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ASEAN REGIONAL ENTREPRENEURSHIP REPORT

Siri Roland Xavier | Ulrike Guelich | Penny Kew | Catharina Nawangpalupi | Aida Velasco

2014/15

Driving Asean Entrepreneurship: Policy Opportunities For Inclusiveness And Sustainable Entrepreneurial Growth

International Development Research CentreCentre de recherches pour le developpement international

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ASEAN REGIONAL ENTREPRENEURSHIP REPORT 2014/2015DRIVING ASEAN ENTREPRENEURSHIP: POLICY OPPORTUNITIES FOR INCLUSIVENESS AND SUSTAINABLE ENTREPRENEURIAL GROWTH

Sponsors and Institutions

This regional research project was made possible through;

• TheInternationalDevelopmentResearchCentre(IDRC)whichfundedVietnam,Indonesiaand the Philippines.• UniversitiTunAbdulRazak(UNIRAZAK),MalaysiatheSEAcoordinatinginstitution.• TheGlobalEntrepreneurshipResearchAssociation(GERA).• TheGEMresearchteamsofVietnam,Indonesia,Philippines,Singapore,ThailandandMalaysia.

ASEANIDRC-GEMProjectLeader:AssocProfDr.RolandXavier,UniversitiTunAbdulRazak,Malaysia.Contact:roland@unirazak.edu.my

Vietnam IDRC-GEM Team Leader: Dr LuongMinh Huan, Viet Nam Chamber of Commerce andIndustry–VCCI,Vietnam.Contact:luongminhhuan@gmail.com

Philippines IDRC-GEMTeamLeader:AssocProfDr.AidaLicarosVelasco,DeLaSalleUniversity,Manila.Contact:aidalicarosvelasco@gmail.com

Indonesia IDRC-GEMTeamLeader:AssocProfDr.CatharinaBadraNawangpalupi,ParahyanganUniversity,Bandung,Indonesia.Contact:cnawangpalupi@gmail.com

ThailandGEMTeamLeader:DrPichitAkrathit,fundedbytheOfficeofSMEsPromotion(OSMEP)andBangkokUniversity.Contact:gem_thailand@buc.ac.th

Singapore GEM Team Leader: Assoc Prof Dr. Olexander Chernyshenko, Nanyang TechnologicalUniversity,Singapore.Contact:chernyshenko@ntu.edu.sg

TheauthorsthankDatukSeriMdZabidofUNIRAZAK,EdgardRodriguezofIDRC,MichaelHerringtonofGERA, Yana Litovsky ofGEMdata teamand all participating national teammembers for theirvariouscontributionstothisfirstASEANregionalentrepreneurshipreport.

Although GEM data was used in the preparation of this report, their interpretation and use are the sole responsibility of the authors.

Foreword

Executive summary

Acknowledgements

Chapter 1: Introduction and background1.1 TheGlobalEntrepreneurshipMonitor(GEM)researchproject1.2 TheGEMconceptualmodel1.3 HowGEMmeasuresentrepreneurship1.4 GEMmethodology1.4.1 Adultpopulationsurvey(APS)1.4.2 Nationalexpertsurvey(NES)

Chapter 2: An ASEAN perspective on entrepreneurship2.1 Introduction2.2 The ASEAN2.3 ASEANandtheAsianEconomicCommunity(AEC):AwarenessandEngagement2.4 The entrepreneurial pipeline2.4.1 Potential entrepreneurs2.4.2 Intentional entrepreneurs2.4.3 Entrepreneurialactivity2.5 ProfileoftheASEANentrepreneurs2.5.1 Age2.5.2 Gender2.5.3 Educationlevel2.6 Entrepreneurship impact2.6.1 Industrysector2.6.2 Job creation2.6.3 Innovation2.7 Summaryofentrepreneurshipbycountry

Chapter 3: Focus area – ASEAN women’s involvement in entrepreneurship3.1 Entrepreneurial attitudes3.1.1 Knowstart-upentrepreneur3.1.2 Opportunityperception3.1.3 Perceivedcapabilities3.1.4 Fearoffailure3.2 Entrepreneurial intentions3.3 Entrepreneurialactivity3.3.1 The entrepreneurial pipeline3.3.2 Reasonsforstartingabusiness3.3.3 Business discontinuance3.3.4 TEA and education3.4 Entrepreneurial aspiration3.4.1 Firm growth and job creation3.4.2 Internationalisation3.5 Conclusions

Chapter 4: A GEM assessment of the ASEAN national entrepreneurial environment4.1 AnoverviewofthebusinessenvironmentintheASEANregion4.2 AssessmentoftheEntrepreneurialFrameworkConditionsinsixASEANcountries4.3 Keyconstraintstoentrepreneurialactivity4.3.1 Financial support4.3.2 Governmentpolicies4.3.3 Marketopenness4.3.4 Researchanddevelopmenttransfer4.4 Keyrecommendationsfromthenationalexperts

Chapter 5: Policy recommendations and conclusions5.1 AnASEANentrepreneurialecosystem5.2 AsianEconomicCommunity(AEC):awarenessandengagement5.3 Directed-urgencyforASEANpolicymakers5.4 Stage-caseforentrepreneurshipdevelopmentinASEAN

References

Appendix 1

Appendix 2

Authors

Siri Roland Xavier | Ulrike Guelich | Penny Kew | Catharina Nawangpalupi | Aida Velasco

CONT

ENTS

International Development Research CentreCentre de recherches pour le developpement international

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LIST OF TABLES

Table2.1: SelectedASEANeconomicindicators(asofDecember2014)

Table2.2: Medium-termdevelopmentplansinSoutheastAsia

Table2.3: SocietalattitudesinASEAN-6countriesandcomparisonswithotherregionalaverages,GEM2014

Table2.4: Perceivedopportunities,capabilitiesandfearoffailureinASEAN-6countriesandcomparisonswithotherregionalaverages,GEM2014

Table2.5: Entrepreneurial intentions in ASEAN-6 countries and comparisonswith other regional averages,GEM2014

Table2.6: EntrepreneurialactivityinASEAN-6countriesandcomparisonswithotherregionalaverages,GEM2014

Table2.7: ReasonsforstartingabusinessinASEAN-6countriesandcomparisonswithotherregionalaverages,GEM2014

Table2.8: ReasonsforbusinessexitinASEAN-6countries,GEM2014

Table2.9: TEA rates by age group in ASEAN-6 countries,GEM2014 (% of adult population in each agecategoryinvolvedinTEA)

Table2.10: TEA ratesbygender inASEAN-6countries,GEM2014 (%of adult population for eachgenderinvolvedinTEA)

Table2.11: TEAratesbyeducationlevelinASEAN-6countries,GEM2014

Table2.12: TEAratesbyindustrysectorinASEAN-6countries,GEM2014

Table2.13: Jobexpectationsforearly-stageentrepreneurialactivityinASEAN-6countries,GEM2014

Table2.14: JobgrowthexpectationsovernextfiveyearsinASEAN-6countries,GEM2014

Table2.15: Newproducts/servicesofferedtocustomersinASEAN-6countries,GEM2014

Table2.16: ProportionofcompetitorsinASEAN-6countries,GEM2014

Table3.1: RegionalcomparisonofTEAactivitybygender,GEM2014 Table4.1: KeyindicatorsoftheeconomicprofileinASEAN,2014*

Table4.2: GlobalCompetitivenessIndex:rankingsoutof144countries,2014-2015*

Table4.3: GlobalrankingsofASEANcountriesineaseofdoingbusiness,2015vs.2014(outof189countries)

Table4.4: TheGEMEntrepreneurialFrameworkConditions(EFCs)

Table4.5: Experts’assessmentofGEMEntrepreneurialFrameworkConditions–meanscorepercountry

Table4.6: GEMEntrepreneurialFrameworkConditionsratedpositive>3.5(+)andnegative<2.5(-),percountry

LIST OF FIGURES

Figure1.1 TheGEMConceptualFramework,usedinGEMsurveysupto2014

Figure1.2: TheRevisedGEMConceptualFramework

Figure1.3: TheentrepreneurialprocessandGEMoperationaldefinitions

Figure 2.1: The entrepreneurial pipeline

Figure2.2: EntrepreneurialpipelineforASEAN-6countries,GEM2014 Figure3.1: Genderdifferencesinentrepreneurialattitudes,ASEAN-6region

Figure3.2: Knowstart-upentrepreneurrate,bygender,forASEAN-6countries

Figure3.3: Perceivedopportunitiesrate,bygender,forASEAN-6countries

Figure3.4: Perceivedcapabilitiesrate,bygender,forASEAN-6countries

Figure3.5: Fearoffailurerate,bygender,inASEAN-6countries

Figure3.6: Entrepreneurialintentions,bygender,forASEAN-6countries

Figure3.7: Entrepreneurialdesirabilityperception,bygender,ASEAN-6countries

Figure3.8: Entrepreneurialpipeline,bygender,forASEAN-6region

Figure3.9: Participationinentrepreneurialactivity,bygender,forASEAN-6countries

Figure3.10:Motiveforstartingbusiness,bygender,forASEAN-6countries

Figure3.11:Rateofbusinessdiscontinuance,bygender,forASEAN-6countries

Figure3.12:Reasonforbusinessdiscontinuance,bygender,forASEAN-6region

Figure3.13:FemaleTEAaccordingtoeducationlevel,forASEAN-6countries

Figure3.14:Firmgrowthaspirations,bygender,forASEAN-6countries

Figure3.15:TEAinternationalorientation,bygender,forASEAN-6countries Figure4.1: StartingabusinessinASEAN-proceduresanddays

Figure 4.2: Starting a business in ASEAN - costs and capital

Figure4.3: Average expert ratings on financing for new and growing firms acrossASEAN-6countries(fivepointscale)

Figure4.4: AverageexpertratingsongovernmentpoliciesfornewandgrowingfirmsacrossASEAN-6countries(fivepointscale)

Figure4.5: Average expert ratings onmarket openness for newandgrowing firmsacrossASEAN-6countries(fivepointscale)

Figure4.6: AverageexpertratingsonR&DtransferfornewandgrowingfirmsacrossASEAN-6countries(fivepointscale)

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Entrepreneurialcapacitybuilding ispivotal to thedevelopment of all types of economies. It laysthe foundation for infanteconomies, resuscitatesstagnant economies and installs a leapfroggingdriveforemergingeconomies.AssuchUNIRAZAKisproudto leadthis research initiative inASEANalongwithGEMandIDRC.Theneedforevidencebased recommendations are crucial as theyempowerpolicymakers.

This first regional ASEAN entrepreneurshipresearch study against the backdrop of globaldata and benchmarks will directly raise policymakingstandards.Itwillaffordadeepercontextualunderstanding which can impact growth and inclusivenessforwomen,youth,SMME’sandthedisadvantagedwithinASEAN.ThesearekeyfocalpainpointsforASEANasitfacesthechallengesofa new millennia. Thus this report whilst promoting an understanding of ASEAN’s entrepreneurialphenomena will also serve to unveil the vastopportunities for higher entrepreneurial growthandsustainabilitywithintheregion.

If you want to understand today’s entrepreneurs, look to GEM. Itssurveyshelpgovernmentsunderstandwhatmotivatesentrepreneurs,thechallengesfacedbynewsmallenterprises,andhowtohelpthemgrow.IDRCisproudtohavesupportedtheresearchattheheartofthisfirstGEMreportontheASEANregion.

Itfillsanimportantgapbyprovidingreliablecomparativedataaboutinnovation,jobs,andgrowthinaregionoftremendousimportancetoCanada.Thistimelyevidenceisneededtocreatethesoundpoliciesthathelpsmallbusinessesthriveandbenefitsocietyasawhole.

EachyearGEMcountriesaroundtheworldpublishareportoftheirownentrepreneurialecosystembutveryrarelyissuchareportwrittenonaregionalbasisallowingforthecomparisonbetweenentrepreneurshipandsmallbusinessdevelopmentamongstcountrieswithintheregion.This ASEAN report is a milestone in that it is the first such reportwhichallowscross-countryregionalanalysisandassuchwillprovideimportantinformationwhichcouldallowpolicymakerstomakemoreinformeddecisions.

The report covers valuable information about the perceptions,attitudes,aspirationsandintentionsoftheadultpopulationineachofthe countries and then compares these amongst other neighbouring countries. Valuable insight is obtained from this, providing a richerinsight into what is happening in the entrepreneurial space.

FOREWORD

Prof. Datuk Seri Dr. Md. Zabid Hj Abdul Rashid, President and Vice Chancellor, Universiti Tun Abdul Razak, Kuala Lumpur, Malaysia.

Jean Lebel, President of International Development Research Centre (IDRC), Ottawa, Canada.

Mike Herrington, Executive Director, GEM Global

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EXECUTIVESUMMARY

Inthewakeoftheglobalfinancialcrisisandensuingdevelopments, theworld’seconomic landscapehasundergone significant shifts. One development hasbeen theheightenedroleofemergingeconomies intheglobalcontext.ASEAN,withaworkforceofmorethan 400million, a combined GDP of 3,600 billionUS$ and an abundance of natural resources, hasvaststrengths todrawonand iswellpositioned forplaying an increasingly important role on the globaleconomic stage. An Asian Economic Community(AEC) isno longeranabstractbuta reality that theregional governments need to embrace before theend of the year 2015. Reaching the full potentialof the AEC, however, will require concertedmutualefforts, with governments focusing on reforms thathelp to create enabling environments that fosterinnovation,facilitatemoreproductiveeconomiesand,critically, open up new and better job opportunitiesforallsegmentsof thepopulation.EntrepreneurshipplaysacrucialroleintheupcomingASEANEconomicCommunity,asakeydriverofsustainableeconomicgrowthandjobcreation.Whilethepotentialbenefitsofincreasedentrepreneurshiparewidelyrecognised,betterevidenceisneededtoidentifythemosteffectivepoliciesforentrepreneurshippromotionintheregion.

TheGlobalEntrepreneurshipMonitor(GEM)researchprojectprovidesusefuldataonboth theextentandnature of entrepreneurial activity within participating

economies.Eachyearsinceitsinceptionin1999,GEMhas collected and analysed data on entrepreneurialattitudes,participationlevelsofindividualsatdifferentstages of the entrepreneurship process, and thecharacteristics of entrepreneurs as well as theirbusinesses. Since entrepreneurial activity does notexist in a vacuum, GEM also considers broaderenvironmental factors that stimulate and support it.AnassessmentofthesefactorsismadeusingGEM’sEntrepreneurialFrameworkConditions(EFCs).

Inorder to assist policymakers inASEAN tomakemore informed decisions about how to increaseentrepreneurship and enhance SME development,both within their own countries and in the region as a whole,itisimportantthatthecurrententrepreneuriallandscapebedefinedandunderstood.In2014,sixSoutheast Asian countries – Indonesia, Malaysia,the Philippines, Singapore, Thailand and Vietnam –participated in theGEMsurvey.ThisASEANsurvey,addingonofVietnam,IndonesiaandthePhilippines,has been made possible through a generous grant fromtheInternationalDevelopmentResearchCentre(IDRC) – a key part of Canada’s aid programmesince 1970. The GEM survey data highlightssignificant national differences in some aspects ofentrepreneurialactivity in thesixcountries;however,enoughsimilaritiesexisttoprovideabasisonwhichtobuildappropriatepoliciesfortheregionalpromotionofentrepreneurship,jobcreationandinclusivegrowth.

KEYFINDINGS

SocietalattitudestowardsentrepreneurshiparegenerallypositiveintheASEAN-6region.Onaverage,two-thirdsofpeople in the region see entrepreneurship as a good career choice,withonlyAfricaandLatinAmerica&Caribbeanscoring marginally higher. Malaysia is the exception. Intermsofentrepreneurshipasagoodcareerchoiceandstatusforsuccessfulentrepreneurs,itreportsthelowestregional levels by a significantmargin, and also scoressubstantially below the GEM average. The ASEAN-6stands significantly apart, on a regional basis, in termsofhigh levelofmediaattention,with81%believingthatthereishighmediavisibilityforsuccessfulentrepreneurs.ASEAN-6 reports average scores in termsofperceivedopportunities and capabilities - Africa, Latin America& Caribbean and North America all show significantlyhigheraveragesintermsofperceivedopportunities,whileAfrica and Latin America & Caribbean have markedlymoreconfidence intheirownability tostartabusiness.Coupledwith the fairlymoderate numbers of people intheASEANregionwhoseeopportunitiesandbelievetheyhave the capabilities to pursue them, the high regionalscoreforfearoffailureisofconcern.OnlytheEuropeanUnionscores(marginally)higheronthisindicator.

The regional level of entrepreneurial intention isencouraging,but for themajorityofASEAN-6countriesthere is a sharp fall off between intentional and activeentrepreneurs. This is most noticeable in the Philippines andIndonesia.Boththesecountrieshavehighlypositivesocietal attitudes towards entrepreneurship, whichtranslatesintoahealthypoolofpotentialandintentionalentrepreneurs.The levelofearly-stageactivity,however,is less than half the number with entrepreneurialintentions. In Singapore and Thailand, on the otherhand, entrepreneurial intention translates strongly into

actual entrepreneurial activity. Malaysia reports thelowest early-stage entrepreneurial activity in the region,by a significant margin - its low score for perceivedcapabilitiesmaybesignificant inthisrespectAlthoughthenascententrepreneurshipratefortheASEAN-6regionis disappointingly low, this is offset by a new businessratewhich is thesecondhighest regionalaverage (onlyAfrica reports a higher average) and is almost doubletheGEM 2014 average. The established business rateis the highest regional average and is also significantlyabove theGEMaverage.Thehigh levelofsustainabilityofstart-upsrelativetootherregionsintheGEMsampleisencouraging.SingaporeshowsasignificantlyhigherTEArate than the average for innovation-driven economies.On the other hand, its established business rate is thelowestintheregion.OfgreaterconcernisthefactthattheTEArateisalmostfourtimeshigherthantheestablishedbusiness rate, suggesting a poor level of new firmsustainabilitywhichiscontrarytotheregionaltrend.

Intermsofmotivationtostartabusiness,theASEAN-6region has the second highest regional percentage of people drawn to go into business because of theopportunity to improve their income – an encouragingfinding.However,bothVietnamand thePhilippines (thefactor-driveneconomies in theASEAN-6)haverelativelyhighpercentagesofnecessityentrepreneurs.

TheASEAN-6regionhasapositiveratioofTEAtobusinessdiscontinuance. For every person exiting a business in2014,threewereengagedinearly-stageentrepreneurialactivity. ThePhilippines is theonly country inASEAN-6withahighbusinessdiscontinuancerate–at12.6, it isthree times the regional average. In the Philippines, foreverypersonexitingabusiness1.5peopleareengaged

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in early-stage entrepreneurial activity. Many of thebusinesses in the region close for financial reasons–eitherbecausetheyarenotprofitable,orencounterproblems in accessing financing to sustain thebusiness.

Compared to other geographical regions, theASEAN-6 region is the best performer in termsof gender equity with respect to male and femaleparticipation in early-stage entrepreneurial activity(TEA), as well as significantly better than the GEMaverage. With the exception of Singapore, womenareaslikelyormorelikelytobeinvolvedinearly-stageentrepreneurial activity as aremen. The leakage (orthe decrease of the percentage of entrepreneurs)between phases of the entrepreneurial pipeline isalsosimilar forwomenandmen.However, fromanindividualcountryperspective, it isclear thatcertainfactors make it easier for women entrepreneurs toflourishinsomeASEANcountrieswhiletheystrugglein others. Women in the Philippines, Thailand andIndonesia,forexample,areaslikelytobeinvolvedinallphasesofentrepreneurialactivityasaretheirmalecounterparts.InSingapore,ontheotherhand,femaleparticipation in all three stages of entrepreneurialactivity is only half that ofmale participation. In alltheASEAN-6countries,womenentrepreneurs tendtokeeptheirbusinesssmallandhave lowergrowthaspirations thanmendo.Significantly fewerwomenearly-stageentrepreneursexpect tohave5ormoreemployees in thenextfiveyears,compared tomen(16%forwomen,comparedto24%formen).Womenalso have low international orientation, preferring toremainwithinlocalmarkets.

ThailandandthePhilippinesarenotableforthehighlevel of entrepreneurial activity in all agecategories,as well as the significant proportion of the adultpopulation in the55–64agecategoryengaged inTEA (close to three times the GEM average). Over80%ofearly-stageentrepreneurs intheregionhaveatleastasecondaryqualification,whilemorethanhalfhaveapost-secondaryqualification.Themajorityofentrepreneurs in the ASEAN-6 region are engaged in the retail trade, hotels and restaurant business.Only Singapore has a significant percentage ofentrepreneurs in more sophisticated sectors such as financial intermediation, communications, andprofessionalandgovernmentservices.

Froma regionalperspective, theASEAN-6showsahigherthanaveragepercentageofentrepreneurswithno employees.Almost half the entrepreneurs in theASEAN-6expect togeneratebetween1–5 jobs–however,only4.6%expecttocreatemorethan20jobs(halftheGEMaverage).ThejobgrowthaspirationsfortheASEAN-6regionarenotencouraging.Morethanhalftheearly-stageentrepreneursexpecttogeneratenojobsoverthenextfiveyears,wellabovetheGEMaverage.TheexceptionisSingaporeanentrepreneurs–more than40%expect togeneratemore thansixjobs, and almost half of these project 20 jobs ormore. Only Singapore shows vigorous high-growthexpectationsof16.5%-morethandoubletheGEMaverageandsubstantiallyhigherthantheaverageforinnovation-driveneconomies.

The region shows a moderate level of innovationwith just over half the entrepreneurs in the regionbelieving that their products/services are new tonone of their customers. About 60%of businessesin the region believe that there is high competitionfor theirproducts/services.This imposessignificantchallenges for these entrepreneurs in providing thecompetitiveadvantagetheyneedtogeneratehealthyprofitsandviablebusinessesoverthelongerterm.

