Measuring Entrepreneurship in Developing Countries

Abstract

This paper discusses the difficulties associated with measuring entrepreneurship in developing countries. Three important dichotomies in the research on entrepreneurship are discussed: formal-informal, legal-illegal, and necessity-opportunity. Several common measures of entrepreneurship are outlined along with their relevance to developing countries, including self-employment, Global Entrepreneurship Monitor data, World Bank Group Entrepreneurship Survey data and OECD data. The implications of the current understanding of entrepreneurship are discussed with respect to institutions and economic development.

Measuring entrepreneurship: Type, motivation, and growth

“…The distinction between different measures of entrepreneurship requires some consideration of the prevailing economic development context [5], [6], [9]. For example, as can be seen in Figure 1, self-employment tends to be higher in poorer countries, where informality dominates labor markets and the organization of production.…”

“…Data collection is an expensive endeavor, particularly when undertaken across a large number of independent administrative agencies, for example, company registrars across more than 150 countries. Data collection efforts that aim to compile and integrate existing data face the challenge of unstandardized definitions, which limits comparability [6]. Efforts aimed at creating completely new information using standardized protocols may maximize data comparability, but these are expensive and could end up limiting coverage as not all countries or industries will be able or willing to adopt the new protocols.…”

“…Previous work of the author contains a larger number of background references for the material presented here and has been used intensively in all major parts of this article [1], [2], [4], [6].…”

“…The economic development context in which entrepreneurs operate is important in shaping the type and nature of their activities [1], [5]; it is thus useful to consider this context when comparing measures [6]. In Figure 1, five entrepreneurship measures are listed along with gross national income (GNI) per capita for 15 countries.…”

Building an Entrepreneurial Society: 25 Years of Entrepreneurship at FEB UM

“…Measures of entrepreneurship reflect different types of activities and, thus, should be selected carefully (Desai, 2009). The search for indicators and even the articulation of specific statistics has become crucial in order to make progress in the applied research as well as to design, implement, and assess the various measurements of public intervention (Congregado, 2008).…”