Trento – Italy; organised by the Local Economic and Employment Development (LEED) Programme and its Trento Centre at the OECD in collaboration with the Directorate-General Employment, Social Affairs and Inclusion of the European Commission. See www.trento.oecd.org
Designing policies and programmes for inclusive entrepreneurship by Jonathan Potter, Senior Economist, OECD LEED Programme
1. Designing policies and programmes
for inclusive entrepreneurship
Dr. Jonathan Potter, Senior Economist
LEED Division, OECD
2. Introduction: Defining entrepreneurship
• Entrepreneurial activity is the enterprising human action in pursuit
of the generation of value, through the creation or expansion of
economic activity, by identifying and exploiting new products,
processes or markets
• Entrepreneurship is entrepreneurial activity by business owners
• Business creation is the realisation of entrepreneurship through
creation of a new business entity
2
3. Total Entrepreneurial Activities Index, 2007-2011
TEA Index, 2007-2011
16%
14%
12%
10%
8%
6%
4%
2%
0%
Source: Tabulations of the 2007-2011 Adult Surveys of the Global Entrepreneurship Monitor (GEM)
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4. Attitudes towards entrepreneurship
• Regardless of whether or not you would like to become self-employed,
would it be feasible for you to be self-employed within the next 5 years?
Sweden
Finland
Denmark
Cyprus
Poland
Slovenia
United Kingdom
Ireland
France
Austria
Germany
Luxembourg
Greece
Romania
Estonia
Italy
Latvia
Spain
Slovakia
Lithuania
Bulgaria
Malta
Hungary
Portugal
Netherlands
Czech Republic
Belgium
EU27
0 10 20 30 40 50 60
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Source: European Commission, 2009, ‘Entrepreneurship in the EU and beyond — A survey in the EU, EFTA
countries, Croatia, Turkey, the US, Japan, South Korea and China’, Flash Eurobarometer 283.
5. Example 1: Key barriers to youth entrepreneurship
1. Lack of awareness of potential for entrepreneurship , lack
of role models, negative social attitudes
2. Education and training programmes generally do not do
enough to nurture entrepreneurial attitudes and skills
3. Lack of prior work and entrepreneurship
experience
4. Fewer financial resources and difficulty obtaining
external finance, including debt finance
5. Limited business networks and business-related social
capital
6. Market barriers, including a bias in financial markets
away from youth-owned businesses and ‘discrimination’ in
product markets 5
6. Example 1: Key policy responses for youth
1. Lack of entrepreneurship awareness and skills
• Develop entrepreneurship skills within education system
and through training outside of the education system
2. Lack of entrepreneurship skills and networks
• Disseminate information, provide advice, counselling,
coaching and mentoring services
3. Lack of financial resources and access to external
finance
• Provide ‘bridging’ finances for living expenses and working
capital, as well as micro-financing and non-traditional
start-up financing programmes for investment
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7. Example 2: Key barriers to senior entrepreneurship
1. Physical and cognitive health
2. State benefits and retirement income may reduce the income
incentive for self-employment
3. Age discrimination– older people often seen as less
flexible, less committed and less able to cope with technology
4. Lack of entrepreneurship skills despite having high level
of human capital
5. Difficulty rebuilding the networks they had during their
career, particularly when they operate small home-based
businesses
6. After working in paid employment, many older people may
not be aware of the opportunities that self-employment
can provide, nor how to start a business
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8. Example 2: Key policy responses for seniors
1. Lack of entrepreneurial awareness and attitudes
• Promote lifelong learning
2. Lack of entrepreneurship skills
• Provide entrepreneurship training through adult
education and specific programmes for seniors
3. Lack of entrepreneurial networks
• Grow networks with mentoring and coaching
4. Disincentives in social support systems
• Reduce disincentives to earnings and
• Review health support systems
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9. Options for policy delivery to disadvantaged groups
1. Full integration into mainstream support
• Advantage: easier to control quality of support
• Disadvantage: more difficult to reach target clients; assumes target groups
have same needs as mainstream entrepreneurs
2. Targeted marketing services of mainstream agencies
• Advantage: improved access to target clients
• Disadvantage: assumes target groups have same needs as mainstream
entrepreneurs
3. Special services and delivery modes by mainstream agencies
• Advantage: improved access to target clients and tailored services
• Disadvantage: more resource intensive; trust may still be an issue with some
target clients
4. Specialist agencies to deliver specialised support
• Advantage: effective at reaching clients and trust is easily established
• Disadvantage: resource intensive; requires co-ordination with mainstream
support agencies, particularly when bridging clients to mainstream support
is a goal 9
10. Policy recommendations for reaching target groups
• Targeted, specialist support is almost always more effective than general
support, but should:
– Be highly engaged and well co-ordinated with mainstream support
agencies
– Be differentiated from mainstream support to secure funding
• Support for target groups with low densities of entrepreneurs should be
integrated with the mainstream, but mainstream agencies should :
– Work with existing community networks
– Understand the way different communities do business
– Define targets for delivering services to these groups,
– Employ staff and business advisers from the target groups
– Focus outreach efforts on media used by the target groups and be
active in the community
– Contract specialist community-based agencies when necessary
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