Particular environmental factors (social, political andeconomic)are influential increatinguniquebusinessand entrepreneurial contexts. TheNational Experts’Survey(NES)providesinsightsintothewaysinwhichGEM’sEnvironmental FrameworkConditions (EFCs)eitherfosterorconstraintheentrepreneurialclimate,activity and development in the ASEAN-6 region.PhysicalinfrastructureistheEFCwhichisrankedmostpositively,overall,intheregion.WiththeexceptionofPhilippines(withameanscoreof3.1),therestofthecountriesallratephysicalinfrastructureasgood,whileMalaysiaandSingaporerate itasverygood.R&DtransferistheworstrankedEFC,overall,intheregion.With the exception of Singapore (with a score onlyjustaboveaverage),therestoftheASEANmembersall rate thisEFCasbelow-average.Thekey factorsconstraining entrepreneurship in the region were identifiedasaccesstofinance,governmentpolicies,

CHAPTER 1:INTRODUCTIONANDBACKGROUND

1.1 The Global Entrepreneurship Monitor (GEM) research project

Academicsandpolicymakersagreethatentrepreneurs,and the new businesses they establish, play a criticalroleinthedevelopmentandwell-beingoftheirsocieties.As such, there is increased appreciation for andacknowledgementof the roleplayedbynewand smallbusinesses in an economy. GEM contributes to thisrecognitionwith longitudinalstudiesandcomprehensiveanalysesof entrepreneurial attitudesandactivity acrossthe globe. Since its inception in 1997 by scholars atBabson College and London Business School, GEMhasdeveloped intooneof theworld’s leading researchconsortiaconcernedwithimprovingourunderstandingofthe relationships between entrepreneurship and national development.GEM’skeyobjectivesareasfollows:

• to track entrepreneurial attitudes, activity andaspirationswithincountriesinordertoprovideannualnationalassessmentsoftheentrepreneurialsector;

• to allow for comparison of levels of entrepreneurialactivityamongdifferentcountries,geographicregionsandeconomicdevelopmentlevels;

• to determine the extent to which entrepreneurialactivity influences economic growth within individualeconomies;

• to identify factors which encourage and/or hinderentrepreneurial activity (especially the relationshipsbetween national entrepreneurship conditions, socialvalues,personalattributesandentrepreneurialactivity);and

• to guide the formulation of effective and targetedpolicies aimed at enhancing entrepreneurial capacitywithinindividualcountries.

InthesixteenyearssinceitsinceptionGEMhasmeasuredentrepreneurship in over 100 countries, covering allgeographic regions and all economic levels, and hasgainedwidespread recognition as themost informativeandauthoritativelongitudinalstudyofentrepreneurshipinthe world.

TheGEMproject has also used the rich seam of dataobtained to produce a series of Special Topic reports,including:

• Financing,in2004and2006

• Women and entrepreneurship, in 2005, 2006, 2007,2009,2010,2012

• High expectation entrepreneurship, high-growthentrepreneurshipandhighimpactentrepreneurship,in2005,2007,2011

• Innovation confidence index – EU funded project, in2007,2008,2009

• Socialentrepreneurship,in2009

• Educationandtraining,in2010

• Youth,in2013

• Entrepreneurialemployeeactivity,in2013

• Sub-SaharanAfrica,in2013,2014(onyouth)

• Entrepreneurship,competitivenessanddevelopment,in 2015

In 2014, 73 countries participated in the GEM study, comprising approximately 73% of the world’s population and 90% of the world’s total GDP.

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1.2 The GEM conceptual model

PriortotheGEMproject,moststudiesofeconomicgrowth and competitiveness emphasised thecontribution of larger established firms, on theassumption that these firms were the maindrivers of prosperity in modern economies. Theobjective of the GEM research programme was tounderstand the relative impact of entrepreneurshipon national economic development. In the contextof understanding the role of entrepreneurship ineconomicgrowth,entrepreneurshipwasdefinedas:“any attempt at new business or new venturecreation, such as self-employment, a newbusinessorganisation, or the expansion of an existingbusiness,byanindividual,ateamofindividuals,oranestablishedbusiness”(Reynolds,P.etal,1999).

In line with its objectives, then, GEM focuses onthe role played by individuals in the entrepreneurialprocess. Every person engaged in any behaviourrelated to new business creation, no matter howmodest, is regarded as having an impact on thenationallevelofentrepreneurship.

TheGEMmodel(Figure1.1)maintainsthatparticularenvironmentalfactors(social,politicalandeconomic)are influential in creating unique business andentrepreneurial contexts. These factors shouldtherefore be taken into account when analysingcross-nationaldifferencesaswellaschangeswithineconomies over time. At a national level, there arethreelevelsoffactorsthathaveanimpactonbusinessactivityand,morespecifically,onentrepreneurship. The most fundamental set of conditions are basicrequirements.Withoutahealthy foundationof theseconditions it is difficult for the efficiency enhancers,at the next level, to productively influence businessactivity. In turn, the innovationandentrepreneurshipfactors will be less effective without a strong baseof efficiency enhancers (which, as stated, dependon basic requirements). Economies that are in their

earlierstagesofdevelopmentareoftenmorefocusedon getting basic requirements in place, while moreeconomicallyadvancedsocieties turn theirattentiontowardinnovationandentrepreneurshipfactorssuchasthedevelopmentofaformalventurefinancesectorandR&Dtransfer.

Internationalorganisationssuchas theWorldBank,theWorldEconomicForum,DoingBusinessReport,HeritageFoundationandtheUnitedNationsprovideindicesanddataonfactorsandconditionsconstitutingthebasicrequirementsandefficiencyenhancers.Toassess the innovationandentrepreneurship factors,GEMdevelopedtheNationalExpertSurvey(NES).Thekeyindicatorsregardingtheroleplayedbyindividualsin the entrepreneurial process (shown in Figure 1.1underattitudes,activityandaspirations)areassessedthroughGEM’sAdultPopulationSurvey(APS).

Although GEM’s core objectives and tenets haveremained constant, the GEM conceptual model isa dynamic entity that is progressively developedto incorporate advances in understanding of theentrepreneurship process and to allow for furtherexploration of patterns revealed in GEM studies.TherevisedGEMconceptualframework(Figure1.2)recognisesthatentrepreneurshipispartofacomplexfeedbacksystem,andmakesexplicittherelationshipsbetweensocialvalues,personalattributesandvariousformsofentrepreneurialactivity.Italsorecognisesthatentrepreneurshipcanmediatetheeffectofthenationalframeworkconditionsonnew jobcreationandneweconomic or social value creation. Entrepreneurialactivity is thus an output of the interaction of anindividual’sperceptionofanopportunityandcapacity(motivationandskills)toactuponthisANDthedistinctconditionsoftherespectiveenvironmentinwhichtheindividualislocated.Inaddition,whileentrepreneurialactivity is influencedby the frameworkconditions intheparticularenvironmentinwhichittakesplace,thisactivity ultimately benefits this environment as well,throughsocialvalueandeconomicdevelopment.Forexample, entrepreneurs create jobs for themselvesand others, which create income for families. Theydevelop new products that improve people’s lives,andadvancetheknowledgeandcompetitivenessoftheir societies.

Figure 1.1 The GEM Conceptual Framework, used in GEM surveys up to 2014Source: GEM Global Report, 2014

Figure 1.2: The revised GEM Conceptual Framework Source: GEM Global Report 2014

The GEM conceptual framework derives from the basic assumption that national economic growth is the result of the personal capabilities of individuals to identify and seize opportunities, and that this process is affected by environmental factors which influence individuals’ decisions to pursue entrepreneurial initiatives.

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The components of the revised GEM conceptualframeworkare:

Social, cultural, political and economic context As in the previous GEM model, this is definedaccording to the twelve pillars of competitivenessderived from the Global Competitiveness Indexand the nine components ofGEM’s EntrepreneurialFramework Conditions (see Figure 1.1). These willaffect countries differently, depending on the stageof economic development at which the countriesare,i.e.althoughallofthepillarswillbeimportanttoeacheconomy, thepillarsof competitivenesswhichareofmost importance to a factor-driven economywilldifferfromthosethatwillbemostimportantinanefficiency-driveneconomy.

Social values towards entrepreneurship This includesaspects suchas theextent towhichsociety values entrepreneurship as a good careerchoice; whether entrepreneurs have high societalstatus; and the extent to which media attention toentrepreneurship iscontributing to thedevelopmentofapositiveentrepreneurialculture.

Individual attributesThis includes different demographic factors (suchas gender, age, geographic location); psychologicalfactors (including perceived capabilities, perceivedopportunities,fearoffailure);andmotivationalaspects

(necessity versus opportunity based ventures,improvement-drivenventures).Entrepreneurial activityThis is defined according to the phases of the lifecycle of entrepreneurial ventures (nascent, newbusiness, established business, discontinuation);accordingtotypeofactivity(highgrowth,innovation,internationalisation); and sector of activity (TotalEarly-stage Entrepreneurial Activity – TEA,Social Entrepreneurial Activity - SEA, EmployeeEntrepreneurialActivity–EEA).

1.3 How GEM measures entrepreneurship

GEMmeasuresindividualparticipationacrossmultiplephases of the entrepreneurial process, providinginsights into the levelofengagement ineachstage.Thisisimportantbecausesocietiesmayhavevaryinglevelsofparticipationatdifferentpointsinthisprocess;however, a healthy entrepreneurial society needspeopleactiveinallphases.Forexample, inordertohave start-ups in a society, theremust be potentialentrepreneurs.Laterintheprocess,peoplethathavestarted businesses must have the ability and thesupport to enable them to sustain their businesses intomaturity.Figure1.3presentsanoverviewoftheentrepreneurial process and the GEM operationaldefinitions.

GEM’s multi-phase measures of entrepreneurship aregivenbelow:

Potential entrepreneurs–thosethatseeopportunitiesin their environments, have the capabilities to startbusinessesandareundeterredbyfearoffailure.

Intentional entrepreneurs–thosewhointendtostartabusinessinthefuture(inthenextthreeyears).

Nascent entrepreneurs–thosewhohavetakenstepstostartanewbusiness,buthavenotyetpaidsalariesorwagesformorethanthreemonths. New entrepreneurs – those who are running newbusinesses that have been in operation for between 3months and 42 months.

Established business owners–thosewhoarerunningamaturebusiness,inoperationformorethan42months.

Discontinued entrepreneurs–thosewho,forwhateverreason,haveexitedfromrunningabusinessinthepastyear.

GEM’s individual-level focus enables a morecomprehensiveaccountofbusinessactivitythanfirm-levelmeasuresofformally-registeredbusinesses.

Inaddition,GEM’semphasison individualsprovidesaninsight into who these entrepreneurs are: for example,their demographicprofiles, theirmotivations for startingventures,andtheambitionstheyhavefortheirbusinesses.GEM also assesses broader societal attitudes aboutentrepreneurship, which can indicate the extent towhich people are engaged in or willing to participate in entrepreneurialactivity,andthelevelofsocietalsupportfortheirefforts.TheGEMdatabaseallowsfortheexplorationof individual or business characteristics, as well as thecausesandconsequencesofnewbusinesscreation.

AprimarymeasureofentrepreneurshipusedbyGEMistheTotal Early-StageEntrepreneurialActivity (TEA) rate.TEA indicates the prevalence of individuals engaged innascent entrepreneurship and new firm ownership intheadult (18 -64 yearsof age)population.Assuch, itcapturesthelevelofdynamicearly-stageentrepreneurialactivityinacountry.

Everyperson engaged in anybehaviour related to new

business creation, no matter how modest, contributesto the national level of entrepreneurship. However, it isimportant to recognise that entrepreneurs can differ intheirprofilesandimpact.Forthisreason,GEMprovidesarangeofindicatorsthatdescribetheunique,multifacetedpatternexhibitedineachsociety.Itisthereforeimportantto consider not just the number of entrepreneurs inan economy, but other aspects such as the level ofemploymenttheycreate,theirgrowthambitions,andtheextent towhich groups such as youth andwomen areparticipatinginentrepreneurialactivity.

1.4 GEM methodology

In order to provide for reliable comparisons acrosscountries,GEMdataisobtainedusingaresearchdesignthat is harmonised over all participating countries. Thedata is gathered on an annual basis from two mainsources:

1.4.1 Adult Population Survey (APS)

The key indicators of GEM are measured through anAdultPopulationSurvey(APS).Academicteamsineachparticipatingeconomyadministerandoverseethissurvey,whichisconductedusingarandomrepresentativesampleofatleast2000adultsbetweentheagesof18and64years. The surveys are conducted at the same timeeveryyear(betweenMayandJuly)usingastandardisedquestionnaire provided by theGEMGlobal Data Team.Thequestionnaireistranslatedintolocallanguages,andback-translatedforavaliditycheck.

Toensurethatthesampleisrepresentative,areastratifiedprobabilitysampling isused.Thesample isstratifiedbygender, age and population group, then by region andcommunitysize.Citiesandlargetowns,smalltownsandvillages, and even rural areas are additionally assessedin some economies. Accredited research companies in eacheconomyconductthesurvey.

Uponcompletionofthesurveyineacheconomy,therawdata issent to theGlobalDataTeam forqualitycontrolchecksanduniformstatisticalcalculations.Thedataarethenreleasedtotheparticipatingeconomiesforanalysisand interpretation, and, ultimately, to be utilised in thecompilation of annual national reports. Results for theentiredataset are released inaglobal executive report,which is launched each January at the GEM AnnualMeeting.

The APS methodology was developed to measureentrepreneurialactivityinawaythatallowsformeaningfulcross-nationalanalyseseachyear,aswellasintra-countrycomparisonsovertime.Toprovideforreliablecomparisonsacross economies, GEM uses a research design that

Figure 1.3: The entrepreneurial process and GEM operational definitionsSource: GEM Global Report 2014

In other words, GEM captures both informal and formal activity. This is important because in many societies, the majority of new entrepreneurs operate in the informal sphere.

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harmonisesthedataoverallparticipatingeconomies.

1.4.2 National expert survey (NES)

A National Expert Survey (NES) was designed tosupportGEM’smainAPSsurvey.TheNESassessesnine Entrepreneurial Framework Conditions (EFCs),whichareshowninFigure1.1underinnovationandentrepreneurship factors.TheseEFCsare importanttoGEMbecausetheyareconceptualisedashavingamorespecificinfluenceonentrepreneurialbehaviour.The NES survey is thus a key component of GEMbecause it provides insights into theentrepreneurialclimateineacheconomy.

GEM provides a number of criteria which must be

metwhenselectingexperts, inorder toconstructabalancedandrepresentativesample.

• At least four experts from each of theentrepreneurial framework condition categoriesmust be interviewed,making aminimum total of36expertspercountry.

• A minimum of 25% must be entrepreneurs orbusinesspeople,and50%mustbeprofessionals.

• Additional aspects such as geographicaldistribution, gender, involvement in the publicversus private sector, and level of experienceshouldalsobetakenintoaccountwhenbalancingthe sample.

The information is used to add context to

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MALAYSIA

General Characteristics and Entrepreneurship Indicators Population (x1000) : 29,628GDP Per Capita (PPP) est.: USD24,500Global Happiness Index: 5.76 (56/156)Human Development Index: 0.773 (62/187)Global Competitiveness Index: 5.53 (23/148)Global Innovation Index: 45.6 (33/143)Ease of Doing Business Index: (18/189)Total early-stage Entrepreneurial Activity Rate (TEA): 5.91- Necessity-Driven % of TEA Rate: 17.54%- Opportunity-Driven % of TEA Rate: 82.46%Phase of Economic Development: Efficiency-driven Economy (transition from stage 2 to stage 3)

SINGAPORE

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 5,567GDP Per Capita (PPP) est.: USD81,300Global Happiness Index: 6.54(30/156)Human Development Index: 0.91 (9/187)Global Competitiveness Index IneIndexIndex: 6.34 (1/148)Global Innovation Index: 59.2 (7/143)Ease of Doing Business Index: (1/189)Total early-stage Entrepreneurial Activity Rate (TEA): 10.96- Necessity-Driven % of TEA Rate: 11.40%- Opportunity-Driven % of TEA Rate: 84.28%Classification Phase of Economic Development: Innovation-driven Economy

INDONESIA

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 253,609 GDP Per Capita (PPP) est.: USD10.200 Global Happiness Index: 5.348 (76/156) Human Development Index: 0.684 (108/187) Global Competitiveness Index Index: 4.91 (46/148) Global Innovation Index: 31.8 (87/143) Ease of Doing Business Index: 114/189 Total early-stage Entrepreneurial Activity Rate (TEA): 14.20 - Necessity-Driven % of TEA Rate: 20.52% - Opportunity-Driven % of TEA Rate: 78.57% Classification Phase of Economic Development: Efficiency-driven economy

VIETNAM

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 90,000 GDP Per Capita (PPP) est.: USD5,600 Global Happiness Index: 5.53 (63/156) Human Development Index: 0.638 (121/187) Global Competitiveness Index: 4.44 (79/148) Global Innovation Index: 34.9 (71/143) Ease of Doing Business Index: (78/189) Total early-stage Entrepreneurial Activity Rate (TEA): 15.3 - Necessity-Driven % of TEA Rate: 29.74% - Opportunity-Driven % of TEA Rate: 70.26% Phase of Economic Development: Factor-driven Economy

PHILIPPINES

General Characteristics and Entrepreneurship Indicators Population ( x 1,000) 107,668 GDP Per Capita (PPP) est.: USD7,000 Global Happiness Index: 4.98 (92/156) Human Development Index: 0.66(117/187) Global Competitiveness Index: 4.63 (66/148) Global Innovation Index: 29.9 (100/143) Ease of Doing Business Index: (95/189) Total early-stage Entrepreneurial Activity Rate (TEA): 18.38 - Necessity-Driven % of TEA Rate: 29.36% - Opportunity-Driven % of TEA Rate: 70.53% Classification Phase of Economic Development: Factor-driven Economy (transition from stage 1 to stage 2)

BRUNEI

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 422GDP Per Capita (PPP) est.: $77,700Global Happiness Index: -na-Human Development Index: 0.852 (30/187)Global Competitiveness Index IneIndexIndex: -na-Global Innovation Index: 31.7 (88/143)Ease of Doing Business Index: 101/189Total early-stage Entrepreneurial Activity Rate (TEA): -na-- Necessity-Driven % of TEA Rate: -na-- Opportunity-Driven % of TEA Rate: -na-Classification Phase of Economic Development: -na-

*na – not available

THAILAND

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 67,741 GDP Per Capita (PPP) est.: USD14,400 Global Happiness Index: 6.37 (36/156) Human Development Index: 0.722 (89/186) Global Competitiveness Index: 5.01 (40/148) Global Innovation Index: 39.3 (48/143) Ease of Doing Business Index: (26/189) Total early-stage Entrepreneurial Activity Rate (TEA): 23.30- Necessity-Driven % of TEA Rate: 17.81%- Opportunity-Driven % of TEA Rate: 80.94%Classification Phase of Economic Development: Efficiency-driven Economy

CAMBODIA

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 15,458GDP Per Capita (PPP) est.: USD3,300Global Happiness Index: 4.067 (140/156)Human Development Index: 0.584 (136/187)Global Competitiveness Index IneIndexIndex: 4.09 (103/148)Global Innovation Index: 28.7 (106/143)Ease of Doing Business Index: 135/189Total early-stage Entrepreneurial Activity Rate (TEA): -na-- Necessity-Driven % of TEA Rate: -na-- Opportunity-Driven % of TEA Rate: -na-Classification Phase of Economic Development: Factor-driven economy

*na – not available

MYANMAR

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 55,746GDP Per Capita (PPP) est.: USD4,800Global Happiness Index: 4.439 (121/156)Human Development Index: 0.524 (150/187)Global Competitiveness Index IneIndexIndex: 3.36 (132/148)Global Innovation Index: 19.6 (140/143)Ease of Doing Business Index: 177/189Total early-stage Entrepreneurial Activity Rate (TEA): -na-- Necessity-Driven % of TEA Rate: -na-- Opportunity-Driven % of TEA Rate –na-Classification Phase of Economic Development: Factor-driven economy*na – not available

LAOS

General Characteristics and Entrepreneurship Indicators Population (x 1,000): 6,803GDP Per Capita (PPP) est.: USD5,000Global Happiness Index: 4.787 (109/156)Human Development Index: 0.569 (139.187)Global Competitiveness Index IneIndexIndex: 4,13 (98/148)Global Innovation Index: -na-Ease of Doing Business Index: 148/189Total early-stage Entrepreneurial Activity Rate (TEA): -na-- Necessity-Driven % of TEA Rate: -na-- Opportunity-Driven % of TEA Rate: -na-Classification Phase of Economic: : Development: Factor-driven economy*na – not available

Asean Countries At A Glance

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CHAPTER 2: AN ASEAN PERSPECTIVE ON ENTREPRENEURSHIP

2.1 Introduction

TheUSfinancialcrisisof2007/2008,consideredbymanyleading economists to be the worst economic crisis since theGreatDepression of the 1930s,was followed by asignificant global downturn (2008 – 2012). The GlobalCompetitivenessReport2014–2015notesthatalthoughthe global economy seems to be finally leaving behindthe worst and longest- lasting financial and economiccrisisofthelast80years,thisresurgenceismovingatalessdecisivepacethanithasafterpreviousdownturns.Itremainsimperativeforpolicymakers,businessandcivilsocietyleaderstoworktogether,inordertoidentifyandstrengthentheforcesthatdrivefutureeconomicgrowth.Inparticular,governmentsareurgedtofocusonreformsthat help to create enabling environments that fosterinnovation, facilitate more productive economies and,critically,openupnewandbetterjobopportunitiesforallsegmentsofthepopulation.

Entrepreneurshipiswidelyconsideredtobeanimportantmechanism for economic development through jobcreation, innovationand itswelfareeffect, andover thepastthreedecadeshasbecomeakeyfocusofacademicresearch. In recent years, and particularly in the wakeof the global financial crisis, the realisation that peoplecouldnolongerdependsolelyonlargeorganisationsorgovernment as job creators led to a burgeoning policyinterest in national- and regional-level entrepreneurialactivity.

Entrepreneursaretheoneswhocreatenewbusinesses,driveandshapeinnovation,speedupstructuralchanges,introduce new competition and contribute to an economy’sfiscalhealth.

2.2 The ASEAN

TheAssociationofSoutheastAsianNationsorASEANisanorganisationformedtostrengthenregionalco-operationamongcountriesinSoutheastAsia.ASEANwasformedonAugust8th1967byfivecountries,namely Indonesia,Malaysia, Philippines, Singapore and Thailand – its aimwastofacilitatebetterco-operationineconomic,social,cultural, technical, educational and other fields as wellastopromoteregionalpeaceandstability. OnJanuary7th1984BruneiDarussalamjoined,followedbyVietnam(July 28th, 1995), Lao PDR and Myanmar (July 23rd,1997) and Cambodia (April 30th, 1999). Today, thesecountries made up the ten member states of ASEAN.The ten member states of ASEAN comprise close to9%of theworld’spopulationand3.17%of theworld’sgross domestic product. The resources and economic activitiesofASEANareseenbyneighbouringcountriesinAsiaand inthePacificRimasgoodopportunities fortrade, business and economic partnerships. Table 2.1summarisesanumberofkeyeconomicindicatorsfortheASEAN countries.

Table 2.1: Selected ASEAN economic indicators (as of December 2014)

Entrepreneurship is now widely acknowledged as the primary driver of sustainable economic growth.

