26th May 2009
 

The Global Entrepreneurship Monitor (GEM) Report for Ireland, sponsored by Enterprise Ireland, Forfás and AIB, confirms that Ireland is at heart an entrepreneurial nation and to the fore in Europe in both the rate of early stage entrepreneurial activity and in the rate of established entrepreneurs among the adult population. With an average of 2,800 individuals setting up new businesses every month, entrepreneurial activity in Ireland remains high, according to the latest GEM report. 

Tánaiste, Mary Coughlan, T.D., Minister for Enterprise Trade and Employment, and Professor Colm O’Gorman, DCU Business School, at the launch of the Global Entrepreneurship Monitor (GEM) Report for Ireland.

Welcoming the report, the Tánaiste said: “We need all of what is best from entrepreneurship now more than ever. The establishment of new businesses can bring many benefits to the Irish economy and can enrich the base of SMEs while adding to competitiveness, innovation and employment creation.  I am determined to ensure that as much support as possible is given to these entrepreneurs to allow them to create sustainable, innovative businesses, so that the employment and other economic benefits that flow from the creation of new businesses can benefit the wider community.”

The GEM report finds that despite the changed economic environment in Ireland in 2008, at the time of the 2008 GEM survey (June 2008) there was no fall off in the level of those who had recently set up a new business (new firm entrepreneurs) (4.3%), and that Ireland continued to the fore in Europe in early stage entrepreneurs (7.6%). There continues to be a high number of established owner managers, at 9% of the adult population.

Reflecting the changing conditions for entrepreneurs and owner managers, however, there was a significant decline in those actively planning new businesses (nascent entrepreneurs) (3.3% in 2008 compared to 4.2% in 2007) and a significant decline in the  number of people perceiving good opportunities to start a new business – down to 27% from 46% in 2007. This was one of the sharpest declines across participating GEM countries.

Furthermore, the proportion of early stage entrepreneurs reporting that they were considering starting a business because they had no better choice, so called necessity  entrepreneurs, rose considerably (from 6% in 2007 to 19% in 2008). So while most entrepreneurs in Ireland are motivated to start a business by a perceived opportunity, one in five is now motivated by necessity. The business opportunities identified by early stage entrepreneurs changed in 2008, with a decline in new businesses focused on the consumer sector, 37% in 2008 from 44% in 2007.

New research carried out by GEM explored the issue of ethnic entrepreneurs. GEM reports that those who were not born in Ireland are more active as early stage entrepreneurs (9.1%) than are those who were born in the country (7.3%). This research also demonstrates that spending time living out of Ireland - whether the individual was born in Ireland or not - increases the likelihood of the person being involved as an early stage entrepreneur.

Participation in entrepreneurship education or training has positive effects on an individual’s preparedness and their likelihood of becoming an entrepreneur, according to new GEM research. For example, in Ireland, those that have some training or education in entrepreneurship are one and a half times more likely to perceive that they have the skills, knowledge and experience to start a new firm and are three times more likely to report that they expect to start a business in the future. It is also apparent that almost two thirds of early stage entrepreneurs start their businesses without having participated in any entrepreneurship training despite the widespread availability of such courses throughout the country.

The authors of the report are Paula Fitzsimons, National GEM Co-ordinator, and Dr. Colm O'Gorman, Professor of Entrepreneurship, DCU Business School.  The report can be downloaded from www.forfas.ie