32,000 people in Ireland set up new businesses in 2013
85% expect to become employers
17th June 2014
The Minister for Jobs, Enterprise and Innovation, Richard Bruton TD
welcomes the publication of the Global Entrepreneurship Monitor (GEM)
Report for Ireland for 2013. The report shows that 32,000 people started
new businesses in Ireland in 2013, and that one in eleven of the adult
population are engaged in some form of early stage entrepreneurial
activity. (See key findings at the end of the press release).
The GEM report is supported by Enterprise Ireland, Forfás and the
Department of Jobs, Enterprise and Innovation. The authors of the report
are Paula Fitzsimons of Fitzsimons Consulting, who is the National GEM
Co-ordinator, and Dr Colm O’Gorman, Professor of Entrepreneurship, DCU
Business School.
Findings of the 2013 GEM research also show that the rate of early stage
entrepreneurial activity is at its highest since the onset of the economic
crisis. The pipeline of future entrepreneurs also looks very strong as
those indicating that they intend to start a business in the next three
years increased significantly in 2013 and is now at its highest level since
Ireland first became involved in GEM research in 2000.
Welcoming the report, Minister Bruton said: “As I have said before, we have
great entrepreneurs in Ireland – we just don’t have enough of them.
Start-up businesses account for around two thirds of new jobs created in
Ireland. That is why we in Government, through the Action Plan for Jobs,
have put in place measures to support more start-up activity – for example
the establishment of the Local Enterprise Offices and the new county-based
competition to find Ireland’s Best Young Entrepreneur.
“Today’s GEM report is a very welcome addition to the available data in
this area. It confirms what we have been seeing across the country in
recent years – that people are becoming more open to considering starting a
business as a career option. I am determined to ensure that we in
Government conti nue implementing the changes necessary to support more
start-ups – and ultimately to create the jobs we need”.
“As a Government we stated a clear ambition for Ireland to be among the
most entrepreneurial nations in the world and acknowledged as a world class
environment in which to start and grow a business. The Action Plan for Jobs
2014 has a special focus on entrepreneurship. We have set down concrete
measures with the objective of further improving the ecosystem to support
greater levels of entrepreneurship and start-ups. I intend to further build
on this in the National Strategy on Entrepreneurship, which I will publish
in the autumn.”
The 2013 Report also examines the gender aspect of entrepreneurial activity
in Ireland. Minister Bruton welcomed the further narrowing of the gender
gap. There are now 1.4 times as many men as women who are new business
owners. “I am delighted to see that men and women in increasing numbers
are becoming new business owners. The challenge is to ensure that their new
businesses are sustainable and can compete with the best in the world both
on home and export markets. That is the only basis on which they can grow
and create much needed employment.”
Commenting on the report Tom Hayes, Head of Micro Enterprise and Small
Business at Enterprise Ireland said: “The GEM report indicates that Irish
early stage entrepreneurs have a stronger focus on international markets
and exporting than their OCED and EU counterparts. This focus of
entrepreneurs on developing innovative products and services for export is
essential for growth and economic recovery.”
Declan Hughes, Head of the Enterprise, Trade and Innovation Policy
Division, Forfás, said: “It is encouraging to see positive trends in
entrepreneurship and to see ambitious plans for job creation. There is a
need to continue to improve the perceived attractiveness of
entrepreneurship as a career option and to ensure that entrepreneurs can
access necessary sources of finance.”
Notes to Editors:
The Global Entrepreneurship Monitor (GEM) provides an annual assessment of
the entrepreneurial activity, aspirations and attitudes of individuals
across a wide range of countries. GEM is the largest on-going study of
entrepreneurial dynamics in the world. Initiated in 1999 as a partnership
between London Business School and Babson College, the first study covered
10 countries. In 2013, 67 countries participated in the research. One of
the unique features of GEM is the facility which it provides to compare
countries with each other across a range of variables pertinent to
entrepreneurship. This is made possible as the research is carried out in
exactly the same way in each country and is coordinated by the Global
Entrepreneurship Research Association (GERA) based in Babson College in the
United States.
The findings include:
There was an increase in the rate of Total Early Stage Entrepreneurial
Activity (TEA) in Ireland in 2013 – 9.2% up from 6.1% in 2012. Ireland is
now ranked 2nd across the EU-15 and 9th among the EU-28 countries
One in eleven of the adult population in Ireland are engaged in some aspect
of early stage entrepreneurial activity.
The gender gap has narrowed and not because less men were early stage
entrepreneurs (as was the case in 2012).
· In terms of new business owners the gender ratio is 1.4:1
· In terms of total early stage entrepreneurs it is 1.9:1.
There had been a serious concern about the pipeline of entrepreneurs for
the future. (This was reflected in the Report of the Entrepreneurship
Forum). This was turned around in 2013 with 14.7% of the population
indicating their intention to set up a new business in the next three
years. This is higher than EU 15 average (11.5%) but somewhat behind EU-28
(15.9%).
Early stage entrepreneurship is higher among immigrant groups (11%) than it
is among the non-immigrant population (8.8%).
The majority of early stage entrepreneurs expect to become employers (85%).
The number of early stage entrepreneurs that have ambitious growth
aspirations and expect to employ 10 or more after five years (22%),
compares very favourably with international averages.
13% of early stage entrepreneurs have, or expect to have, 75% or more of
their customers in overseas markets. This is the 4th highest rate for
significant exporters across the OECD.
Irish early stage entrepreneurs are relatively innovative with 27% of their
products/services considered new to all customers compared to their
international counterparts, 17% (OECD), 16% (EU-28) and 18% (EU-15).
Four out of five adults in Ireland have a high regard for successful
entrepreneurs (81%). The rate is second only to Finland (85%) across all EU
and OECD countries in this
respect.
The level of perception of supportive media coverage about entrepreneurs in
Ireland (60%) remains higher that the international averages across the
OECD (51%), EU-28 (49%) and EU-15 (49%).
The rate at which individuals are turning to entrepreneurship out of
necessity continued a downward trend (19% from 28% in 2012). This rate is
lower than the international averages across the OECD (21%) and EU-28 (24%)
and broadly similar to the EU-15 (18%).
The rate of owner managers of established business is now at its lowest
rate since 2004 when it was 6.5%. The rate in 2013 (7.5%), however, remains
higher than the average across the OECD (6.6%), the EU-28 (6.4%) and EU-15
(6.6%)..
The rate at which entrepreneurs were discontinuing their business increased
slightly in 2013. This increased from 1.2% in 2012 to 1.9% in 2013. This
rate is on par with the averages across the OECD (2.1%), EU-28 (2%) and
EU-15 (1.7%).
The majority of entrepreneurs that closed their business cited that the
business was not profitable as their reason for doing so (59%). 10% claimed
to have problems getting finance in order to keep the business going.
Informal investors are a vital source of funding for new businesses in
Ireland. There was little change in the number of adults reported having
provided funds in the past three years (June 2010 to June 2013) to a
business started by someone else (3.4%). The average amount invested by
individuals in Ireland (€18,700) during this period was relatively low in
comparison to the OECD average (€23,000).