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SourcesASEANFinanceandMacro-economicSurveillanceUnitDatabase,ASEANMerchandiseTradeStatisticsDatabase,ASEANForeignDirectInvestmentStatisticsDatabase(compiled/computedfromdatasubmission,publicationsand/orwebsitesofASEANMemberStates’nationalstatisticsoffices,centralbanksandrelevantgovernmentagencies,andfrominternationalsources)

Symbols used -notavailableasofpublicationtimen.a.notapplicable/notavailable/notcompiledDatainitalicsarethelatestupdated/revisedfiguresfrompreviouspostings Notes1/Refersto/basedonmid-yeartotalpopulationbasedoncountryprojections2/Cambodia2013countryfigureisnotyetavailable;thisfiguretakenfromIMFWEOOctober20143/ComputedbasedonIMFWEODatabaseOctober2014estimatesandthelatestactualcountrydata4/ASEANIMTSDatabase2013figuresareasof4December20145/Unlessotherwiseindicated,figuresincludeequity,reinvestedearningsandinter-companyloans6/FDI,2013figuresarepreliminaryasof15December2014

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The Organisation for Economic Co-operation andDevelopment (OECD), in its Economic Outlook forSoutheastAsia,ChinaandIndia,2014,predictsfavourablegrowthprospectsfortheASEANregion. Itpredictsthatgrowth momentum will remain robust, averaging 5.6%overtheperiod2015–2019.Thisgrowth,itbelieves,willbeanchoredbyvigorouslocaldemandinthemajorityoftheASEANcountries, and relativepolitical stability. Therecent presidential election in Indonesia,which broughtJoko Widodo to power, is regarded as a successfuland peaceful change of government. Political unrest inThailand and territorial disputes over sovereignty of theSouthChinaSeamay,however,haveadverseeffectsontourismandexportsinsomecountries.

Cambodia, Lao PDR and Myanmar are predicted tobecomenewcentresofgrowth,withgrowthexpectedto

exceed7%.Apositivespin-offofthisrapidgrowth,fromaregionalperspective, isthat itmayaccelerateregionalintegration in furtherance of the goal of an ASEANEconomicCommunity(i.e.achievingaregionalcommonmarketby2015).

–growththatissustainable,people-centred,andinclusiveinthatitseekstogeneratewidespreademploymentandtoreducepoverty(seeTable2.2).

Table 2.2: Medium-term development plans in Southeast AsiaSource: OECD Economic Outlook for Southeast Asia, China and India, 2014

Country Time period Theme/ visionBruneiDarussalam 2012-17 KnowledgeandinnovationtoenhanceproductivityandeconomicgrowthCambodia 2009-13 Growth,employment,equityandefficiencyIndonesia 2010-14 RealisationofanIndonesiathatisprosperous,democraticandjustLaoPDR 2011-15 Socio-economicdevelopment,industrialisationandmodernisation towardstheyear2020Malaysia 2011-15 Chartingdevelopmenttowardsahigh-incomenationMyanmar 2012-15 Developmentofindustry,balanceddevelopment,improvementsin education,healthandlivingstandardsandimprovedstatisticalcapacitiesPhilippines 2011-16 PursuitofinclusivegrowthSingapore 2010-2020 Highlyskilledpeople,innovativeeconomy,distinctiveglobalcityThailand 2012-2016 Ahappysocietywithequity,fairnessandresilienceunderthephilosophy ofasufficienteconomyVietnam 2011-2020 Amodern,industrialisedcountryby2020

Inthewakeoftheglobalfinancialcrisisandensuingdevelopments, theworld’seconomic landscapehasundergone significant shifts. One development hasbeen the heightened role of emerging economiesin the global context. The Economic Outlook forSoutheast Asia, China and India, 2014 argues thatASEAN has vast strengths to draw on and is wellpositioned for playing an increasingly important roleontheglobaleconomicstage.DatafromtheGlobalCompetitiveness Report, 2014 – 2015 support thisview.Forthefourthconsecutiveyear,Singaporewasranked2ndoutof the144countriesassessed.Thefive largest Southeast Asian economies –Malaysia,Thailand,Indonesia,thePhilippinesandVietnam–areallinthetophalfoftherankingsandhaveallimprovedtheir rankings. What is particularly encouraging isthat these countries have improved their rankingseveryyearsince2009.Malaysiahasmovedupfourplaces to be ranked 20th – the best ranked of theEmerging and Developing Asian nations. Thailand,despite its political uncertainties, is up six positions(31st), Indonesia is ranked 34th (up four positions),the Philippines has jumped seven places to 52ndplaceandVietnam(68th)isuptwopositions.

Over the past four decades, Emerging Asia hasmade remarkable progress in raising income levels,reducing poverty and developing manufacturing.Indonesia, Malaysia, the Philippines, Thailandand Vietnam are poised to join Japan, Korea andSingaporeintheranksoftheadvancedhigh-incomecountrieswithinthenextfewdecades,aslongastheycansustaintheircurrentrobustgrowthrate.However,the challenges of sustaining development becomemore difficult and complex as development evolves- countries need to shift away from growth that isdrivenprimarilybyfactoraccumulation,andembraceextensive growth based on productivity increasesdrivenbyimprovementsinthequalityofhumanandothercapitalandbyinnovation.Governmentpolicies

aimedatcreatinganenablingandbusiness-friendlyenvironmentwillbecritical,asSMEswillplayakeyroleinachievingsustainablegrowthandcontributingtofurtherdevelopmentintheregion.

In line with current economic thinking, ASEAN hasalready recognised the strategic role that small andmedium enterprises (SMEs) play in the economicdevelopment and growth of economies. Small andmedium enterprises are business establishments classified according to their size, as measured bytheir total assets and/or number of workers theyemploy.EachcountryhasitsownwayofclassifyingSMEs. In ASEAN the most common method ofclassifyingSMEsisaccordingtothenumberof jobsthey generate. Cambodia, Indonesia, Lao PDR,Malaysia,Philippines,Thailand,andVietnamclassifySMEsaccording to thenumberofemployees, from19inLaoPDRto300inIndonesia(UNESCAP,n.d.).Businesseswithfewerthan19workersareclassifiedas microenterprises.

ASEAN SMEs contribute between 30%-53% toGDP and 19%-31% to exports. SMEs that workas sub-contractors to large exporting firms play animportant role in intra-regional ASEAN trade. SMEsarealsocrucialtothesuccessinsustaininginnovativegrowth and development – in part because highlyinnovative enterprises tend to start out as SMEs.Smallandmediumenterprisesarenotonlyimportantin income and employment generation, but alsocontribute to genderandyouthempowermentandinclusive growth and development by engaging

An encouraging trend is that the development strategies of the Southeast Asian countries display an increased focus on the quality of growth in their respective economies

In ASEAN, SMEs account for more than 96% of all enterprises and provide 50%-85% of domestic employment (ASEAN SMEs, http://www.asean.org/communities/ asean-economic-community/category/small-and-medium-enterprises, retrieved Feb. 15, 2015).

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womenand the youth inbusinessparticipationandcontributing to growth in enterprise development inrural and poor communities.

GiventhecriticalrolethatSMEsplayintheeconomy,ASEAN has developed the ASEAN Policy Blueprintfor SME Development (APBSD) 2004-2014, whichoutlinestheframeworkforthedevelopmentofSMEsin the ASEAN region (ASEAN, 2011). Strategicprogrammes, policy measures and outputs havebeen developed to support the roadmap asembodied in the Strategic Action Plan for ASEANSMEDevelopment2010-2015.The roadmapseeksto fast-track the development of ASEAN SMEs;enhance the entrepreneurial capability throughaccess to information, markets, human resourcedevelopment,financingandtechnology;andincreasethecontributionofSMEstotheeconomicgrowthofthe region.

In order to assist policymakers inASEAN tomakemore informed decisions about how to increaseentrepreneurshipandenhanceSMMEdevelopment,both within their own countries and in the region as a whole,itisimportantthatthecurrententrepreneuriallandscapebedefinedandunderstood.TheASEANsurveyhasbeenmadepossiblethroughagenerousgrant from the International Development ResearchCentre(IDRC)–akeypartofCanada’saidprogrammesince 1970. The project will fill a critical gap inentrepreneurship research capacity and knowledgewithin Southeast Asia. As of 2013 there were fewGEMteamsinSoutheastAsiaapartfromSingapore,Thailand and Malaysia. The new GEM teams inthis project (namely Indonesia, the Philippines andVietnam) will complement and extend the GEMnetwork inSoutheastAsiaandbuildontheworkofotherGEMteamswithinthewiderregionofAsia.

The project is designed to address the critical gaps inentrepreneurshipknowledge inSoutheastAsiabybuildinglocalresearchcapacity.ThefindingsresultingfromtheGEMresearchwillbedisseminatedtopolicymakers, educators, and researchers and providean empirical basis on which to build appropriate policies for the promotion of entrepreneurship, jobcreation and inclusive growth. While the potentialbenefits of increased entrepreneurship are widelyrecognised, better evidence is needed to identifythe most effective policies for entrepreneurshippromotion in the region. Research and data on the levelandnatureofentrepreneurship in the region islimited and researchers currently lack the capacityto close knowledge gaps. Available data (e.g.World Bank, Ease of Doing Business Report andWorld Economic Forum’s Global Competitiveness

Report) approximate levels of entrepreneurship andaddressbusinessenvironments,butdonotallowforanalysis of the relationships between a broader setof environmental conditions and the entrepreneurialcharacteristics, perceptions, and aspirations ofentrepreneurs. These relationships are key to thesuccessofentrepreneurshipasatoolforgrowthandjob creation.

Thespecificobjectivesoftheprojectinclude:• Strengthenthecapacityof researcherswithin the

Southeast Asian region to undertake rigorousresearch and data analysis on entrepreneurship,and to facilitate discussion of these researchfindingsamongpolicymakers, theprivatesector,educators and researchers, particularly regardingthepromotionofwomenentrepreneurship.

• Collect scientifically sound, harmonised andpublically available datasets on entrepreneurshipandenterpriseformationinSoutheastAsia,throughthe application of the Global EntrepreneurshipMonitor (GEM)methodology, toprovideevidenceforpolicymaking.

• Contributetoadeeperunderstandingofthenature,characteristics and dynamics of entrepreneursand enterprise formation within Southeast Asia,includingperceptions,aspirationsandpracticesofwomenandyouthwithrespecttoentrepreneurshipandwhataccountsfordifferencesacrosscountries.

Anticipated outcomes and impacts include:• Improved empirical foundation for discussion,

design,andmonitoringofentrepreneurshippoliciesthat promote high-growth entrepreneurship,particularly those that promote entrepreneurshipamongwomenandyouth;

• Increased awareness of entrepreneurship,particularly high-growth entrepreneurship as wellas issues facing women in entrepreneurship,amongnationalpolicymakers;

• National teams contribute to entrepreneurshipresearch through continuedGEMmembership inpost-projectyears,aswellasadditionalacademicresearch on entrepreneurship, stimulated by theproject, beyond the core research activities ofGEM;

• National and international resources mobilised tosupport entrepreneurship research in the region; and

• A long-term positive impact on the quantity andqualityofentrepreneurship intheregion,resultinginjobcreationandinclusivegrowth.

SixASEANcountries–namely Indonesia,Malaysia,Philippines, Thailand, Singapore, and Vietnam -participatedinthe2014GEMsurvey.Theremainderofthischapterwillfocusonthesesixcountries,providingmacro-level insightsacrossthecountries,aswellascountry-levelinsightsintothepeoplewhoparticipateindifferentphasesofentrepreneurialactivity. Although ASEAN is geographically compact, theregion is diverse in terms of social and economicdevelopment. Countries participating in GEM areclassifiedasfactor-driveneconomies,efficiency-driveneconomiesorinnovation-driveneconomies,inlinewiththe categories usedby theWorldEconomicForumin its annual Global Competitiveness Reports. Thisclassification intophasesof economicdevelopmentisbasedonthelevelofGDPpercapitaandtheextenttowhichthecountriesarefactor-drivenintermsoftheshares of exports of primary goods in total exports(Schwab and Salari-Martin, 2014). GEM researchargues that patterns in entrepreneurial activity mayalso be influenced, in part at least, by phase ofeconomicdevelopment.

• Factor-driven economies: These are countries in the early stages of economic development,typically with a large agricultural sector. Themajority of the population tends to live in ruralareas.Industrialactivityisoftendependentontheextractionofnaturalresources.Migrationfromruraltoperi-industrialareasmay feednecessity-basedentrepreneurship, as the surplus workers areforced into self-employment in order to make aliving. The Philippines and Vietnam are classifiedasfactor-driveneconomies.

• Efficiency-driven economies: As the industrial sector develops further, higher productivityis pursued through economies of scale anddevelopment of financial institutions. Increasingproductivity,combinedwiththeopeningupofanindependent supply of financial capital from theemergingbankingsector,expandsopportunitiesforthedevelopmentofsmall-scaleandmedium-sizedmanufacturing sectors. Indonesia, Malaysia andThailandareefficiencydriven.

• Innovation-driven economies:Asaneconomymatures, a gradual shift may occur towardsan expanding service sector that caters to the

needs of an increasingly affluent population.The industrial sector evolves and experiencesimprovementsinvarietyandsophistication.Thisistypically associatedwith increasing research anddevelopment,knowledgeintensityandinnovation.Singaporeisaninnovation-driveneconomy.

2.3 ASEAN and the Asian Economic Community (AEC): Awareness and Engagement

“AEC2015”isnolongeranabstractbutarealitythatthe regional governments need to embrace beforethe end of the year 2015. Entrepreneurship, as afactorcontributingtogrowthandprosperity ineveryeconomy, plays an important role in the upcomingASEANEconomicCommunity.But-howreadyaretheentrepreneurs?Twowordscometomindbeforethetencountriesaresupposedtojoinforcesasasingleeconomiccommunity:anticipationandinsecurity.

The countries represented in this report are highlydiverse,both fromaculturaland fromaneconomicpointofview.Economicgrowthisalsoaccompaniedbysignificantdisparities in incomeandexpendituresas seen in the larger ASEAN economies, wherehighinequalityexistsbetweenurbanandruralareaswithin the same country (AsianDevelopment Bank,2012).Inasocialcontext,themainnationalreligionsrepresented in the region are Buddhist (Cambodia,Lao PDR, Myanmar, Singapore, Thailand), Muslim(Brunei, Indonesia, Malaysia), Catholic Christians(Philippines) or none (Vietnam) besides additionalminorityreligionsineverycountry. In theory, no one doubts the potential of a singlemarket with 600million people and a workforce ofmore than 400 million, a combined GDP of 3,600billionUS$andanabundanceofnaturalresources.

ASEAN has its fair share of detractors as well assupporters.AwarenessofASEAN,andthisyeartheAsianEconomicCommunity(AEC),doesfallshortasindicatedbytheGEMAECsurvey(describedbelow).Atthebeginningofthisresearchstudy(June,2014,)both new and established entrepreneurs were asked three key questions about the AEC. The

Reaching the full potential of the AEC, however, requires concerted mutual efforts, as well as acknowledgement of entrepreneurship as a key driver of sustainable economic growth and job creation.

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countries that participated in the AEC survey wereMalaysia,Indonesia,VietnamandthePhilippines.Theentrepreneurswereaskedtoratetheextenttowhichtheyagreedwiththefollowingstatements:

1. The regionalisation of ASEAN as an economic community has increased competition for my businesses from both existing and new competitors.

A total of 36%, comprised equally of both newbusinessesandestablishedbusinesses,agreedorstronglyagreedthatthiswasthecase.

2. Common regional regulations within ASEAN as an economic community would make it easier for new businesses to start up and existing businesses to operate.

34%ofnewbusinessesagreedorstronglyagreedthattheeaseofoperatingtheirbusinesseswouldincrease.Establishedbusinesseswereonlyslightlymoreconvinced,at36%.

3.As a whole my business has benefitted or willbenefit from the formationofASEAN’s economiccommunity initiatives.

In terms of benefitting from the AEC, only 33%of newbusinesseswereconvincedcompared to36%ofestablishedbusinesses.

Approximately 80% of Southeast Asia’s populationwascoveredbytheAECsurvey.Theresponsestothethreekeyquestionsthusindicatethatthere ismuchthatremainstobedonetodotoraiseawarenessoftheAEC.Currently,onlyalittlemorethanonethirdofnewandexistingbusinessesbelievethattheAECwillbenefitthem. There aremanyother issues and challenges aheadfor each country to deal with, coupled with theopportunitiesandthefearsregardingtheAECandits“singlemarket and production base” by the end oftheyear2015(ASEAN,2010).Thefivecoreelements–the free flowofgoods, servicesand investment,afreerflowofcapitalandthefreeflowofskilledlabour,willaffectnearlyallenterprisesintheregion.Increasedcompetition may hinder SME development, if theirspecific needs and concerns, as addressed in thisreport(forexample:accesstofinance,toinformationandmarkets;skillsdevelopment;education)arenotaddressed and if public or private initiatives fail toincrease entrepreneurial capacities to leverage anASEAN integration. Stimulating entrepreneurship and supporting it appropriately is a crucial aspectin this process of economic integration. In tandem,an aspirational entrepreneurial mind-set needs to be cultivatedwhereinopportunities are exploitedwithin

thiswidermarket.ASEANentrepreneurswillthenbeablecontributesignificantlytointra-regionaleconomicactivities. Itmightbeof value toevaluate regionswhichhaveundergonesimilarexperiences,suchastheEuropeanUnion, and to gain insights from their experiences.An initiativeof theEuropeanUnion in2006,namely“The Oslo Agenda for Entrepreneurship Educationin Europe” as the outcome of the conference on“Entrepreneurship Education in Europe: Fostering Entrepreneurial Mindsets through Education andLearning”,gatheredexperiencesandgoodpracticesand proposed ways to move forward. Thesesuccessful insights from Europe could serve asbest-practicemodelsand, inpart,be transferred totheASEANcountries(EU,2006).Recommendationsinclude a catalogue of initiatives, addressing thefollowingtopics:

• frameworkforpolicydevelopment;

• supporttoeducationalestablishments;

• supporttoteachersandeducators;

• entrepreneurship activities in schools and highereducation;

• buildinglinksandopeningeducationtotheoutsideworld; and

• communicationactivities.

2.4 The entrepreneurial pipeline

As such, the Adult Population Survey (APS) isdesigned to allow for the measurement andassessment of individual participation across therange of phases comprising entrepreneurial activity:potentialentrepreneurship,entrepreneurialintentions,nascentandnewbusinessactivity,progression intoestablishedbusinessownership,andthereasonsforbusinessdiscontinuance.Thisprocesscanbeviewedas a pipeline, where people participating in eachphaseare thesourceof thosepotentiallyadvancingtothenextphase(Figure2.1).

GEM sees entrepreneurial activity as a continuous process rather than as individual events.

Figure 2.1: The entrepreneurial pipeline

It is important to note that entrepreneurial activity is the third phase of the entrepreneurial pipeline, and thusdependentonahealthypoolofpotentialandintentionalentrepreneurs.Ifpolicymakersandserviceprovidersaretobesuccessfulintheireffortstostimulateandsupportnewgenerationsofentrepreneurs,theythereforerequiresoundinformationontheearlierphasesofthepipeline–namelypotentialandintentionalentrepreneurs.

TheGEMmodelrecognisesentrepreneurialattitudes,activityandaspirationasdynamicinteractivecomponentsofnationalentrepreneurialenvironmentsandtheadultpopulationsurveyincludesquestionsrelatingtoallthreeofthesecomponents.Entrepreneurialactivitydoesnottakeplaceinavacuumandalthoughnotadirectstepintheentrepreneurialprocess,societalattitudeshaveaprofoundinfluenceonanumberofactivitiesinthepipeline.Entrepreneurialattitudesandperceptionsplayanimportantpartincreatinganentrepreneurialculture–althoughthiswillhaveanimpactonallphasesoftheentrepreneurialpipeline,theinfluenceonthepoolofpotentialandintentionalentrepreneursislikelytobemostsignificant.

“Theentrepreneurshipprocessisacomplexendeavourcarriedoutbypeoplelivinginspecificculturalandsocialconditions. For this reason, thepositiveor negativeperceptions that society has about entrepreneurship canstronglyinfluencethemotivationsofpeopletoenterentrepreneurship.Iftheeconomyingeneralhasapositiveattitudetowardsentrepreneurship,thiscangenerateculturalandsocialsupport,financialandbusinessassistance,andnetworkingbenefitsthatwillencourageandfacilitatepotentialandexistingentrepreneurs.”(GEM2012GlobalReport,page18)

Inordertoassesssocietalperceptionsregardingentrepreneurship,thefollowingthreequestionsareincludedinthe APS:

• Dopeopleconsiderstartinganewbusinessagoodcareerchoice?

• Dopeopleconsidersuccessfulentrepreneurstohaveahighlevelofstatus?

• Dosuccessfulentrepreneursgarnersignificantmediaattention?

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Table2.3summarisestheresponsestothesequestionsforthesixASEANcountries.Overall,entrepreneurshipisregardedpositively intheASEAN-6region,withtheaveragescoresforall threemeasuresabovetheGEMaverage.Onaverage,two-thirdsofpeople in the regionseeentrepreneurshipasagoodcareerchoice,withonlyAfricaandLatinAmerica&Caribbeanscoringmarginallyhigher.TheASEAN-6standssignificantlyapart,onaregionalbasis,intermsofitshighlevelofmediaattention,with81%believingthatthereishighmediavisibilityforsuccessfulentrepreneurs.

Attheindividualcountrylevel,thePhilippinesshowsconsistentlyhighlevelsofsocietalattitudesacrossallthreemeasures.Malaysia,ontheotherhand,reportsthelowestregionallevelsonallthreeindicators,byasignificantmargin.Intermsofentrepreneurshipasagoodcareerchoiceandstatusforsuccessfulentrepreneurs,italsoscoressubstantiallybelowtheGEMaverage.

Table 2.3: Societal attitudes in ASEAN-6 countries and comparisons with other regional averages, GEM 2014

Country Entrepreneurship as High status to Media attention for a good career choice successful entrepreneurship entrepreneurs Indonesia 72.9 78.0 84.8Malaysia 50.4 50.0 69.8Philippines 81.8 78.1 84.7Singapore 51.7 62.9 79.1Thailand 73.6 71.1 80.3Vietnam 67.2 75.9 86.8ASEANaverage(unweighted) 66.3 69.3 80.9GEMaverage(unweighted) 62.46 68.11 63.30 Regional averages Africa(unweighted) 71.5 77.6 72.9Asia&Oceania(unweighted) 63.4 69.8 74.4LatinAmerica&Caribbean(unweighted) 66.8 64.6 67.3EuropeanUnion(unweighted) 56.9 66.6 53.3Non-EuropeanUnion(unweighted) 63.3 72.9 51.3NorthAmerica(unweighted) 61.0 73.3 71.8

2.4.1 Potential entrepreneurs

GEMconsidersthosewhoperceivegoodopportunitiesforstartingabusiness,aswellasbelieve theyhavethe required skills, the potential entrepreneurs in asociety.Itisimportanttonotethat,atthisstageoftheentrepreneurial pipeline, they have not yet decidedwhethertheywillpursuetheopportunityornot.

Opportunities(ortheperceptionofgoodopportunities)play an important role in determining whether anindividual will even consider starting a business.Startingabusinessisacomplexissue.Peoplemaydecide to start a business because they recognisespecific entrepreneurial opportunities. Others maydecide to become entrepreneurs and consciouslyundertake a search for ideas. Entrepreneurs mayrecogniseopportunitieswellinadvanceorjustbeforetheysetuptheirbusinesses.

The quantity and quality of the opportunities thatpeople perceive and their belief about their owncapabilitiesmaywellbeinfluencedbyvariousfactorsin their environment, such as economic growth,cultureandeducation.Whileopportunityperceptionsdemonstrate people’s views of the environmentaround them, beliefs about capabilities are morereflectiveofself-perceptions.

Togetanestimateofthesizeofthepoolofpotentialentrepreneurs,theAPSaskstwoquestions:

• In the next six months will there be goodopportunities for starting a business in the areawhereyoulive?

• Doyouhavetheknowledge,skillsandexperiencerequiredtostartanewbusiness?

Anotherfactortakenintoaccountisthefearoffailure,assessedasapercentageofthepeoplewhoperceiveopportunities in the area inwhich they live. Fear offailurecanbeinfluencedbyintrinsicpersonalitytraits,aswellasbysocietalnormsand regulations.Muchabout entrepreneurship can be taught or acquiredthroughpracticalexperience,butpropensity for riskcannot. For the risk-averse person, the downsiderisk of failure often outweighs the most promisingopportunities or expectations, even if the potentialreturns are considerably higher than the next best

alternative. In some countries, the legal and socialramificationsofbusinessfailuremayactasastrongdeterrent,reducingthepoolofpotentialentrepreneurs.

Table 2.4 shows that, from a regional perspective,ASEAN-6reportsaveragescoresintermsofperceivedopportunities and capabilities (despite the generallypositive social attitudes towards entrepreneurshipshowninTable2.3).Africa,LatinAmerica&Caribbeanand North America all show significantly higheraverages in terms of perceived opportunities, whileAfricaandLatinAmerica&Caribbeanhavemarkedlymoreconfidenceintheirownabilitytostartabusiness.Coupledwiththefairlymoderatenumbersofpeoplein the ASEAN-6 region who see opportunities and believetheyhavethecapabilitiestopursuethem,thehigh regional score for fear of failure is of concern.Only the EuropeanUnion scores (marginally) higheron this indicator.

At the individual country level, theASEAN-6 showsdivergent results. Singapore is a definite outlier interms of perceived opportunities and capabilities –itsscoresfortheseindicatorsarealmostthreetimeslower than the combined average for the other fivecountries. Singapore is the only innovation-driveneconomyintheASEAN-6,butthisdoesnotexplainthemagnitudeofthediscrepancy–theaveragesforthe innovation-driveneconomies,whichparticipatedin GEM 2014 are 38.8 for perceived opportunitiesand 42 for perceived capabilities, still arounddouble Singapore’s scores. Table 2.3 indicates thatentrepreneurshipisparticularlyhighlyregardedinthePhilippines, and the trend continues here with thePhilippinesdisplayingamongthehighestlevelsofbothperceived opportunities and perceived capabilities.Malaysia’s low level of perceived capabilities, inconjunction with its relatively negative societalattitudes towards entrepreneurship, is a concern –itsscoreforfearoffailure,however,isthelowestfortheASEAN-6region.Vietnamhasthehighestfearoffailurefortheregion.

However,Vietnamisafactor-driveneconomy,wherejobopportunitiesaremorerestrictedandsocietyoftenseesentrepreneurshipasameansto improveone’seconomic and social standing. Vietnam’s score of50.1issignificantlyhigherthanboththeGEMaverageandtheaverageof31.4forfactor-driveneconomiesthatparticipatedinGEM2014.

Over the years, GEM has found that individuals who are confident in their skills or believe they possess the necessary skills to start a business are four to six times more likely to be involved in some form of entrepreneurial activity.

Fear of failure tends to be more common in developed economies (such as Singapore), where the greater prevalence of alternative career options can create the impression that people have more to lose by forgoing these other opportunities.

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Table 2.4: Perceived opportunities, capabilities and fear of failure in ASEAN-6 countries and comparisons with other regional averages, GEM 2014

Country Perceived Perceived Fear of opportunities capabilities failure*Indonesia 45.5 60.2 38.1Malaysia 43.4 38.4 26.8Philippines 45.9 66.1 37.7Singapore 16.7 21.4 39.4Thailand 47.3 50.1 42.4Vietnam 39.4 58.2 50.1ASEANaverage(unweighted) 39.7 49.1 39.1GEMaverage(unweighted) 42.67 50.96 34.16 Regional averages Africa(unweighted) 62.3 65.2 23.8Asia&Oceania(unweighted) 36.6 44.6 37.5LatinAmerica&Caribbean(unweighted) 49.4 64.5 27.7EuropeanUnion(unweighted) 34.8 42.3 40.7Non-EuropeanUnion(unweighted) 42.6 41.7 32.4NorthAmerica(unweighted) 53.2 51.2 33.0*Fear of failure assessed for those perceiving opportunities

Table 2.5: Entrepreneurial intentions in ASEAN-6 countries and comparisons with other regional averages, GEM 2014

Country Entrepreneurial intentions*Indonesia 27.4Malaysia 11.6Philippines 42.8Singapore 9.4Thailand 21.8Vietnam 18.2ASEANaverage(unweighted) 21.9 Regional averages Africa(unweighted) 45.1Asia&Oceania(unweighted) 20.5LatinAmerica&Caribbean(unweighted) 28.8EuropeanUnion(unweighted) 12.1Non-EuropeanUnion(unweighted) 9.7NorthAmerica(unweighted) 12.0Average(factor-driven) 40.2Average(efficiency-driven) 22.8Average(innovation-driven) 12.3GEMaverage(unweighted) 20.9*Intentions assessed among non-entrepreneur population

Theregionallevelofentrepreneurial intentionisencouraging,withonlyAfricaandLatinAmerica&Caribbeanshowinghigherlevelsofentrepreneurialintention.InlinewiththeirconsistentlyhighlypositivescoresinTables2.3and2.4,thePhilippinesandIndonesiatoptherankingsamongtheASEAN-6countries.InthePhilippines,whichexperienceschronicunemploymentandunderemployment,akeypriorityistoimprovejobcreation–thehighlevelofentrepreneurial intention is thusencouraging.Vietnam’s levelofentrepreneurialintentionisverylowforafactor-driveneconomy–theexceptionallyhighscoreforfearoffailureisprobablyasignificantfactorinthisrespect.Malaysia’slevelofentrepreneurialintentionisonlyhalftheaverageforefficiency-driveneconomies.TheEconomicOutlookforSoutheastAsia,ChinaandIndia,2014suggeststhatstructuralproblemsaffectingtheeducationsystemremainastumblingblockinMalaysia’seffortstoimproveproductivity–SMEstendtobeespeciallyhardhitbydifficultiesinfindingskilledlabour.Malaysia’slowscoreforperceivedcapabilities(Table2.4)maybesignificantinthisrespect.

2.4.2 Intentional entrepreneursPotentialentrepreneursseegoodopportunitiesforstartingabusinessandbelievethattheyhavethenecessaryskills,knowledgeandexperiencetostartabusiness.However,perceivingagoodopportunityandhavingtheskillstopursueitwillnotnecessarilyleadtotheintenttostartabusiness.Individualswillassesstheopportunitycosts,andrisksandrewards,ofstartingabusinessversusotheremploymentpreferencesandoptions,iftheseareavailable.Inaddition,theenvironmentinwhichpotential,intentionalandactiveentrepreneursexistneedstobesufficientlyenablingandsupportive.

Intentionalentrepreneurs,thenextstageinthepipeline,expresstheirintentionofstartingabusiness.GEMdefinesentrepreneurialintentionasthepercentageofthe18–64yearoldpopulation(individualsalreadyengagedinanystageofentrepreneurialactivityexcluded)whointendtostartabusinesswithinthenextthreeyears.Thisstageisimportantintheentrepreneurialprocessasastrongassociationexistsbetweenentrepreneurialintentionandactualentrepreneurialbehaviour.

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2.4.3 Entrepreneurial activity

Even when individuals have favourable perceptionsof entrepreneurship and exhibit entrepreneurialintentions, it is by no means certain that this willbe translated into actually starting businesses.According to the GEM Global 2008 Report, thereare several assessments to be made, which mayormay not be conscious. There is the assessmentof opportunity costs, which involves comparing theexpectedreturnsofentrepreneurshiptotheexpectedreturns of an alternative occupation, of which themost common is being employed. There is also arisk-rewardassessment:eveniftheexpectedreturnsfrom entrepreneurship are considerably higher thanthebestalternative,theperceivedrisksinvolvedmaybe too high for an individual who is thinking aboutstartingabusiness.Avarietyofnationalcharacteristics

couldcontributetothisrisk-assessment,forexample,“red tape” which could present unfavourableadministrativeburdensorhighcoststothosethinkingabout starting a business; access to resources and technical assistance; levels of corruption andcrime; the attractiveness of the market; and thecompetitiveenvironment.Itisusefulforpolicymakersto determine the factors that contribute to the falloffbetween intentionalandactiveentrepreneurs,asthishasastrong influenceon thenextstageof theentrepreneurialpipeline-actuallystartingabusiness.Figure 2.2 highlights the relationship between these phases of the entrepreneurial pipeline (namelyentrepreneurial intention, early-stage entrepreneurialactivity and established business rate) for the sixASEAN countries.

Figure 2.2 shows that for themajority of ASEAN-6countries, there is a fall offbetween intentional andactive entrepreneurs. This is most noticeable inthe Philippines and Indonesia. Both these countries have highly positive societal attitudes towardsentrepreneurship,whichtranslatesintoahealthypoolof potential and intentional entrepreneurs. The levelof early-stageactivity,however, is less thanhalf thenumber with entrepreneurial intentions. In Singapore and Thailand, on the other hand, entrepreneurialintentiontranslatesstronglyintoactualentrepreneurialactivity. Another positive trend highlighted in Figure2.2 is that formost of the ASEAN-6 countries, thetransition from start-ups to successful establishedbusinesses poses minimal challenges.

Thecentral indicatorofGEMistheTotalEarly-stageEntrepreneurial Activity (TEA) rate, which measuresthe percentage of the adult population (18 to 64years)thatareintheprocessofstartingorwhohavejust started a business. This indicator measures individualswhoareparticipating ineitherof the twoinitialprocessesoftheentrepreneurialprocess:

• Nascententrepreneurs–thosewhohavenotpaidsalariesorwagesformorethanthreemonths,and

• Newbusinessowners - thosewhohavemovedbeyondthenascentstageandhavepaidsalariesandwages formore than threemonths but lessthan 42 months.

Measuring these two types of entrepreneurs isimportantasitprovidesthelevelofearly-stageactivitythat will hopefully be transformed into establishedbusinesses.

GEMhasconsistentlyshownthatthereisacorrelationbetweenGDPpercapitaandTEArates(GEMGlobalReport 2012). Generally TEA rates are highest infactor-driveneconomies,wheretheGDPpercapitaislow,andthendecreaseinefficiency-driveneconomiesas the GDP per capita increases. This could be attributed to the increaseof industrialisation. Largerestablished firms play an increasingly importantrole in the economy, providing the option of stableemployment for a growing number of people as aviable alternative to the risks of self-employment,thusdisplacingsomeofthepotentialentrepreneurialactivity.High-incomecountries are characterisedbygreater availability of resources and more affluentmarkets, which may stimulate an increase inopportunity-motivated entrepreneurship. However,thelevelofTEAcouldalsobeinfluencedbythelevelof unemployment in a country. One would expectentrepreneurialactivitytobehigherwithhigherlevelsofunemployment,asestablishedcompaniesandtheformaleconomyareunabletomeetthedemandforjobs.

Figure 2.2: Entrepreneurial pipeline for ASEAN-6 countries, GEM 2014

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Table2.6capturesactivitythroughoutthebusinesscycleforthesixASEANcountries.

AlthoughthenascententrepreneurshipratefortheASEAN-6regionisdisappointinglylow,thisisoffsetbyanewbusinessratewhichisthesecondhighestregionalaverage(onlyAfricareportsahigheraverage)andisalmostdoubletheGEM2014average.TheestablishedbusinessrateisthehighestregionalaverageandisalsosignificantlyabovetheGEMaverage.

ThecontributionofnascententrepreneurialfirmstoeconomicdevelopmentandgrowthinGDPisnegligible,compared tonewandestablishedfirms. Informationon the levelofestablishedbusinessesisimportantasitprovidessomeindicationofthesustainabilityofentrepreneurshipinaneconomy.Thesebusinesseshavemovedbeyondthenascentandnewbusinessphases,andareable tocontribute toacountry’seconomy through theon-going introductionofnewproducts and processes and amore stable base of employment. ASEAN-6’s high new firm

Table 2.6: Entrepreneurial activity in ASEAN-6 countries and comparisons with other regional averages, GEM 2014

Nascent New Early-stage Established DiscontinuationCountry entrepreneurship business entrepreneurial business of businesses rate ownership activity (TEA) rate

Indonesia 4.4 10.1 14.2 11.9 4.2Malaysia 1.4 4.6 5.9 8.5 2.0Philippines 8.2 10.5 18.4 6.2 12.6Singapore 6.4 4.8 11.0 2.9 2.4Thailand 7.6 16.7 23.3 33.1 4.2Vietnam 2.0 13.3 15.3 22.2 3.6ASEANaverage(unweighted) 5.0 10.0 14.7 14.1 4.8 Regional averages Africa(unweighted) 14.1 13.0 26.0 13.2 14.0Asia&Oceania(unweighted) 5.8 7.4 13.0 10.8 3.9LatinAmerica&Caribbean(unweighted) 11.4 6.7 17.6 8.0 5.4EuropeanUnion(unweighted) 4.8 3.2 7.8 6.7 2.6Non-EuropeanUnion(unweighted) 3.3 2.8 6.0 5.7 3.0NorthAmerica(unweighted) 8.8 4.9 13.4 8.2 4.1 Average(factor-driven) 12.4 11.7 23.3 12.7 11.0Average(efficiency-driven) 8.2 6.2 14.0 8.5 4.4Average(innovation-driven) 5.3 3.4 8.5 6.7 2.7GEMaverage(unweighted) 7.6 5.8 13.1 8.4 4.7

Attheindividualcountrylevel,Malaysiareportsthelowestearly-stageentrepreneurialactivityintheregion,byasignificantmargin.SingaporeshowsasignificantlyhigherTEAratethantheaverageforinnovation-driveneconomies.Ontheotherhand,itsestablishedbusinessrateisthelowestintheregion.Ofgreaterconcernisthefact that theTEArate isalmost four timeshigher thantheestablishedbusinessrate, suggesting a poor level of new firm sustainabilitywhich is contrary to theregionaltrend.Despitethepoliticalturmoilitexperiencedduring2014,Thailandistheregion’shighestperformer-bothTEAandestablishedbusinessratesarethehighestintheregionbyasubstantialmargin,aswellasthreeandfourtimeshigher,respectively,thantheaveragesforefficiency-driveneconomies.

Table 2.7: Reasons for starting a business in ASEAN-6 countries and comparisons with other regional averages, GEM 2014

Country Necessity-driven (% of TEA) Improvement-driven opportunity (% of TEA)Indonesia 20.5 37.9Malaysia 17.5 64.0Philippines 29.4 33.5Singapore 11.4 70.8Thailand 17.8 71.2Vietnam 29.7 53.3ASEANaverage(unweighted) 21.1 55.1 Regionalaverages Africa(unweighted) 26.3 46.9Asia&Oceania(unweighted) 23.4 53.5LatinAmerica&Caribbean(unweighted) 22.7 49.7EuropeanUnion(unweighted) 22.8 47.9Non-EuropeanUnion(unweighted) 29.7 42.3NorthAmerica(unweighted) 14.6 65.1 Average(factor-driven) 28.2 47.0Average(efficiency-driven) 27.2 45.1Average(innovation-driven) 18.0 54.9GEMaverage(unweighted 23.5 49.4

The high level of sustainability of start-ups in ASEAN-6 relative to other regions in the GEM sample is encouraging.

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Reason Indonesia Malaysia Philippines Singapore Thailand VietnamOpportunitytosell 2.8 0 0.5 2.8 2.6 0Businessnotprofitable 19.8 19.6 40.5 28.1 17.4 12.9Problemsgettingfinance 26.4 21.7 24.5 16.8 14.7 15.7Anotherjoborbusinessopportunity 14.7 14.4 4.1 9.4 2.9 14.3Exitwasplannedinadvance 13.2 9.9 0.5 4.3 0.8 7.1Retirement 2.5 0 0 7.9 5.0 5.7Personal reasons 19.0 34.4 24.4 30.7 40.9 28.6Incident 1.0 0 5.6 0 15.7 15.7

AprimaryobjectiveofGEMistoexploredifferencesinnational levelsand typesofentrepreneurshipandto link these to job creation and economic growth.The relative prevalence of opportunity-motivatedversus necessity-motivated entrepreneurial activityprovidesusefulinsightsintothequalityofearly-stageentrepreneurialactivityinagivencountry.

Necessity based early-stage entrepreneurial activity: Thisisdefinedasthepercentageofthoseinvolved in early-stage entrepreneurial activity thatclaim to be driven by necessity (having no betterchoiceforwork)asopposedtoopportunity.

Opportunity based early-stage entrepreneurial activity:This is thepercentageof those involved inearly-stage entrepreneurial activity driven purely orpartlybyopportunity,asopposedtofindingnootheroptionforwork.Thisincludestakingadvantageofabusiness opportunity or having a job but seeking abetteropportunity.

Improvement-driven opportunity early-stage entrepreneurial activity:This is thepercentageofthose involved in early-stage entrepreneurial activitywho(1)claimtobedrivenbyopportunityasopposedto finding no other option for work; and (2) whoindicatethatthemaindriverforbeinginvolvedinthis

Information on the rate of business discontinuanceis another indicator of the sustainability ofentrepreneurship in an economy. The ASEAN-6regionalaveragefordiscontinuanceis4.8(seeTable2.6),whichissimilartotheGEMaverage.TheregionhasapositiveratioofTEAtobusinessdiscontinuance.

opportunity isbeing independentor increasing theirincome,ratherthanjustmaintainingtheirincome.

One would therefore expect economies withhigher developmental levels to have a high ratio ofopportunityentrepreneurstonecessityentrepreneurs.Table2.7 summarises themotivations for starting abusinessforthesixASEANcountries.ASEAN-6hasthe second highest regional percentage of peopledrawntogointobusinessbecauseoftheopportunitytoimprovetheirincome.SingaporeandThailandhavethehighest ratesof improvement-drivenopportunitymotivation in the region. This is particularly positivein the case of Thailand, given its robust level ofearly-stage entrepreneurial activity. Vietnamand thePhilippineshavethehighestpercentageofnecessityentrepreneurs. Factor-driven economies have lowerGDPpercapita,indicatingthatalargepercentageofthepopulationiseitherunemployedorunderemployed(i.e. theyearnvery lowwages). Individuals thereforestart businesses because they are unable to findemployment,ortosupplementlowwages.Arelativelyhigh proportion of entrepreneurial activity, therefore,tendstobemotivatedbynecessity.

ThePhilippines is theonlycountry inASEAN-6witha high business discontinuance rate – at 12.6, it isthree times the regional average. In thePhilippines,for every person exiting a business 1.5 people areengagedinearly-stageentrepreneurialactivity. The reasons forbusinessdiscontinuancearemanyandvaried.Somereasonscouldbeseenaspositive,such as the opportunity to sell, pursuing anotheropportunity or planned retirement. On the otherhand,exitsmaybeduetolackofbusinessprofitability,problemswithaccessingfinanceandrunningoutofworking capital. Table 2.8 summarises the reasonsforbusinessexitforthesixASEANcountries.Manyof the businesses in the region close for financialreasons–eitherbecause theyarenotprofitable,orencounterproblemsinaccessingfinancingtosustainthebusiness.Thisisaparticularlyperniciousproblemin the Philippines, accounting for 65% of businessdiscontinuance. In Thailand, however, businessesclosemainlyduetopersonalreasons.

2.5 Profile of the ASEAN entrepreneurs

GEM’sfocusonindividual-levelparticipationenablesthis research to reveala rangeofdemographicandother characteristics about entrepreneurs. The researchalsomakespossibleanassessmentof thelevelofinclusivenessinaneconomy—inotherwords,theextenttowhichvariousgroups(forexampleage,genderoreducation level)engage inentrepreneurialactivity.This informationcanassistpolicymakers intargeting effective interventions aimed at increasingparticipationaswellasproductivityintheeconomy.

2.5.1 Age

Theinfluenceofageonentrepreneurialactivitytendsto be very similar throughoutGEM. The prevalence

of early-stage entrepreneurial activity tends to berelativelylowinthe18-24yearscohort,peaksamong25-34yearolds,andthendeclinesasageincreases.The higher prevalence of entrepreneurial activitybetweentheagesof25and44couldbeattributedto the fact that these individuals have had time todeveloptheirskillsandknowledgethrougheducationas well as through work experience, building theirconfidenceintheirownabilities.Acriticalfactoristhatthey may have accumulated other resources suchas networks, personal savings and access to otherfinancialresources.

Youngpeopleoftenhavenocredithistoryorassetsto serve as collateral in order to secure loans fromfinancial institutions. In the 25 – 34 age cohort, inaddition, they may be a little less established in acareer that may offer high salaries and perks (lessopportunity costs) or theymay have fewer financialobligations such as families to support and loanrepayments.

Table 2.9 indicates the participation in early- entrepreneurial activity in the ASEAN-6 region as awhole is similar to the spread in the GEM sample.It is characterised by an almost equal distributionof entrepreneurial involvement across the differentagegroups.Froman individualcountryperspective,ThailandandthePhilippinesarenotableforthehighlevel of entrepreneurial activity in all agecategories,as well as the significant proportion of the adultpopulation in the55–64agecategoryengaged inTEA(closetothreetimestheGEMaverage).

Table 2.9: TEA rates by age group in ASEAN-6 countries, GEM 2014 (% of adult population in each age category involved in TEA)

Table 2.8: Reasons for business exit in ASEAN-6 countries, GEM 2014

Country 18 - 24 years 25 - 35 years 35 - 44 years 45 - 54 years 55 - 64 yearsIndonesia 9.8 16.7 15.8 14.4 10.0Malaysia 3.9 7.7 5.5 8.3 2.3Philippines 12 19.4 20.1 19.2 25.1Singapore 10.3 13.4 14.1 8.4 7.4Thailand 14.6 28.9 26.3 22.1 19.4Vietnam 12 22.1 15.0 12.9 8.6ASEANaverage(unweighted) 10.4 18.1 16.1 14.2 12.2GEMaverage(unweighted) 11.0 16.6 14.8 12.2 8.4

GEM has shown that businesses started by opportunity-driven entrepreneurs are much more likely to survive and employ people than those started by necessity-driven entrepreneurs.

Although access to finance is a perennial problem for all small businesses, the youth are particularly vulnerable to this limitation.

For every person exiting a business in 2014, three were engaged in early-stage entrepreneurial activity.

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2.5.2 Gender

Althoughtheratioofmaletofemaleparticipationinearly-stageentrepreneurialactivityvaries considerably across the total sample of GEM countries, reflecting differencesin culture and customs regarding female participation in the economy, a consistentfindingisthatmenaremorelikelytobeinvolvedinentrepreneurialactivity.Itshouldberecognisedthatwomenenterentrepreneurshipformanyofthesamereasonsasmales,suchastosupportthemselvesandtheirfamily,toattainfinancialindependenceandtoenrichtheirliveswithmeaningfulcareers.

Table2.10indicatesthattheASEAN-6regiondivergesstronglyfromtheGEMnormintermsoftheproportionofwomeninvolvedinearly-stageentrepreneurialactivity.WiththeexceptionofSingapore,womenareaslikelyormorelikelytobeinvolvedinearly-stageentrepreneurialactivityasaremen.

2.5.3 Education level

Aneducatedworkforce,appropriatelyskilledandwiththecapacityforinnovation,isvitaltoaneconomy’scompetitiveness,productivityandgrowth.Asoundeducationsystemisthereforeoneofthekeyimperativesforacompetitivecountry,asitisreasonabletobelievethatagoodqualityeducationsystemwillhaveapositiveinfluenceonindividuals’self-efficacyandself-confidence,therebyincreasingthechancesofsuchindividualsnotonlystartingabusinessbutalsobeingable tosuccessfullynavigatecompetitiveandchangingbusinessenvironments

Table 2.10: TEA rates by gender in ASEAN-6 countries, GEM 2014 (% of adult population for each gender involved in TEA)

Country Male TEA rate Female TEA rate Ratio male to femaleIndonesia 13.2 15.2 0.86Malaysia 5.1 6.8 0.82Philippines 15.9 20.8 0.73Singapore 14.8 7.2 2.01Thailand 24.5 22.1 1.06Vietnam 15.1 15.5 0.95ASEANaverage(unweighted) 14.8 14.6 1.0GEMaverage(unweighted) 15.7 12.2 1.28

Table 2.11: TEA rates by education level in ASEAN-6 countries, GEM 2014

Table 2.12: TEA rates by industry sector in ASEAN-6 countries, GEM 2014

Country Some secondary Secondary degree Post-secondary GraduateIndonesia 12.7 14.0 17.7 -Malaysia 2.1 3.3 7.0 9.6Philippines 12.1 17.4 22.9 26.7Singapore 6.1 8.5 12.1 16.3Thailand 21.0 25.6 23.3 34.5Vietnam 13.9 16.0 16.0 7.1

Indonesia Malaysia Philippines Singapore Thailand VietnamAgriculture,forestry,fishing 2.3% 4.2% 4.7% 0.5% 10.6% 0.3%Mining,construction 2.3% 4.2% 1.4% 2.9% 1.5% 1.7%Manufacturing 23.4% 6.8% 3.0% 2.9% 6.0% 1.0%Utilisation,transport,storage 0.6% 1.7% 1.6% 3.8% 1.7% 0.7%Wholesaletrade 5.3% 5.9% 3.8% 6.3% 6.8% 3.1%Retailtrade,hotels,restaurants 49.0% 61.9% 83.2% 45.7% 58.5% 80.1%Information&communication 0.1% 2.5% 0.0% 6.3% 2.3% 2.4%Financialintermediation,realestateactivities 1.8% 2.5% 0.3% 6.3% 1.7% 1.7%Professionalservices 6.0% 6.8% 0.3% 7.7% 1.0% 0.3%Administrationservices 4.1% 1.7% 0.5% 2.4% 0.8% 0.7%Government,health,education,socialservices4.5% 1.7% 1.1% 12.0% 8.9% 6.8%Personal/consumerserviceactivities 0.4% 0.0% 0.0% 3.4% 0.2% 1.0%

Table2.11showsthedistributionofeducationlevelsacross TEA entrepreneurs in each of the ASEANcountries.Over80%ofearly-stageentrepreneurs intheregionhaveatleastasecondaryqualification,whilemore than half have a post-secondary qualification.Thailand and the Philippines have a notably highproportion of entrepreneurs with graduate levelqualifications. The high education levels amongASEAN-6 entrepreneurs may contribute to the factthat ASEAN-6 has the second highest regional percentage of people drawn to go into businessbecauseof theopportunity to improve their income(Table 2.7). Thailand, with the highest percentageof entrepreneurs with post-secondary as well asgraduate-level education, also has the highest rateof improvement-drivenopportunitymotivation in theregion.

2.6 Entrepreneurship impact

In studying the impact of entrepreneurs, GEM

recognisesthatwhileallentrepreneursareimportant,theyhavedifferingimpactsontheirsocieties.Keytoeconomicdevelopmentandgrowtharejobcreation,mixofindustriesandlevelofinnovation.ThissectionfocusesonthesefactorswithrespecttotheASEAN-6region.

2.6.1 Industry sector

Table2.12showsthedistributionofentrepreneurshipacross sectors for the six ASEAN countries. Themajorityofentrepreneursintheregionareengagedintheretailtrade,hotelsandrestaurantbusinesswiththePhilippineshaving83%ofbusinessengaged in thissector,thehighestintheregion.IndonesiaregisteredthehighestnumberengagedinmanufacturingwhileSingaporehas thehighestnumberofentrepreneursin more sophisticated sectors such as financialintermediation, communications, and professionalandgovernmentservices.

In the Philippines and Malaysia, women are significantly more likely to be involved in TEA. Singapore is a significant outlier in the region, with women accounting for only a third of early-stage entrepreneurial activity in the country.

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Table 2.13: Job expectations for early-stage entrepreneurial activity in ASEAN-6 countries, GEM 2014

Country No jobs 1-5 jobs 6-19 jobs 20+ jobsIndonesia 0.6 45.9 4.7 1.2Malaysia 27.0 61.7 11.4 0.0Philippines 39.2 49.0 5.6 1.8Singapore 9.7 32.1 23.2 19.4Thailand 47.2 33.0 7.8 1.1Vietnam 18.6 63.4 12.4 4.3Average(unweighted) 23.7 47.5 10.8 4.6 GEMaverage 15.4 41.0 14.7 9.0Average(factor-driven) 14.0 50.5 13.3 6.0Average(efficiency-driven) 12.5 40.3 14.7 8.0Average(innovation-driven) 19.1 38.4 15.1 11.1

The Economic Outlook for Southeast Asia, China and India, 2014 arguesthatfurthereconomicdevelopmentin the region is likely to depend increasingly onthe services sector. It notes that services areconcentrated mainly in lower-productivity segmentssuchastheretailtrade(ashighlightedinTable2.12).Barriers toentry into theconsumersector, in termsofbothskillsandcapital required, tendtobe lower.As a result, however, this is often an over-tradedsector populated by low profit margin businessesandthehighlevelofcompetitionfor limitedmarketscan threaten the sustainability of these businessesAnother factor tobear inmind is that theconsumerservicessectortendstobeparticularlyvulnerable inperiodsofeconomicslowdown.Furtherdevelopmentof the services sector - especially sophisticated,high-productivitymodernservicessuchasfinance,ICTandbusinessservices–isthusimportant,particularlyin enabling the ASEAN region to participate in global valuechains.Regulatorybarriersthatlimitentry,stiflecompetitionand inhibit investmenthavebeenmajorobstacles to thedevelopmentofservicessectors indeveloping Asian countries. Reducing and (wherepossible)removingregulatorybarriers isanessentialfocusareaforpolicymakers.

2.6.2 Job creation

A key focus in the development strategies of theSoutheast Asian countries is to facilitate growththatissustainableandinclusiveinordertogeneratewidespreademploymentandtoreducepoverty.The

potentialoftheSMEsectortocreatejobopportunitiesis thus a crucial factor. Table 2.13 indicates thepercentage of early-stage entrepreneurs reportingany current jobs, or expecting to create any jobswithinthenext5years.

Froma regionalperspective, theASEAN-6showsahigherthanaveragepercentageofentrepreneurswithnoemployees.AlthoughThailandhasthehighestTEArateintheregion,almosthalfoftheseentrepreneursrunaone-personbusiness.ThePhilippines,withthesecondhighestpercentageofentrepreneurswithnoemployees,hasthehighest levelofnecessity-drivenentrepreneurship in theregion.GiventhechronicallyhighlevelofunemploymentinthePhilippines,thishighlevelofself-employmentcanbeseenasapositive.

Thejobcreationpotentialfortheregioncanthusberegarded as moderate. Entrepreneurs in Singapore have the highest job-creation aspirations – morethan 40% expect to generate more than six jobs,and almost half of these project 20 jobs aremore.WithaTEArateof11%(higherthantheaverageforinnovation-driven countries) this could translate intosignificantjobcreationforSingapore.

Table 2.14 indicates the growth expectations, over the next five years, among theASEAN-6 entrepreneurs. Growth expectations represent a future assessment of theexpansionprospectsforabusiness,aswellasanentrepreneur’sambitionstogrowtheenterprise.

ThejobgrowthaspirationsfortheASEAN-6regionarenotencouraging.Morethanhalftheearly-stageentrepreneursexpecttogeneratenojobsoverthenextfiveyears,wellabovetheGEMaverage.TheeconomicimpactofThailand’spositiverankingintermsofTEAandestablishedbusinessrateisweakenedbyover70%ofitsentrepreneurshavingnoemploymentexpectations.

Inmosteconomies,onlyasmallpercentageofhighgrowthentrepreneursgeneratethebulkofnewjobsassociatedwiththeentryofnewfirmsintotheeconomy.Highgrowthexpectation(HEA)entrepreneursarethosewhoexpectthattheirbusinesseswillemployat least20people infiveyears’ time.TheASEAN-6regionhasadisappointingly lowpercentageofHEAentrepreneurswith themajorityof thecountries reportingaround1% in this category. Only Singapore shows vigorous high-growth expectations of16.5%-morethandoubletheGEMaverageandsubstantiallyhigherthantheaveragefor innovation-driveneconomies.Aconcern,however, isSingapore’s lowestablishedbusinessrate,whichneedstobeaddressediftheseeconomicbenefitsaretoberealised.

InterventionsthatencourageandstimulatebusinessesintheSMEsectortogrowareessentialiftheyaretocontributemeaningfullytosocio-economicdevelopmentinASEAN.Itisimportanttoidentifythoseentrepreneurswithrealistichigh-growthaspirations,andinstitutepoliciesaimedspecificallyatsupportingtheminordertooptimisetheirimpacton economic growth and job creation.

Table 2.14: Job growth expectations over next five years in ASEAN-6 countries, GEM 2014

Country No jobs 1-5 jobs 6-19 jobs 20+ jobsIndonesia 65.6 30.0 3.8 0.6Malaysia 41.9 55.6 2.5 0.0Philippines 56.1 37.9 5.1 0.9Singapore 38.1 26.1 19.3 16.5Thailand 72.1 21.2 5.7 1.0Vietnam 50.0 42.5 5.9 1.6Average(unweighted) 54.0 35.6 7.0 3.4 GEMaverage 44.4 35.9 12.4 7.2Average(factor-driven) 39.4 45.5 10.6 4.6Average(efficiency-driven) 45.5 35.3 12.8 6.4Average(innovation-driven) 45.1 33.2 12.7 9.0

Almost half the entrepreneurs in the ASEAN-6 region expect to generate between 1 – 5 jobs – however, only 4.6% expect to create more than 20 jobs (half the GEM average).

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2.6.3 Innovation

Innovation and entrepreneurship are closely connected concepts. It is arguedthat entrepreneurs disrupt market equilibrium by introducing new product-marketcombinationsintoamarket,teachingcustomerstowantnewthingsanddrivingoutlessproductivefirmsastheir innovationsadvancetheproduction frontier. Innovationgoesbeyondjustcreatingnovelproductsandservices.Tocommercialisetheir innovations,entrepreneursneedto identifynewmarketnichesanddevelopcreativewaystooffer,deliver and promote their products. All of this requires an awareness of competitiveofferings,andtheabilitytoincorporatethisknowledgeintodistinctproductsandservices.Innovationcapabilitiesarethusimportanttoeconomies’abilitytobecomecompetitive,particularlyinhigher-productivitysectors.

GEMassessesinnovationinentrepreneurialbusinessesbylookingattwomainvariableswith respect to theentrepreneur’sproductsor services: thedegreeofnewness theyrepresenttocustomers,andtheextenttowhichcompetitorsarenotofferingthesameproductsorservices.

Table2.15showsamoderatelevelofinnovationintheASEAN-6region.Justoverhalftheentrepreneursintheregionbelievethattheirproducts/servicesarenewtononeoftheircustomers.Malaysiaistheleastinnovativeinthisrespect(70%).ThePhilippinesisthemostinnovative,with61%ofproducts/servicesnew to some or all of the customers. The Philippines has beenmaking especially strong efforts todevelopitsinnovationcapabilities,offeringfiscalandotherincentivesforresearchanddevelopment,andcreatingscienceandtechnologyparkstoattractandstrengthenlinkagesamongforeignanddomesticknowledge-intensivefirms.

Table 2.16 shows that about 60% of businesses in the ASEAN-6 region believe that there is highcompetitionfortheirproducts/services.Thisimposessignificantchallengesfortheseentrepreneursinprovidingthecompetitiveadvantagetheyneedtogeneratehealthyprofitsandviablebusinessesoverthelongerterm.Asdiscussedunderindustrysector,mostoftheASEANeconomiesneedtodiversifytheirofferingswithinthebroaderservicessector,inordertoimprovetheircompetitivenessandproductivity.

Table 2.15: New products/ services offered to customers in ASEAN-6 countries, GEM 2014

Table 2.16: Proportion of competitors in ASEAN-6 countries, GEM 2014

Indonesia Malaysia Philippines Singapore Thailand VietnamNone 52.8 70.0 39.0 51.2 50.4 63.1Some 21.0 24.9 29.5 31.8 32.3 31.0All 26.2 5.1 31.5 17.0 17.3 5.9% within TEA: Product new to none/some/all customers

Indonesia Malaysia Philippines Singapore Thailand VietnamNone 9.6 4.1 7.5 7.8 6.6 4.9Few 22.9 40.7 32.6 32.1 36.1 29.1Many 67.5 55.2 59.9 60.1 57.3 66.0%withinTEA:No/few/manybusinessesofferthesameproduct

2.7 Summary of entrepreneurship by country

Overall,entrepreneurshipisregardedpositivelyintheASEAN-6 region.Two-thirdsofpeople in the regionsee entrepreneurship as a good career choice and entrepreneursreceiveahighlevelofmediaattention.Although there is a fairly healthy pool of potentialentrepreneurs, the high regional score for fear offailure is of concern. For the majority of ASEAN-6countries,thereisasharpfalloffbetweenintentionaland active entrepreneurs. Although the nascententrepreneurshipratefortheregionisdisappointinglylow,thisisoffsetbyanewbusinessratewhichisthesecondhighestregionalaverageandanestablishedbusinessratewhich is thehighest regionalaverage.The high level of sustainability of start-ups in theASEAN-6, relative to other regions in the GEMsample, is encouraging. The ASEAN-6 has thesecondhighestregionalpercentageofpeopledrawntogo intobusinessbecauseof improvement-drivenopportunity,andapositive ratioofTEA tobusinessdiscontinuance. With the exception of Singapore,women are as likely or more likely to be involvedin early-stage entrepreneurial activity as are men.Over80%ofearly-stageentrepreneurs intheregionhave at least a secondary qualification, while morethan half have a post-secondary qualification. Themajorityof entrepreneurs in the regionareengagedintheretailtrade,hotelsandrestaurantbusiness.TheASEAN-6 shows a higher than average percentageofentrepreneurswithnoemployees.Althoughalmosthalftheentrepreneursexpecttogeneratebetween1–5jobs,only4.6%expecttocreatemorethan20jobs(half theGEM average). The job growth aspirationsfortheASEAN-6regionarenotencouraging-morethan half the early-stage entrepreneurs expect togeneratenojobsoverthenextfiveyears.About60%ofbusinessesintheregionbelievethatthereishighcompetitionfortheirproducts/services.Thisimposessignificant challenges for these entrepreneurs inproviding the competitive advantage they need togenerate healthy profits and viable businesses overthe longer term.

Following are some summary insights intoentrepreneurshipineachofthesixcountries:

In Indonesia, highly positive attitudes towardsentrepreneurship translate into a healthy pool ofpotential and intentional entrepreneurs. The levelof early-stageactivity,however, is less thanhalf thenumber with entrepreneurial intentions. Start-ups in Indonesia show good sustainability with fairly high

numbers of new firms and established businesses.Entrepreneursinthecountryshowasurprisinglylowrate of improvement-driven opportunity motivationforanefficiency-driveneconomy(thesecondlowestin the region). Indonesia is fairly diverse in termsofparticipation in industry sectors, with a significantpercentageofentrepreneursinmanufacturingaswellasretail,andsomeactivityintheprofessionalservicessector. Almost half the early-stage entrepreneursemploy1–5people.

Malaysia has the smallest base of potentialentrepreneursintheregion.Malaysiansgenerallyhavealowlevelofconfidenceintheirownentrepreneurialabilities, and have a negative perception ofentrepreneurship as a career choice. Malaysia’slevel of entrepreneurial intention is half the averagefor efficiency-driven economies, and the countryreportsthelowestearly-stageentrepreneurialactivityin the ASEAN-6 region. Malaysian businesses arecomparatively less innovative with 70% believingthattheirproducts/servicesarenewtononeoftheircustomers.Malaysianwomen are significantlymorelikely to be involved in entrepreneurial activity thantheir male counterparts. Most entrepreneurs areimprovementdrivenasopposed tonecessitydrivendue in part to the low unemployment rate. Overallmost entrepreneurs are employers, with over 60%creatingjobsfor1-5people.

In the Philippines, highly positive societal attitudestowards entrepreneurship correspond with high levelsofbothperceivedopportunitiesandperceivedcapabilities, which translate into a healthy pool ofpotential and intentional entrepreneurs. The levelof early-stageactivity,however, is less thanhalf thenumber with entrepreneurial intentions. The Philippines hasthehighestpercentageofnecessityentrepreneursintheregion–giventhatitisafactor-driveneconomy,thisisnotsurprising.ThePhilippinesistheonlycountryin the ASEAN-6 with a high business discontinuance rate–at12.6, it isthreetimestheregionalaverage.Lack of profitability, or difficulties in accessingfinancing to sustain the business, are particularlyproblematicinthePhilippines,accountingfor65%ofbusiness discontinuance. The Philippines is notable forthehigh levelofentrepreneurialactivity inallagecategories,aswellasthesignificantproportionoftheadultpopulationinthe55–64agecategoryengagedin TEA (close to three times the GEM average).Women are significantly more likely to be involvedinTEA,compared tomen. Asignificantmajorityofbusinessesareintheretailsector(thehighestintheregion).Entrepreneurshipprimarily takes the formof

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self-employment,ratherthanjobcreationforothers.A significant proportion of entrepreneurs have noemployees, corresponding with the high rate ofnecessity-driven entrepreneurship. The Philippinesis the most innovative country in the region, with61%ofproducts/servicesnewtosomeorallofthecustomers. Singapore has a very small pool of potentialentrepreneurs–itsscoresforperceivedopportunitiesand capabilities are almost three times lower than the combinedaveragefortheotherfivecountries,andithas the lowest entrepreneurial intentions in the region. However, a positive trend is that entrepreneurialintentiontranslatesstronglyintoactualentrepreneurialactivity. Singapore shows a significantly higher TEAratethantheaverageforinnovation-driveneconomies,andhasoneofthehighestratesofimprovement-drivenopportunitymotivationintheASEAN-6region.Ontheotherhand,itsestablishedbusinessrateisthelowestintheregion.TheTEArateisalmostfourtimeshigherthantheestablishedbusinessrate,suggestingapoorlevel of new firm sustainability. In terms of genderparity,Singaporeisasignificantoutlier intheregion,withwomenaccountingforonlyathirdofearly-stageentrepreneurialactivityinthecountry.Singaporehasthehighestnumberofentrepreneursintheregioninmoresophisticatedindustrysectorssuchasfinancialintermediation, communications, and professionalandgovernmentservices.EntrepreneursinSingaporeare the highest job-creators in the region – morethan 40% expect to generate more than six jobs,and almost half of these project 20 jobs or more.Singaporeshowsvigoroushigh-growthexpectations-16.5%expect togenerate20+ jobsover thenextfiveyears.

In Thailand, positive societal attitudes and thehighest regional rate of perceived opportunities

translate strongly into actual entrepreneurial activity.Despite the political turmoil it experienced during2014, Thailand is the region’s highest performer -both TEA and established business rates are the highestintheregionbyasubstantialmargin.Thailandhasoneof thehighest ratesof improvement-drivenopportunitymotivationintheregion,andthehighestpercentageofentrepreneurswithpost-secondaryaswellasgraduate-leveleducation.LikethePhilippines,Thailandisnotableforthehighlevelofentrepreneurialactivityinallagecategories,aswellasthesignificantproportionoftheadultpopulationinthe55–64agecategory engaged in TEA (close to three times theGEMaverage).AlthoughThailandhasthehighestTEArateintheregion,almosthalfoftheseentrepreneursrun a one-person business. The economic impact of Thailand’s positive ranking in terms of TEA andestablished business rate is further weakened byover70%ofitsentrepreneurshavingnoemploymentexpectations. Vietnam’s level of entrepreneurial intention is verylow for a factor-driven economy – the exceptionallyhigh score for fear of failure (the highest in theASEAN-6 region, and significantly higher than boththeGEMaverage and the average for factor-driveneconomies) is probably a significant factor in thisrespect. Vietnam has one of the lowest nascententrepreneurship rates in the region; however, itsnew firm and established business rates are thesecond highest in the region, showing good longerterm sustainability. Entrepreneurship exhibits littleindustry diversity, with over 80% operating in theretail, hotel and restaurant sector. Although a thirdofentrepreneursarenecessity-driven, justoverhalfcite improvement-driven opportunity motivation –encouragingforafactor-driveneconomy.AsignificantmajorityofVietnameseentrepreneursareemployers-over60%employ1-5people,and12%employmore

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CHAPTER3:FOCUSAREA–ASEANWOMEN’SINVOLVEMENTINENTREPRENEURSHIP

A key trend in the development strategies of theSoutheast Asian countries is a focus on inclusiveand sustainable growth – the creation of enablingenvironments that foster innovation, facilitate moreproductive economies and, critically, open up newandbetter jobopportunities for all segmentsof thepopulation. Worldwide, women’s role as drivers ofeconomic growth is increasingly recognised. Inaddition, countries that invest in greater economicequality between men and women see importantresults beyond economic benefits. Empoweringwomen leads to better-educated and healthier families, stronger societies and decreased nationalpoverty.

Although female entrepreneurship is an increasingtrend around the world, the rate of participation inentrepreneurship still varies considerably betweencountries and geographical regions. According to the OECD(2004),womentendtohavelowerparticipationrates in entrepreneurship as they face more socialandculturalconstraintsthanmen.Womengenerallystart or manage businesses in industries that are

“oftenperceivedasbeinglessimportanttoeconomicdevelopment and growth than high-technology andmanufacturing” (OECD, 2004, p. 5). Many studiesmaintain that women face greater difficulties inbecoming entrepreneurial. These obstacles include: higherlevelsofdomesticresponsibility;lowerlevelsofeducation (particularly in developing countries); lackof female rolemodels in thebusinesssector; fewerbusiness-orientated networks in their communities;lack of capital and assets; lower status in societyand a culturally-induced lack of assertiveness andconfidence in their ability to succeed in business.Thesefactorsmaypreventwomenfromperceivingaswell as acting on entrepreneurial opportunities.

The SME sector is often viewed as the core ofeconomicdevelopmentintheASEANregion.GEM’smeasurement of individual participation acrossmultiplephasesoftheentrepreneurialprocessmakesitpossibletogetaclearerideaofnotonlytheextentto which women are participating in entrepreneurial activity,butalsothenatureandimpactofthisactivity.This chapter will provide an overview of genderdifferences in entrepreneurial attitudes, activity andimpactinthesixASEANcountrieswhichparticipatedin the GEM survey in 2013 and 2014, namelyIndonesia,Malaysia,Philippines,Singapore,ThailandandVietnam(ASEAN-6).Datafromthesetwoyearsisaggregatedtoprovideinsightsintogenderdifferencesin entrepreneurship in the region.

3.1 Entrepreneurial attitudes

Entrepreneurialactivitydoesnottakeplaceinavacuum–theprevalententrepreneurialattitudesandperceptionsplay an important part in creating an entrepreneurialculture in an economy. GEM assesses broader socialattitudes towardsentrepreneurship,whichcan indicatethe extent towhichpeople arewilling toparticipate inentrepreneurialactivity,andthelevelofsocialsupportfortheirefforts.Althoughattitudesandperceptionswillhaveanimpactonallphasesoftheentrepreneurialpipeline,the influence on the pool of potential and intentionalentrepreneursislikelytobemostsignificant.

GEM research has confirmed the importance ofindividuals’ perceptions of their entrepreneurial ability,their recognition of start-up opportunities, how

risk-aversetheyare,andtheextenttowhichtheirsocialnetworks includeentrepreneursasbeing instrumentalinwhetherornottheybecomeinvolvedinstartingnewbusinesses.

Figure3.1showsthatingeneral,menintheASEAN-6countries score have more favourable perceptionsrelative to the entrepreneurial indicators listed above,compared to women in the region. Men knowmore start-up entrepreneurs; perceive more goodopportunitiesintheareainwhichtheylive;havemoreconfidence in theirownability torunabusiness;andtendtohavelessfearoffailure(i.e.arelessrisk-averse).Inlinewiththesehigherlevelsofpositiveperceptions,menalsoreporthigherratesofentrepreneurialintention.

Figure 3.1: Gender differences in entrepreneurial attitudes, ASEAN-6 region

Research suggests that Southeast Asian women are becoming increasingly active as SME owners and entrepreneurs.

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Onanindividualcountrylevel,thesixASEANeconomiesshowsignificantvariationinbothmaleandfemaleentrepreneurialattitudes,asdiscussedbelow.

3.1.1 Know start-up entrepreneur

TheaveragefortheASEAN-6regionforthevariable“knowastart-upentrepreneur”islessthan50%(45%formenand40%forwomen).Figure3.2showsthebreakdownforthisindicatorbyindividualcountry,forboth2013and2014.

Figure 3.2: Know start-up entrepreneur rate, by gender, for ASEAN-6 countries

Indonesiahasthehighestscoreintheregion,byasignificantmargin,forbothmenandwomen.Vietnamalsoscoresabovetheregionalaverageforbothgenders.Singaporehassignificantlylowerratesofknowingstart-upentrepreneursforbothmenandwomen–lessthanhalftheregionalaverageinbothcases. InthemajorityoftheASEANcountries,fewerwomenknowastart-upentrepreneur,comparedtomen.ThemostsignificantdiscrepanciesarefoundinThailand(withadifferenceofabout10%forboth2013and2014)andMalaysia.InVietnamandthePhilippines,in2014,theratesformenandwomenareessentiallythesame.

3.1.2 Opportunity perception

GEM research suggests that individualswho see goodbusinessopportunitiesintheirareaaresignificantlymorelikely to become involved in entrepreneurial activity.Figure3.3showstheratesofopportunityperceptionfortheASEAN-6 countries.Although the rate of perceivedopportunitiesis,ingeneral,higherformenthanforwomen,the difference between the genders in the ASEAN-6regionforperceivedopportunitiesisrelativelylow(around3%). Again, when the rates for individual countries areconsidered,amorediversepictureemerges.Philippineshasthehighestrateintheregionforfemaleopportunity

perception in both 2013 and 2014, and is also theonly country in the region where women report higherrates than men. In 2013, the perceived opportunitiesfor women in the Philippines aremuch higher than formen, while in 2014 the rate is still higher although notas significant. In 2014, Thaimen reported the highestrate for opportunity perception in the region, resultingin a significantgenderdifferential of 9%.Singaporeans,aswiththepreviousindicator(knowinganentrepreneur)have ratesofopportunityperception, forbothmenandwomen,lessthanhalftheregionalaverage.

Figure 3.3: Perceived opportunities rate, by gender, for ASEAN-6 countries

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3.1.3 Perceived capabilities

Whileopportunityperceptionsdemonstratepeople’sviewsoftheenvironmentaroundthem, beliefs about capabilities aremore reflective of self-perceptions. They indicateindividuals’ confidence that they have the knowledge, skills and experience requiredtostartanewbusiness.Figure3.1 indicated that in theASEAN-6 region,halfof themensurveyedbelievedthat theywerecapableofengaging inentrepreneurialactivity,comparedto44%ofwomenintheregion.

Figure 3.4: Perceived capabilities rate, by gender, for ASEAN-6 countries

Figure 3.5: Fear of failure rate, by gender, in ASEAN-6 countries

The GEM 2010 Women’s Report (Kelley et al., 2011)found thatwomen in factor-driveneconomiesaremorelikely to perceive opportunities in their area and haveconfidence in their capabilities for entrepreneurship,compared to efficiency-driven and innovation-drivencountries. The ASEAN findings (Figure 3.4) indicate asimilar trend.Women in the Philippines (a factor-driveneconomy)havethehighestperceivedcapabilities(aswellasperceivedopportunities)whilewomeninMalaysia(anefficiency-drivenintransitiontoinnovation-drivencountry)and Singapore (the only innovation-driven economy intheASEANregion)havethelowestperceivedcapabilitiesrates among women.

In thePhilippines, therenogenderdifference in rateofperceived capabilities. Interestingly, in Vietnam there isa significant difference in female perceived capabilities

comparedtothemalecounterpartsin2013;however,therateisalmostthesamein2014.Similartothetrendofperceivedopportunities,theperceivedcapabilitiesrateforThaiwomen in 2014 ismuch lower than for theirmalecounterparts(13%difference).

3.1.4 Fear of failure

Fear of failure rate measures the percentage of thoseperceiving entrepreneurial opportunities who indicatethat fear of failurewould prevent them from setting upa business. If fear of failure is low, it is expected thatindividualswill be less inhibited by the risks inherent indoing business. On average, women in the ASEAN-6regionreportahigherfearoffailure(46%)whencomparedtomenintheregion(41%).

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The same pattern is seen in individual countries withtheexceptionof thePhilippines,whichagainshowsnosignificant difference inmale and femaleperceptions. ItisworthnotingthatthePhilippinesisthehighestrankedASEANcountry intheWorldEconomicForum’sGenderGapReport,whichassesses the relativegapsbetweenmen and women across four key indicators (health,education, economic participation andopportunity, andpolitics). In 2014, the Philippines was ranked 9th outof 142 economies. The next highest ASEAN country –Singapore–wasranked59th.OfparticularinterestisthatthePhilippineshascompletelyclosedthegendergapinterms of educational attainment, whichmay contributetothehigherperceptionsofself-efficacyamongwomeninthePhilippinessurveyedintheGEMstudy.Figure3.5alsoindicatesthatbothmenandwomeninVietnamhavethehighest fearof failure rates in the region.Malaysianwomen (despite showing the second lowest perceivedcapabilitiesandperceivedopportunities)showthelowestfearoffailurerate(43%).

3.2 Entrepreneurial intentions

GEMdefinesentrepreneurialintentionasthepercentageof theadult non-entrepreneurpopulationwho intend tostart abusinesswithin thenext three years. This stageis important in theentrepreneurial process, as a strongassociation exists between entrepreneurial intentionand actual entrepreneurial behaviour. On average,the entrepreneurial intention rate for men in ASEAN-6countriesis27.9%andforwomen25.3%.

As predicted, the majority of women in the ASEAN-6countries have lower intentions than men to start abusiness in the future (Figure 3.6). This corresponds tothelowerratesofopportunityandcapabilityperceptions,as well as the high rate of fear of failure, reported bywomenintheregion.WomeninthePhilippines,aswouldbe expected, have the highest rate of entrepreneurialintentionalmostdoubletheregionalaverage.Inaddition,their rate of entrepreneurial intention is only 1% lowerthanformeninthePhilippines.WomeninMalaysiahavethe lowest entrepreneurial intentions (12%), followedbySingaporeanwomen(15%).

Figure 3.6: Entrepreneurial intentions, by gender, for ASEAN-6 countries

Entrepreneurial intentions are also measured based on individuals’perceptionsaboutsociety’sattitudetowardsentrepreneurs. Individuals are asked whether in theircountry, successful entrepreneurs receive high status.Media attention for entrepreneurship is also measured- individuals who often see stories in the publicmediaaboutsuccessfulnewbusinessesarelikelytohavemorefavourable perceptions of entrepreneurship as a viablecareer option. Personal desirability perceptions aremeasuredasapercentageofthepopulationof18-64yearolds who consider starting a new business a desirable careerchoice.Figure3.7indicatesnogenderdifferencein these three indicators in the ASEAN-6 region.

3.3 Entrepreneurial activity

3.3.1 The entrepreneurial pipeline

GEM sees entrepreneurial activity as a continuousprocess rather than as individual events. This processcanbeviewedasapipeline,wherepeopleparticipatingin each phase are the source of those potentiallyadvancing to the next phase (see Figure 2.1). Thephases comprising the entrepreneurial pipeline are: entrepreneurial intentions, nascent and new businessactivity,progressionintoestablishedbusinessownership,andbusinessdiscontinuance.Evenwhenindividualshavefavourable perceptions of entrepreneurship and exhibitentrepreneurial intentions, it isbynomeanscertainthatthis will be translated into actually starting businesses.Figure 3.8 highlights the relationship between the phases oftheentrepreneurialpipelineformenandwomenintheASEAN-6 region.

Figure 3.7: Entrepreneurial desirability perception, by gender, ASEAN-6 countries

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Figure 3.8: Entrepreneurial pipeline, by gender, for ASEAN-6 region

In theASEAN-6region,peoplehave fairlypositiveratesforintentiontostartupabusinessinthenextthreeyears.However,thereisasharpfalloffbetweenintentionalandnascent entrepreneurs. Given that the latter is the firststageof actual entrepreneurial activity, this is cause forconsiderableconcern.Theratesforwomeninallstagesofentrepreneurshiparelowerthanthemalerates,althoughthe rates are not significantly different. Encouragingly,fornewentrepreneurstherateformalesandfemales isequal.

The leakage (or the decrease of the percentage ofentrepreneurs) between phases of the entrepreneurialpipeline issimilar forwomenandmen.This impliesthatthepersistenceaswellasthechallengesfacingASEANwomen and men with regards to entrepreneurship is also comparable.

Table 3.1: Regional comparison of TEA activity by gender, GEM 2014

Table3.9summarisestheinvolvementinentrepreneurialactivity, by gender, over several phases of theentrepreneurial process for the sixASEANcountries. InIndonesia, male and female participation is essentiallythe same in all three phases of entrepreneuriall activity,namely nascent entrepreneurship, new firm ownershipand established business ownership.

Malaysia has consistently low rates at all stages ofentrepreneurship, compared to the other ASEANcountries. Malaysia is an efficiency-driven in transitionto innovation-driven country, which suggests that theMalaysian people may prefer non-entrepreneurial jobs.Given that it has the lowest entrepreneurial intentionsrate, it is not surprising that Malaysia has the lowestnascententrepreneurshiprateintheregion.TheratesforMalaysianwomenintheentrepreneurialpipelinearealsoconsistentlylower,comparedtotheirmalecounterparts.Forestablishedentrepreneurs,thepercentageofwomenis significantly lower than formen (5% for women and10% for men). Singapore follows a similar pattern toMalaysia. Nascent entrepreneurship rates are average,butnewandestablishedfirmratesarethelowestintheregion.Aparticularconcern isthat inall threestagesofentrepreneurial activity, female participation is only halfthatofmaleparticipation.

In line with its high level of potential and intentionalentrepreneurship, the Philippines has the highestnascent entrepreneurship rate in the region for bothmen and women. However, for new and established

entrepreneurs, the rates of entrepreneurial activitiesare much lower – the established business rate is thesecond lowest in the region.bya significantmargin.Anencouragingfinding is that femaleparticipation inactiveentrepreneurship either equals (nascent businesses) orexceeds (new and established firm ownerships) that oftheirmalecounterparts.Thefactthatwomen’sstart-upssurvivetheliabilityofnewnessandcanbesustainedintotheestablishedbusinessphaseisapositivetrend.

ThepercentageofThaiwomeninvolvedinentrepreneurshipismostlylowerthanmen,exceptfornewentrepreneurswherethefemalerateisslightlyhigherthanthatformales.Forallotherstages,thefemalepercentageissignificantlylower,withadifferenceof2–7%.However, theoverallpercentage of people (of both genders) involved inentrepreneurialactivities is relativelyhigh ineverystage.Thailandhas thehighest established rate in the region,forbothmenandwomen,byasignificantmargin.Therearetwiceasmanyfemale-ownedestablishedbusinessescompared to new firms – amost encouraging trendofbusinesssustainability.

Women in Vietnam show an interesting trend in entrepreneurialactivities.Althoughthereisanimbalanceinfavourofmenintermsofrateofperceivedopportunitiesand entrepreneurial intentions, the gap closes rapidlywhen theyactuallystartabusiness.Eventually, the rateof established entrepreneurs for Vietnamese women ishigher than formen. It seems that Vietnamesewomenare more persistent in business compared to the men.

Region* Male TEA (as % of adult population) Female TEA (as % of adult population)ASEAN-6 15 15Africa 28 25Asia&Oceania 14 11LatinAmerica&Caribbean 19 16European Union 10 5Non-European Union 7 5North America 16 11GEMaverage 16 12*Regional averages are unweighted

Table 3.1 indicates that when compared to other geographical regions, the ASEAN-6 region is the best performer in terms of gender equity with respect to male and female participation in early-stage entrepreneurial activity (TEA), as well as significantly better than the GEM average.

M: 28% F: 25%

M: 6% F: 5%

M: 10% F: 10%

M: 15% F: 13%

58 59

Figure 3.9: Participation in entrepreneurial activity, by gender, for ASEAN-6 countries

3.3.2 Reason for starting a business

GEMasksallentrepreneursabouttheirmotivesforstartingabusiness.Theentrepreneurswith necessity motives opt for entrepreneurship mostly because they have no otheroptions for work, while entrepreneurs with opportunity motives prefer to pursue anopportunity. Ingeneral,wecanconsider thosewithnecessitymotivesasbeingpushedintoentrepreneurship,ratherthanactivelytakingadvantageofabusinessopportunityorhavingajobbutseekingabetteropportunity.Figure3.10summarisesthemotivesoftheearly-stageentrepreneursintheASEAN-6countries.

Figure 3.10: Motive for starting business, by gender, for ASEAN-6 countries

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TheASEAN-6regionasawholehasrelativelyhighlevelsofopportunity-motivatedentrepreneurialactivity.Overall,womenaremorelikelytobepushedintoentrepreneurshipout of necessity (24%) than are men (20%). At theindividualcountrylevel,SingaporeandMalaysia,withthelowest levels of necessity-motivated entrepreneurship,shownogenderdisparity intermsofmotiveforstartinga business. The Philippines, with the highest rate ofnecessity-motivated entrepreneurship for both genders,also shows the highest gender disparity. Early-stagewomen entrepreneurs in the Philippines are 1.5 times more likely to bemotivated by necessity than aremenintheregion.Philippines isafactor-drivencountrywiththehighestunemployment rate in theASEAN-6 region.High competition for low levels of job opportunities inthe formal sector, means that women, especially inpoorer communities, will be forced into necessity-en-trepreneurship because of lack of other options forsustainablelivelihoods.

3.3.3 Business discontinuance

IntheASEAN-6region,therateofdiscontinuingbusinessisrelatively low(lessthan3%),except inthePhilippines(Figure3.11).Whiletherateofbusinessdiscontinuanceisalmostequalbetweenthegendersinthemajorityofthecountries,morewomen in thePhilippinesgaveup theirbusiness(11%)comparedtomen(7%).

Figure 3.11: Rate of business discontinuance, by gender, for ASEAN-6 countries

Figure3.12summarisesthereasonsgivenbyentrepreneursfortheirbusinessclosure.The main reasons for business discontinuance are similar for both genders, namelylack of business profitability, difficulty in accessing finance and personal problems.Thehighestpercentageofmale-ownedbusinessclosuresarebecausethebusinessisnotprofitable,while thehighestpercentageofclosures for female-ownedbusinessesisforpersonalreasons.Asmentionedearlier,womenoftenfacegreaterchallengesasentrepreneurs.Gender stereotypingplaceshigher levelsofdomestic responsibilityonwomen’s shoulders (household chores as well as family responsibilities), while lowerstatusinsocietyandculturalexpectationsthatwomenshouldnotdisplaycharactertraitssuchasassertivenesscoulderodetheirconfidenceintheirabilitytosucceedinbusiness.

Figure 3.12: Reason for business discontinuance, by gender, for ASEAN-6 region

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3.3.4 TEA and education

Whensomestudiessuggestedthathighlyeducatedwomentendtochoosecareeroptionsotherthanself-employmentandentrepreneurship,thistrenddoesnotparticularlyapplytowomenintheASEAN-6region.Figure3.13belowshows thepercentageof females ineachcountry’spopulationand in totalearly-stageentrepreneurship,categorisedaccordingtotheireducationlevel.

For all the ASEAN countries, it can be seen that the proportion of women involved in early-stageentrepreneurshipwhohavecompletedthefirststageoftertiaryeducationishigherthanwomeninthepopulation.ThepercentageofMalaysianwomenwithtertiaryeducationinvolvedinTEAissignificantlyhigher,comparedtothegeneralfemalepopulationinMalaysia.InMalaysiaandThailand,fewerwomenwhohavecompletedpostsecondarynon-tertiaryeducationbecomeinvolvedinentrepreneurship.

InVietnam,thepercentageofwomenwithaloweducationlevel(basiceducation:firststageandsecondstage)involvedinentrepreneurshipislowerthanthepopulation.AsimilartrendappliesinthePhilippineswhere the highest percentageof TEA involvement is forwomenwhohave completed upper secondeducation.

Figure 3.13: Female TEA according to education level, for ASEAN-6 countries

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InSingapore,similartoVietnamandthePhilippines,thepercentageofwomenwithloweducationlevels(includingthose who have only completed lower secondaryeducation) involved in entrepreneurship is lower thanthe population. In Indonesia, the trend is different.Somewomenwitha loweducation level (secondstagebasic education/lower secondary education) showhigher involvement inentrepreneurship than thegeneralpopulation,butthesameholdstrueforthosewhohavecompletedfirststagetertiaryeducation.

3.4 Entrepreneurial aspirations

3.4.1 Firm growth and job creation

AkeyfocusinthedevelopmentstrategiesoftheSoutheastAsiancountries is to facilitategrowththat issustainableandinclusiveinordertogeneratewidespreademploymentandtoreducepoverty.AsmanyoftheASEANcountriesareconsideredtobeemergingeconomies,thepotentialof theSMEsector tocreate jobopportunities is thusacrucialfactorineconomicgrowth.TheGEMsurveyasksearly-stage entrepreneurs how many employees (otherthantheowners)theycurrentlyhaveandexpecttohavein the next five years. The difference between currentandexpectedemployeesindicatesgrowthexpectations.Entrepreneursareclassedashavinggrowthaspirationsiftheyexpecttoemployatleast5peopleinthenextfiveyears.

Traditionally,womenentrepreneurstendtocreatesmallerbusinesses than men. This trend indeed occurs in the ASEAN-6 countries as well.

Early-stageentrepreneursinSingaporehavethehighestgrowth aspirations, with 42% of women early-stageentrepreneurs expecting to have at least 5 employeesfive years from now. Filipino women have the lowestfirmgrowthaspirations,withonly6%expectingtohaveat least5employeesinthenextfiveyears. InVietnam,the growth aspiration level is significantly differentbetweenmenandwomen.Whilealmostonethirdofmaleearly-stageentrepreneursinVietnam(31%)areconfidentofhavingatleast5employeesinthenextfiveyears,only18% of female early-stage entrepreneurs aspire to thesameperformance.

The largest gap in the ASEAN-6 region, in terms ofgrowthaspirations,occursbetweentheinnovation-driveneconomy(Singapore)andtherestoftheregion.Singaporehas early-stage entrepreneurs that have the highestexpectation (more thandouble the regional average forboth genders) of increasing their firm size. However,there isnodifference ingrowthaspirationsbetweentheefficiency-drivenandfactor-drivencountries,astheyhavesimilarrates.Thissuggeststhateconomicdevelopmentlevel alone does not explain the difference betweengendersinfirmgrowthaspirations.

Figure 3.14: Firm growth aspirations, by gender, for ASEAN-6 countries

3.4.2 Internationalisation

Another criterion for entrepreneurial aspiration isinternationalisation. For many entrepreneurs, ‘goinginternatio nal’ is an approach to obtain largermarkets.The GEM study uses two indicators to measure thepercentage of entrepreneurswho expect to havemoreinternationalmarkets:

• Weakinternationalorientation:thosewhoaimtohavemorethan1percentof theircustomerscomingfromoutsidetheirowncountry

• Stronginternationalorientation:thosewhoaimtohavemorethan25percentoftheircustomerscomingfromoverseas.

Figure 3.14 shows that in all the ASEAN-6 countries, women tend to have lower growth aspirations than men do. Fewer women early-stage entrepreneurs expect to have 5 or more employees in the next five years, compared to men.

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Figure 3.15: TEA international orientation, by gender, for ASEAN-6 countries

Figure 3.15 shows the international orientation fornascent and new businesses, for both genders, for theASEAN-6 countries. With the exception of Singapore,early-stage ASEAN-6 entrepreneurs have lower levels ofinternationalization.Indonesiashowsaverylowinternationalorientation, as it has very low rates for both weak andstrong internationalorientation (less than10%).The ratesareevenlowerforwomen,asonly5%offemaleearly-stageentrepreneursindicatethatmorethan1%oftheircustomersare fromoverseaswhileonly3% indicate thatmore than25% of their customers are from overseas. The internalmarketof Indonesia is very large; thiscouldbea reasonwhyIndonesianearly-stageentrepreneurshesitatetotargetoverseas markets with their products. Thai early-stageentrepreneurs also indicate low expectations to sell theirproductsandservicesoverseas.

Malaysia, thePhilippinesandVietnamhaverelativelyhighrates for the weak international orientation, especiallyfor male early-stage entrepreneurs. However, exceptfor Vietnam, women entrepreneurs tend to have lessinternationalorientationthanmen.Only20%ofMalaysianandFilipinawomenearly-stageentrepreneurshaveatleast1%ofoverseascustomers.ForVietnam,therate is28%forwomenand29% formen. For these threecountries,thepercentageofentrepreneursthathaveatleasta25%overseasmarketisalsolow.InthePhilippines,morefemaleshaveoverseasmarketsthantheirmalecounterpartswhenstronginternationalorientationisused(9%forwomenandonly3%formen).

Singaporehasaveryhighrateforinternationalisation,whichapplies to both men and women entrepreneurs. Although the rate ofweak international orientation forwomen andmen is relatively close (79% for women versus 83% formen), the gender discrepancy becomes significantwhenstrong international orientation is considered (28% forwomenversus42%formen).

3.5 Conclusions

It is clear that women in the ASEAN-6 region play animportant role in the SME sector, contributing actively toentrepreneurshipintheregion.DatafromtheGEMsurveyshowsthatwhencomparedtoothergeographicalregions,the ASEAN-6 region is the best performer in terms ofgenderequitywithrespecttomaleandfemaleparticipationin early-stage entrepreneurial activity (TEA), as well assignificantlybetterthantheGEMaverage.Theleakage(or

thedecreaseofthepercentageofentrepreneurs)betweenphases of the entrepreneurial pipeline is also similar forwomen and men. However, from an individual countryperspective,itisclearthatcertainfactorsmakeiteasierforwomenentrepreneurstoflourishinsomeASEANcountrieswhile they struggle in others. Women in the Philippines,Thailand and Indonesia, for example, are as likely to beinvolvedinallphasesofentrepreneurialactivityasaretheirmalecounterparts.InSingapore,ontheotherhand,femaleparticipationinallthreestagesofentrepreneurialactivityisonlyhalfthatofmaleparticipation.

In all the ASEAN-6 countries, women entrepreneurstendtokeeptheirbusinesssmallandhave lowergrowthaspirations than men do. Significantly fewer womenearly-stage entrepreneurs expect to have 5 or moreemployeesinthenextfiveyears,comparedtomen(16%forwomen,comparedto24%formen).Womenalsohavelowinternationalorientation,preferringtoremainwithinlocalmarkets.Entrepreneurshipisseenasapotentialcontributorto job creation and economic growth, and womenentrepreneurs need more support to enable them to grow theirenterpriseseffectively.

WomenindifferentASEANcountrieswillclearlyfacedifferentchallengeswhenenteringandoperatingintheSMEsector.However,thesurveydatasuggestscommonareaswhichcould be addressed across the region.

• Access tonetworks:significantly fewerwomen in theASEAN-6regionknowanentrepreneur,comparedtomenintheregion.Inthisway,womenaredisadvantagedfromthestart,having fewer rolemodels (whichcouldaffecttheir willingness to engage in entrepreneurial activity)as well as mentorship opportunities and professionalconnections,whichcouldaffectthesustainabilityoftheirbusinesses in the long run.

• Access to finance: this is one of the main reasonsfor business discontinuance among women in theregion.Womenoftenresort toobtaining loansthroughpersonalandfamilyconnectionsratherthanattemptingto approach a commercial bank. They alsooften lackknowledge of how to develop and present a robustbusiness plan. Their lower confidence in their ownabilities,coupledwithhigherfearoffailurerates,maywellcontribute to the problem. Funding agencies and options geared specifically towards women-owned SMEs areneeded in the region to support women entrepreneurs.

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CHAPTER 4: AGEMASSESSMENTOFTHEASEANNATIONAL ENTREPRENEURIALENVIRONMENTS

The GEM model (discussed in Chapter 1) explicitlyacknowledgesthatentrepreneurialactivitywithinacountryis influenced by the specifics of the national political,social, cultural and economic environment. Three setsofframeworkconditionsareexpectedtoconcernpolicymakersatdifferentstagesofeconomicdevelopment.

The basic requirements, namely a country’smacro-economic stability, institutions, infrastructure,health and primary education, are the underlyingfundamental conditions required for a well-functioningbusinessenvironment.Theserequirementsareusuallythefocus of development efforts in factor-driven countries.As these factorsbecome relativelyestablished,and theeconomymovestowardtheefficiencystage,morefundinganddevelopment efforts should focus on the efficiencyenhancers. These factors include higher education andtraining, goods and labour market efficiency, financialmarket sophistication, technological readiness andmarketsize. Inmoredevelopedeconomies,factorsthatareaimedat stimulatingandsupporting innovationandentrepreneurialactivitybecomeincreasinglyimportant.Internationalorganisationssuchas theWorldBank, theWorldEconomicForum,DoingBusinessReport,HeritageFoundationand theUnitedNationsprovide indicesanddata on factors and conditions constituting the basicrequirements and efficiency enhancers. To assess the

TheannualanalysisoftheglobalcompetitivenesslandscapebytheWorldEconomicForum,whichincludeddataon144countries,revealsstrongcontrastsbetweenthecountriesintheASEANregion.ThejuxtapositionofthemainindicatorsfortheASEANmembercountriesshowsthelargedifferencesintheregion(Table4.2).

innovationandentrepreneurshipfactors,GEMdevelopedtheNationalExpertSurvey(NES).

4.1 An overview of the business environment in the ASEAN region

The Global Competitiveness Report 2013-2014 describes the ASEAN’s competitiveness landscape as‘amixedpicturewithencouraging trends’. It notes thatsignificantdevelopmentgapsexistwithintheASEAN–nootherregional integrationinitiativehasdeeperdisparitiesamongparticipatingmembers(Schwabetal,2013).Theten ASEAN member countries represent all stages ofeconomic development: from factor-driven (Cambodia,LaoPDR,Myanmar, Vietnam), through efficiency-driven(Indonesia, Thailand) to innovation-driven (Singapore),plustheycoverthetwotransitionphasesbetweenfactor-and efficiency-driven (Brunei, Philippines) and betweenefficiency-andinnovation-driven(Malaysia). ASEAN’spopulationnumbers625.9millionpeoplewithacombinedGDPof2,406.9billionUS$,whichisa4.4%shareoftheworld’stotalGDP(PPP).TheaverageGDPpercapitais12,426.5US$withaspreadfrom869US$in Myanmar to the 63 times higher GDP per capita inSingaporeof54,776US$(Table4.1).

Table 4.1: Key indicators of the economic profile in ASEAN, 2014*

Population (millions) GDP (US$ billions) GDP per capita (US$) GDP (PPP) as share (%) of world totalBruneiDarussalam* 0.4 16.6 41,703 0.03Cambodia 15.4 15.7 1,016 0.05Indonesia 248.0 870.3 3,510 1.49LaoPDR 6.8 10.0 1,477 0.02Malaysia 29.6 312.4 10,548 0.60Myanmar 64.9 56.4 869 0.13Philippines 97.5 272.0 2,790 0.53Singapore 5.4 295.7 54,776 0.40Thailand 68.2 387.2 5,674 0.77Vietnam 89.7 170.6 1,902 0.41ASEAN 625.9 2,406.9 12,426.5 4.4* Brunei Darussalam data in this table are from 2013Source: Global Competitiveness Report 2014-2015 (World Economic Forum, 2014)

* Brunei Darussalam data in this table are retrieved from the 2013-2014 Global Competitiveness Report (148 countries), therefore direct comparisons to Brunei Darussalam are inexact.

Source: Global Competitiveness Report 2014-2015 (World Economic Forum, 2014)

Table 4.2: Global Competitiveness Index: rankings out of 144 countries, 2014-2015*

I. Basic requirements 18 103 46 98 23 132 66 1 40 79Institutions 25 119 53 63 20 136 67 3 84 92Infrastructure 58 107 56 94 25 137 91 2 48 81Macroeconomic environment 1 80 34 124 44 116 26 15 19 75Health and Primary education 23 91 74 90 33 117 92 3 66 61 II. Efficiency enhancers 65 100 46 107 24 134 58 2 39 74Higher education and training 55 123 61 110 46 135 64 2 59 96Goods market efficiency 42 90 48 59 7 130 70 1 30 78Labor market efficiency 10 29 110 34 19 72 91 2 66 49Financial market development 56 84 42 101 4 139 49 2 34 90Technological readiness 71 102 77 115 60 144 69 7 65 99Market size 131 87 15 121 26 70 35 31 22 34 III. Innovation and sophistication factors 54 116 30 80 17 139 48 11 54 98Business sophistication 56 111 34 79 15 140 46 19 41 106Innovation 59 116 31 84 21 138 52 9 67 87

Brun

ei Da

russ

alam

*

Cam

bodi

a

Indo

nesia

Lao

PDR

Mal

aysia

Mya

nmar

Phili

ppin

es

Sing

apor

e

Thai

land

Viet

nam

70 71

TheEaseofDoingBusinessReportisanotherreportthatprovidedusefulcomparativeinformationonhowenablingand business-friendly a particular economy’s regulatoryframeworkis.Annually,WorldBankresearchersevaluateeconomiesacross10areasofbusinessregulations,fromstartingabusinesstocleaningupinsolvency(WorldBank,2014).Ahigheaseofdoingbusinessrankingmeanstheregulatoryenvironmentismoreconducivetothestartingandoperationofalocalfirm.Table4.3showstheoverallrankingsfortheASEANcountries,aswellastheirrankingineachsub-categoryassessed.Top15rankingsinthesesub-categoriesarehighlightedingreen,whilebottom15

Myanmarrankslastontheglobalscale,intermsofstartinga business. Indicators of this index are the number ofprocedures,thenumberofdaysittakestostartup,thecoststhatareinvolvedandthecapitalthathastobepaidin.LaoPDRranks last for resolving insolvencybecauseof a no practice mark in this sub-category, indicating,thatineachofthepreviousfiveyearsnocasescouldbefoundthatinvolvedajudicialorganisationorliquidationorforeclosures.

ThecentralindicatorofGEM(asnotedinChapter2)istheTotalEarly-stageEntrepreneurialActivity(TEA)rate,whichmeasuresthepercentageoftheadultpopulation(18to64years)thatareintheprocessofstartingorwhohavejuststarted a business. Inefficient government bureaucracy,in particular the red tape associated with starting up and managing a business, can be a significant disincentiveto potential entrepreneurs. Simple business start-up is

positions(i.e.175-189)arehighlightedinred.

ItisclearfromTable4.3thatthecountry-levelindicatorsvaryconsiderablyacrosstheregion.Singaporetopsthegloballist(asin2014)andMalaysiaisranked18thoverall,whereasCambodia,LaosPDRandMyanmararerankedamong the lowest 30% in the global comparison. ApositivetrendisthatthemajorityoftheASEANcountriesimproved their ease of business ranking in 2015,comparedto2014–LaoPDR,inparticular,improvedby7 positions.However, Brunei (-3), Vietnam (-6) and thePhilippines(-9)deterioratedintheirglobalrankings.

thus critical for fostering formal entrepreneurship, andeconomieswithefficientbusinessregistrationprocedureshave a higher entry rate as well as greater businessdensity.

The factors assessed in terms of starting a business(namelythenumberofprocedures,thenumberofdaysittakestostartup,thecoststhatareinvolvedandthecapitalthathas tobepaid in) canbeused toassesswhethergovernment policies foster or constrain entrepreneurialpotentialwithinacountry.Figure4.1andFigure4.2showthedifferencesintheseareasfortheASEANcountries.

Table 4.3: Global rankings of ASEAN countries in ease of doing business, 2015 vs. 2014 (out of 189 countries)

Econ

omy

Ease

of D

oing

Busin

ess R

ank

Chan

ge fi

n Ra

nkin

g

from

201

4 to

2015

Sta

rting

a Bu

sines

s De

aling

with

Con

stru

ctio

n

Perm

its

Getti

ng E

lectri

city

Regi

ster

ing

Prop

erty

Getti

ng C

redi

t

Prot

ectin

g M

inor

ity

Inve

stor

s

Payin

g Tax

es

Tradin

g

Acro

ss B

orde

rs

Enfo

rcin

g Co

ntra

cts

Reso

lving

Inso

lvenc

y

4.2 Assessment of the Entrepreneurial Framework Conditions in six ASEAN countries

Particularenvironmentalfactors(social,politicalandeconomic)areinfluentialincreatinguniquebusinessandentrepreneurialcontexts. The environmental features that are expected to have a significant impact on the entrepreneurial sector arecapturedinthenineEntrepreneurialFrameworkConditions(EFCs),whicharedescribedinTable4.4.AlthoughtheEFCscanbeaddressedatanystageofdevelopment,theseconditionsfunctionbestineconomieswithanunderlyingfoundationofbasicrequirementsandefficiencyenhancers.Forexample,itisunlikelythatgovernmententrepreneurshipprogrammeswillbeeffectiveifthecountryprovidesinadequatehealthcareandprimaryeducationtoitspopulation.

Capital to start a business: % of paid-in minimum capital

Brunei 0.0%Cambodia 26.1%Indonesia 35.5%LaoPDR 0.0%Malaysia 0.0%Myanmar 6190.1%Philippines 3.6%Singapore 0.0%Thailand 0.0%Vietnam 0.0%

Figure 4.1: Starting a business in ASEAN countries - procedures and days

Source: Doing Business Database (World Bank, 2014)

Figure 4.2: Starting a business in ASEAN - costs and capitalSource: Doing Business Database (World Bank, 2014)

Singapore 1 0 6 2 11 24 17 3 5 1 1 19Malaysia 18 +2 13 28 27 75 23 5 32 11 29 36Thailand 26 +2 75 6 12 28 89 25 62 36 25 45Vietnam 78 -6 125 22 135 33 36 117 173 75 47 104Philippines 95 -9 161 124 16 108 104 154 127 65 124 50Brunei 101 -3 179 53 42 162 89 110 30 46 139 88Indonesia 114 +3 155 153 78 117 71 43 160 62 172 75Cambodia 135 +1 184 183 139 100 12 92 90 124 178 84Lao PDR 148 +7 154 107 128 77 116 178 129 156 99 189Myanmar 177 +1 189 130 121 151 171 178 116 103 185 160

With the exception of Singapore and Malaysia, it is clear that starting a business is a complicated, time-consuming and often costly process for most countries in the region, and reform in the regulatory process is needed if an entrepreneurial culture is to flourish.

Brunei Combodia Indonesia

Lao PDR Malaysia Myanmar

Philippines Singapore Thailand

Vietnam

Costs to start a business: % of income per capita

10.4%

139.5%

21.1%5.7 %

7.2 %

155.9 %

16.6 %0.6 %

6.6 %5.3 %

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Framework condition Description

EFC1:Financialsupport Theavailabilityoffinancialresources,equity,anddebt,fornewand growingfirms,includinggrantsandsubsidies.

EFC2:Government Theextenttowhichgovernmentpolicies,suchastaxesorregulations)policiesareeithersize-neutralorencouragenewandgrowingfirms.Therearetwosub-divisions–thefirstcoverstheextenttowhichnewandgrowingfirmsareprioritisedingovernmentpolicygenerally;andthesecondisabouttheregulationofnewandgrowingfirms.

EFC3:Governmentprogrammes Thepresenceandqualityofdirectprogrammestoassistnewandgrowingfirms,atalllevelsofgovernment(national,regional,municipal).

EFC4:Educationandtraining Theextenttowhicheachleveloftheeducationandtrainingsystemincorporatestrainingincreating/managingnew,smallorgrowingbusinessentities.Therearetwosub-divisions–primaryandsecondaryschool entrepreneurship education and training; and post-school entrepreneurship education and training.

EFC5:Researchanddevelopment Theextenttowhichnationalresearchanddevelopmentwillleadtonewtransfer commercialopportunities,andwhetherornottheseareavailablefor

new,smallandgrowingfirms.

EFC6:Commercialand Thepresenceofcommercial,accountingandotherlegalservicesandprofessionalinfrastructure institutionsthatalloworpromotetheemergenceofsmall,newand

growing business entities.

EFC7:Internalmarketopenness Theextenttowhichcommercialarrangementsundergoconstantchangeandredeploymentasnewandgrowingfirmscompetewithandreplaceexistingsuppliers,subcontractorsandconsultants.Therearetwosub-divisions–marketdynamics,i.e.theextenttowhichmarketschangedramaticallyfromyeartoyear;andmarketopenness,i.e.theextenttowhichnewfirmsarefreetoenterexistingmarkets.

EFC8:Accesstophysical Easeofaccesstoavailablephysicalresources–communication,utilities,infrastructure transportation,landorspace–atapricethatdoesnotdiscriminate

againstnew,smallorgrowingfirms.

EFC9:Culturalandsocialnorms Theextenttowhichexistingsocialandculturalnormsencourage,ordonotdiscourage,individualactionsthatmightleadtonewwaysofconductingbusinessoreconomicactivitieswhichmight,inturn,leadtogreater dispersion in personal wealth and income.

Table 4.4: The GEM Entrepreneurial Framework Conditions (EFCs).

Table 4.5: Experts’ assessment of GEM Entrepreneurial Framework Conditions – mean score per ASEAN-6 country

Table 4.6: GEM Entrepreneurial Framework Conditions rated positive >3.5 (+) and negative <2.5 (-), per ASEAN-6 country

TheNationalExperts’Survey(NES)providesinsightsintotheways inwhichtheseEFCseither fosterorconstrainthe entrepreneurial climate, activity and development intheASEANregion.SixoftheASEANcountries(Indonesia,Malaysia,Philippines,Singapore,ThailandandVietnam)participated in the2014GEMsurvey.The remainderofthischapterwillfocuspredominantlyonthedatacapturedbythissurvey.

In order to assess the national conditions influencingentrepreneurial activity, a minimum of 36 experts fromeach of the six countries were interviewed, using botha semi-structured and structured questionnaire. Theclosed questionnaire consisted of several statementsrelatingtoaspectsofthenineEntrepreneurialFrameworkConditions. The responses weremeasured on a Likert

scalefrom“completelyfalse(1)”to“completelytrue(5)”.Thestatementswerephrasedsothatascoreof4or5would indicate that the expert regarded the factor aspositiveforentrepreneurship,whileascoreof1or2wouldindicatethattheexpertregardedthefactorasnegativeforentrepreneurship.Thedataobtainedfromtherespondentswasanalysed inorder todetermine themeanscore foreach category of questions. Table 4.5 summarises theexperts’ perceptions of the entrepreneurial environmentforeachofthesixcountries.OntheLikertscaleoffive,ameanscoreofthreeisregardedasaverage.Themostpositive EFCs are considered to be those with meanscoresbetween3.5and5,whereasthosebetween1and2.5 indicate a negative perception. Table 4.6 highlightsthemostnegativeconditions (<2.5) for eachcountry inredandthemostpositiveconditions(>3.5)ingreen.

EFC Indonesia Malaysia Philippines Singapore Thailand VietnamFinance 3.1 3.4 2.6 3.5 2.7 2.4Government policies 2.7 3.1 2.3 3.7 2.6 2.7Government programmes 2.6 3.2 2.4 3.7 2.1 2.4Education & training 3.0 2.8 3.1 3.2 2.4 2.2R&D transfer 2.6 2.7 2.1 3.2 2.2 2.3Commercial & services infrastructure 3.0 3.3 2.9 3.2 3.3 2.9Market openness 3.1 3.1 2.7 3.1 2.8 2.9Physical infrastructure 3.5 4.1 3.1 4.4 3.7 3.7Cultural & social norms 3.3 3.5 3.1 3.2 2.8 3.1

Finance Government Governmental Education R&D Commercial Market Physical Cultural Policies Programmes & Training Transfer & services Openness Infrastructure and social infrastructure norms

Indonesia Malaysia + Philippines - - - Singapore + + + + Thailand - - - + Vietnam - - - - +

+ + +

+-

---

--

----

+

++

74 75

Regarding the experts’ perceptions, the country levelratings vary significantly – understandable in a region,which incorporates such a diversity of developmentallevels.Indonesia’sexpertsdidnotrateanyoftheEFCsaseitherverypositiveorverynegative,givingmainlyaveragescorestoallnineconditions.InSingaporeamorepositiveperception towards the entrepreneurial environmentexists,whereasstrongnegativeperceptions,especiallyforgovernmentprogrammesandR&Dtransfer,areprevalentin the Philippines, Thailand, and Vietnam. Physicalinfrastructure is the EFC that is rankedmost positively,overall, in the region.With the exception of Philippines(withameanscoreof3.1), the restof thecountriesallratephysical infrastructureasgood,whileMalaysiaandSingaporerateitasverygood.Physical infrastructureistheonlyEFCtoreceivemeanscoresofabove4.R&Dtransfer is theworst rankedEFC,overall, in the region.With theexceptionofSingapore (witha scoreonly justabove average), the rest of the ASEAN-6members allhavemeanscoresbelow3.0,indicatingthatthisEFCisregardedasbelowaverage. 4.3 Key constraints to entrepreneurial activity

In addition to the closed questionnaire, the expertswereaskedto identifyandcommentonthethreemostimportantfactorsconstrainingentrepreneurialactivity,thethree most important factors fostering it, and to makerecommendations aimed at stimulating entrepreneurship in theirrespectiveeconomies.TheEFCswhichareregardedas themainconstraining factors forentrepreneurship inASEAN-6arereviewednext.

4.3.1 Financial Support

Securing sufficient funding is an important resource foreverybusiness,especially forstart-upsand forgrowingfirms.Thefindingthataccesstofinanceisakeyproblemisacommonfeatureof researchonproblemsfacingallentrepreneurs and is apparent in research done in both developedanddevelopingcountries.Inadequatefundingtostartabusinesshasbeenindicatedasaprimarybarriertostartingabusiness formanypotentialentrepreneurs.Manyentrepreneurs raise thestart-upcapital from theirown or family savings rather than approaching formalinstitutions or agencies. Financial institutions generallyrequirecollateralandformalbusinessrecordsascriteriaforconsideringaloan.Asaresult,businessownerswholackcollateralorwhohavenotkeptformalrecordsfortheirbusinessarelesslikelytobesuccessfulinapproachestofinancialinstitutions.Giventhatstart-upfundingforsmallbusinessesoftencomesfrompersonalsavingsormoneyfromfamilies,theyouth,womenandpeopleinruralareasarelikelytobeparticularlydisadvantagedintheirattemptsto start small businesses.

Access to financing is among the most problematicfactors for doing business in all ten member countriesof theASEAN(Schwabetal,2014).Table4.3 indicatesthataccess tofinancewas regardedasoneof the twobiggestobstaclestosuccessfulbusinessdevelopmentbybusinessexecutivesintheASEANregionin2014.

This factor is particularly critical forMalaysia (at 75.9%significantly above the average), followed by Thailand(68.6%)andSingapore(60.0%).ThefinancialconstraintsinVietnamareconsiderablylower(25%),despitebeingoneofthetoptwoconstraintsforthecountry’srespondents.

Despite funds and capital being available in Malaysia,access to those resources is considered difficult. Inordertobeabletogetapprovalforgrantsandfinancingthroughbanks,toomuchcollateralisrequired.Althoughbanks offer funding, their risk-averse approach is notsuitedtoentrepreneurialventures.Cronyisminthecapitalmarket, conservative banking practices and the lack ofventurecapitalistscontribute to thefinancialconstraintsexperiencedbyentrepreneursinMalaysia.

Thailand’s banks are not very willing to supportentrepreneursandfundingisexpensiveduetohighinterestrates, especially for SMEs. Funding is often providedthroughentrepreneurs’ownmeansandfundingbybanksseems tobescarce. Investment fundingandavailabilityoffundsforworkingcapital(whichisinsufficientinmanyThaienterprises)arenotavailableornotaccessible.

Indonesian enterprises face similar problems regardingfinance:high interest ratesandhighcollateral for loans,combined with the business practice in banks toprovide fundsmainly foralreadysuccessfulbusinesses.Financialconstraintsareprevalent forsmallbusinesses,for start-ups who need initial capital, and for growingenterprises,whereequityandothertypesoffinancingdonot suit the entrepreneurial needs.

In Vietnam, theory and practice in mobilising funds forstart-ups and for business expansions diverge widely.International funding is not available and banks areincreasinglyafraidofbaddebtswhichhasresultedinthebankstighteningtheirlendingconditionsandlimitingtheirsupplyofcapitaltoentrepreneurs.

A number of experts regard a lack of seed funding forsmallstart-upsasaconstraintonentrepreneurialactivity.TheAsianDevelopmentBank(ADB,2014)states,thatin2013“SMEloansmadeup25%oftotalbanklendinginAsiaandthePacificonaveragein2012,downfrom27%in2011.SMEloansgrewat10%year-on-year in2012,downfrom19%in2011.ThisindicatesbanksareraisingriskconsciousnesstoSMEcreditfromtheperspectiveofbankingstability”. InmanyAsiancountries,publiccreditguaranteesarecontributingtoenhancingSME.However,SMEsstillhavelargeunmetdemandforfinancing.

Many measures have already been developed at thenationalleveltoimproveSMEaccesstofinance.Amongothers, these include public credit guarantee schemesin Indonesia (People’s Business Credit) and Thailand(portfolio guarantee scheme), mandatory lending inthe Philippines, refinancing schemes inMalaysia and aSMEBank,andtheestablishmentofacentralisedcreditbureau inVietnam.Manypolicies inAsia-Pacifictendtofocus on enhancing loans through banking institutionsin Asia-Pacific, whereas there is a lack of policies forboth non-banking financing options and capitalmarketfinancingforSMEs.

Economic expansion in Asia and the Pacific and theupcomingASEANEconomicCommunityAEChas alsocreatedafoundationofgrowth-orientedSMEswithaneedfor long-termgrowthfinancing.SMEs inSoutheastAsiawillbeexposedtofurtherliberalizedtradeandinvestmentafter the establishment of theAssociation ofSoutheastAsianNationsEconomicCommunityAEC in2015.Thisnewenvironmentwill requirenewfinancingsolutionsforSMEexportersand importersand forSMEs,whoneedtoraiselong-termcapitalforfurthergrowth(ADB,2014).

ToclosethefinancegapforSMEs,theADBdevelopedseveral fundsandfinanceprograms, i.e.asupplychain

finance program for SMEs in Asia by partnering withStandardCharteredBank to share the risk in financinganda funddesigned tosupport thegrowthofSMEs inSoutheastAsia(ADB,2014).

It is important to note that although access to financeisanecessary factor ingrowingentrepreneurial activity,it is not a fundamental factor. Providing finance in theabsenceofadequateinfrastructure,marketopportunitiesandbusinessandmanagementskillsisunlikelytoleadtoanincreaseinthenumberofsuccessfulbusinesses.

4.3.2 Government policies

The importance of government policies in enhancingentrepreneurial activities is recognised throughout theworld. Although it is not governments’ responsibility tostartnewbusinessesandprovideemployment,itistheirresponsibilitytoprovideanenvironmentthatisconducivetostartingandsustaininganewbusiness,throughreformsandregulationsthatincreasetheeaseofdoingbusinessandlessenunnecessarybureaucraticburdens.Figure4.4shows thatwithin thesixASEANcountries, theexpertsbelieve that government policies are not sufficientlyimplemented inpractice,even if thewill tosupportnewand growing firmsmight be there. On average, half ofthenationalexperts regard“governmentpolicies”asanimportantconstrainingfactorforentrepreneurship,ledbyVietnam (83.3%), Indonesia (70.6%)and thePhilippines(52.9%). Inefficient government bureaucracy is alsorankedbytheWorldEconomicForumasoneofthemostproblematicfactorsfordoingbusinessinCambodiaandMyanmar (3rd most problematic), Brunei Darussalam(4th)andLaoPDR(6th).

Figure 4.3: Average expert ratings on financing for new and growing firms across ASEAN-6 countries (five point scale)Source: 2014 GEM NES Survey

According to the NES survey, financial constraints are prevalent in all six ASEAN countries as one of the top three constraints in 2014, with more than half of the experts (average 54.9%) stating that the lack of or inappropriate financial support is hindering entrepreneurship in their countries.

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Figure 4.4: Average expert ratings on government policies for new and growing firms across ASEAN-6 countries (five point scale) Source: 2014 GEM NES Survey

Singapore is an exception in the region, with expertshaving generally positive perceptions of governmentpolicies and programmes. In Singapore, governmentpolicies are considered less constraining than factorssuchasfinance,culturalandsocialnorms,andanopenmarket.InallotherASEANcountries,theexpertsrefertoahigh levelofbureaucracyandthe lackofgovernmentgoodwill. Prolix procedures, paperwork and too manyapplication procedures influence the cost incurred andprolongthetimerequiredforbusinessstart-up.

Vietnamese experts cite the existence of by-laws,especiallywhenitcomestoregisteringanewbusiness,and the lack of consistency between ministries andagencies in implementing business regulations. Dealing withtoomanyauthoritiesandtoomanyproceduresaretime-consuming for entrepreneurs, and the resultingoutcome is unpredictable due to inconsistent and inadequate state regulations. The legal system itself iscomplicated,withpartlyoverlappinglawsandregulations.Institutionslackalong-termorientationanddonotfocusonbeneficialdevelopment forenterprises.Sincealmostallagenciesandrelatedauthoritiesdonothavesufficientmarket knowledge, this might lead to benefits for onegroupwhiledisadvantaginganother.

A key constraining factor that hinders entrepreneurshipin the ASEAN region is the highly prevalent corruption.In 2014, according to the Global CompetitivenessReport 2014-2015, corruption was regarded as thebiggest obstacles to successful business developmentby business executives in Cambodia, Malaysia, thePhilippines and Thailand, and as the second biggestproblem for Myanmar and Vietnam. This constraintis mentioned under government policy, as reducedincentives for corruption and better enforcement oflaws against it are the responsibility of politicians andgovernmentofficials.

4.3.3 Market Openness

Internal market features such as demand and supply,importandexport,monopoliesorexistingentrybarriersare able to limit entrepreneurial activities. Despite theforthcoming ASEAN Economic Community (AEC)(projected to be in place by the end of 2015) the lackofmarketopennesswasnamedasoneof the top fourconstraints in the ASEAN region. This sheds light on how farapartandhowlittlepreparedtheexpertsconsidertheircountries tobe in thecurrent climate.Only theexpertsin the Philippines did not consider the existing marketopenness as a constraint to entrepreneurship.

Figure4.5 indicates thateaseofmarketentry;costsofmarketentryandunfairblockingofmarketsbyestablishedbusinesses are regarded as obstacles to entrepreneurial activity. Intensecompetitionandexistingmonopolies inthemarketsarethemostpressingconstraints.

Figure 4.5: Average expert ratings on market openness for new and growing firms across ASEAN-6 countries (five point scale) Source: 2014 GEM NES Survey

Figure 4.6: Average expert ratings on R&D transfer for new and growing firms across ASEAN-6 countries (five point scale)

Pressingissuesregardingmarketopennesscitedbytheexpertsinclude:

• Intenseaswell as internationalcompetitionversus theperception of ownpoor competitive capabilities in themarket

• Existingmonopoliesinsomeindustriesandmultinational corporations rooting down

• Lackofpatentsandintellectualpropertyprotection• Domesticmarketsareseenassmall-scalemarkets• Difficultiesinenteringandconnectingtonewmarkets• Limitedsupplierbaseandhighproductioncosts

4.3.4 Research and development transfer

Intheclosedsectionofthequestionnaire,R&DtransferwastheworstrankedEFC,overall,intheregion.Innovationcapabilities-whichareimportanttoeconomies’abilitytobecome competitive, particularly in higher-productivitysectors – are heavily dependent on research anddevelopment. Effective innovation capabilities require abusiness environment that facilitates entrepreneurshipand provides the access to finance necessary forthe creation and growth of innovative firms. Such anenvironmentneedstobesupportedbyeffectiveuniversityandresearchinstitutionswithstronglinksto industry. ItisclearfromFigure4.6thattheexpertsbelievethatthenew and growing firms are constrained in their accessto critical new technologies, and that public institutionssuchasuniversitiesarenotplayingaconstructiveenoughrole in facilitating knowledge transfer and stimulatinginnovation.

Table 3.1 indicates that when compared to other geographical regions, the ASEAN-6 region is the best performer in terms of gender equity with respect to male and female participation in early-stage entrepreneurial activity (TEA), as well as significantly better than the GEM average.

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Pressing issues regarding R&D transfer cited by theexpertsinclude:

Malaysian experts are concerned about access toresearch and intellectual property rights. They believethatmoremustbedonetoensure that researcheffortsand outcomes from research institutes and universitiesarepublished andmade easily available to businesses.IncentivesshouldbeprovidedtoencouragesharingandcommercialisationofR&Dresults.

Experts in the Philippines believe there are no supportstructures to assist new businesses with integrating technologyeffectively-newbusinessesownershavetorelyontheirinnatecreativityandresourcefulness,andmanageontheirown.Anareaofconcernisthelimitedemphasison technical,scientificandtechnological innovations forapplication in Philippine society (entrepreneurship forbettergoods-exact,measurable,andreplicablethroughproductionlines)andaswellastoolittlecommitmenttodevelopingartistictalentsandthehumanities(subjective,hard to replicate, and oriented towards the servicessector). Collaboration between academia – privatesector- government is needed on innovation, researchanddevelopment(forexample,setupaninnovationfundandstartup incubationcentres forviablenewbusinessventures).ApositivetrendnotedinthePhilippinesisthehigh level of exposure to the Internet realm, translatingintoeasyaccessandknowledgeofcurrenttrends,andintegrationwiththeinternationalcommunity.

InVietnam, theexperts feel that information technologyhas been developed rapidly and effectively. New andappropriatetechnologiesforenterprisesareresearched,updatedanddisseminatedonaregularbasis.However,they believe that there is insufficient R&D support toencouragecutting-edgetechnologicalinnovation.

Start-up owners in Thailand must be encouraged,through appropriate incentives, to focus on technologyandR&Dinordertocreateinnovationhubsinthecountry.Thai entrepreneurs need access to more informationsources on production and management technologies. Transferred knowledge and best practice models fromsuccessfulbusinessesofothercountriesareneeded tostimulate the Thai entrepreneurial sector.

4.4 Key recommendations from the national experts

The top three recommendations of the experts differedbetween countries, due to different starting points anddifferent economic imperatives. However, there wereseveral overlapping areas of recommendation, includeadjustments infinancialsupport, ingovernmentpoliciesandgovernmentprogrammes.Thekeyrecommendationsofferedbythepanelsofexpertsaresummarisedbelow.

Financial Support• Ingeneral,theexpertsfeltthateasieraccesstofunding

sources and to capital, lower restrictions on loanapplicationsand lowercostsof the financial sourcescould improve entrepreneurship conditions in thesurveycountries.

• Introduce a one-stop shop where entrepreneurs(establishedandnewbusinessesaswellasstart-ups)areabletoaccessinformationonavailablefundingandgrants,receiveadviceandhelpwithbusinessplanning,andaccesstraininginentrepreneurialskills.

• Encourage and expand private equity solutions forentrepreneurs. In some of the member countriesaccesstoprivateequityislimited,especiallyforsmallerbusinesses.Theprovisionoftheinitialfinanceshouldbecoupledwithmandatorymentoringforanextendedperiod,forexamplethefirstthreeyears.

• Provide specific monetary policies to strengthen themanufacturingsector.

• Introduce a start-up community which is financiallysupportedbyprivatefirms.

• Provide a combination of venture capital andgovernment support as a collaborative system toassist entrepreneurs.

Government policies

• Support from both private and government sectors,even if it is limited, should be readily available andaccessibleandincludeafeedbackmechanism.

• General improvementof thebusinessenvironment inthecountriesiscrucial,e.g.regulations,infrastructuresupport and trade facilitation. The ease of doingbusinesscouldbe improvedby introducingone-stopservicesandreducingtheneedtogofromoneagencyto another for application, issuance of businesspermits,taxandotherrequirements.

• Policies could providemore assistance in organisingentrepreneurialcommunitiesorgroupsbyestablishingshared production facilities and shared marketingactivities.

• Implementationofgovernmentpoliciesrequiresgoodpublic servants who are also stringently policed in

their conduct. Individual responsibility and ethicswithinthepublicservicesshouldbeclearanddefined.Within an often bureaucratic government system, allstakeholders should be oriented towards assistingaspiring entrepreneurs by streamlining proceduresinstead of “milking” these applicants of their time,efforts,resources,andmoney.

• Trainingofgovernmentagencies inentrepreneurship,businessandeconomicsandreformingadministrativeprocedures could help to build the professionalcapacitiesoftheadministrativeofficers,enablingthemtobetterunderstandandserveentrepreneurs.

Government programmes

• A national or even a regional ASEAN agenda forentrepreneurship could help to step up progress in promoting entrepreneurship by providing moresupport through training programs, rebates, fundingandgrants,projects,taxincentivesandotherpoliciesaimed at helping entrepreneurs to start up or grow their companies,orassistingotherstoinvestinenterprises.

• Reviewtaxreformsandallocatepropersubsidiesandincentives (e.g. tax breaks) for legitimate businesseswith proven track records that are innovative,sustainable and can contribute to job generation.

• Since corruption is a topic prevalent in all ASEANcountries to different degrees, governmentprogrammesneedtotacklecorruptionissuesaswellasreducesbureaucracyforenterprises.

• Reducedtaxesonimportingessentialmaterialscouldmake especially MSMEs more competitive. Thesecould include tax breaks to import solar panels, forexample, which have the added benefit of reducingelectricitycostsofenterprises.

• Rulesandregulations forbusinessesshouldbecleartofollow,efficientandrealistictoachieve.Inaddition,when there are support programs for enterprises inplace,theyshouldbeeffectivelycommunicatedtotheintendedbeneficiaries.

• Introducegovernmentprogrammesfocusedonthosestart-ups that have the capacity to expand theirmarketsinternationallyorglobally.

• In some countries, failure to pay back loans withina certain time period leaves the entrepreneur on a“blacklist” (in Thailand: of the credit bureau) for thefollowing ten years, during which the entrepreneuris unable to receive further bank or credit loans.This listing is independent of the fact that this eventmight havebeena temporary glitch in thebusiness,and solved shortly afterwards. A solution could bethat informationonhowanentrepreneurperforms inre-payinghisdebtsisintegratedintothislist.

Education & training and capacity for entrepreneurshipRegardless of a country’s stage of development,foundations for a sound education and training forentrepreneurshipshouldstartearlywithabasiceducationthatprovidesthenecessaryessentialentrepreneurialskills.Encouragementofchildrentoventureabroadandbecomemoreinternational,andincorporationofentrepreneurshipwithan innovation-andcreativity-orientedmindsetevenat the elementary level, needs training of teachers toenable them to provide these skills sets. A 2013 ILOsurveyofASEANenterprisesandbusinessorganisationson enterprise development confirmed that difficulties intheworkforce,facedbyyoungwomenandyoungmen,reflectamismatchofcapabilitiesandworktasksasmuchasgeneralskillsgaps(ADB&ILO,2013).ThebestfitofskillssetforemployeeswasreportedforSingaporeandthePhilippines (bothwithan80%fit),whilesignificantlylower rates were found in Cambodia and Myanmarwithafitofbelow40%(Brunietal,2013).Similarskillsgaps can be assumed for the entrepreneur, who oftenhas a self-learningbackground. Especially for Thailand,improvementsinthecapacityforentrepreneurshipandinaccesstoinformationnecessarytorunabusinessaretwomaintopicsexpertsfocusontofosterentrepreneurship.

Recommendations include:

• education for entrepreneurs how to grow a smallbusinesstoamedium-sizedbusiness;

• education for an “entrepreneurship for improvedgoods”withmoreemphasisontechnical,scientificandtechnologicalinnovations;

• developing creative talents and talents in the field inhumanities which will lead to increasingly harder toreplicate products; and

• exposuretootherculturesaroundtheworld, inordertodevelopahighdegreeof tolerance,empathy,andcross-cultural understanding.

Inconclusion,animportantfocusofthenationalexperts’survey,throughhelpingtoidentifykeyweaknessesintheentrepreneurialenvironment, istoprovidepolicymakersand business leaders with information that enablesthem to put into place precise, practical and targetedrecommendations. Entrepreneurial activity is an outputof the interaction of an individual’s perception of anopportunity and capacity (motivation and skills) to actupon thisAND thedistinct conditionsof the respectiveenvironment in which the individual is located. .Aneconomy cannot increase the quantity and quality ofpotential and intentional entrepreneurs without creating anenablingenvironment inwhichentrepreneurshipcanflourish.Informedpolicydecisionswhichhelptocreateanourishingentrepreneurialenvironmentwillbeofbenefittoentrepreneurs inallphasesof theirbusinesses,be ityoungstart-ups,establishedorrepeatentrepreneurs

An important focus of the national experts’ survey is not only to identify key weaknesses in the entrepreneurial environment, but also to obtain precise and practical recommendations that can be used to inform policy decisions. National experts from the six ASEAN countries that participated in the 2014 GEM cycle were asked for recommendations to enhance entrepreneurship in their respective countries.

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CHAPTER 5: POLICYRECOMMENDATIONSANDCONCLUSIONS.

IntheheatandwetofanAsiantropicalenvironment,wheresomeeconomiesraceforwardevenasothersplodalong,whereuncertaintyandchangeisconstant;thereinliesthebreedinggroundforinnovationandentrepreneurship.

The demographic dividend that many of the ASEANeconomies have enjoyed will diminish due to a lowpopulationreplacementrateby2020.However,itremainsimperative for policymakers, business and civil societyleaderstoworktogether,inordertoidentifyandstrengthenthe forces that foster innovation and facilitate moreproductive economies Entrepreneurs invent, improveand innovate.Ultimately, the impactofentrepreneurshiponcountries isall thegreater, forentrepreneursare joband wealth creators. They have a multiplier effect onthose around them and on the economy. High impactentrepreneurs affect those around them by mentoringas well as providing smart capital and partnerships,thus perpetuating the entrepreneurial ecosystems ofeconomies.

Policy makers will need to take a holistic andcomprehensiveapproachtoensuringthatentrepreneurialpolicieswork.AmajorstepistofacilitateandembedanentrepreneurialecosystemwithintheASEANcontext.

5.1 An ASEAN entrepreneurial ecosystem

An entrepreneurial ecosystem is at worst a vague andindeterminatenotionandatbestadynamicandstirringconcoctionofkeybusinessdriverscomprisingbankers,investors, educators, incubators and other relevantclusters.Fundingisrequiredbutestablishedconservativefinancial institutions tendonly to lendmoneysubject totheircomfortlevelswhentakingrisks(i.e.oftendemandinghighcollaterals).Accesstofundingisalsosubjecttothe

privateequityandventurecapitalindustrysizeswithintherespectivecountries.Itisoftenthecasethatindevelopingeconomies, funders shy away from mezzanine andstart-upfundingandprefertofocusonbiggerandsaferprojects,e.g.restructuringsandmergers.

ThisemphasisestheimportanceofGEM’sresearchstudy,in that it allows for country-specific insights whilst alsofacilitating regional and even global comparisons. Thisinformationmakesitpossibletoidentifythe‘must-haves’forASEAN’seconomiesthatcancontributetogeneratinganentrepreneurially-enabledeconomy.Thefollowingarekeyfocusareas:

I. Governmental initiatives and projects with clearentrepreneurialcriteria(in linewiththeentrepreneurialframework conditions discussed in Chapter 4). Inthis regard, the training of government agencies inentrepreneurship,businessandeconomicsaswellasreforming administrative procedures could help buildthe professional ability of administrative officers tobetterunderstandandserveentrepreneurs.

II. Anopennesstobothnewandincrementalinnovations,evenwithin traditional industries. Thiswill encouragethe efficient and productive growth of agricultural,manufacturing and mining activities, an importantstapleforsomeASEANeconomies.

III.Talent-driveninitiativesthatattractandkeeptherighttalents-bothforstart-upsandinnovationintegratorse.g. via tax incentives and equity contracts. This iscurrentlyamajorchallengeforASEAN,asagreatdealof talentorhumancapital is lost tohighlydevelopedcountries.

IV.Meaningful media communication that permeates all

tiersofrelevantstakeholders,highlightinglocalASEANentrepreneurship success stories.

V. Anentrepreneurshipeducationalimperative(alongwithhigher enrolment rates) that starts from the primaryphase and is emphasised throughout the learning continuum,includingacademicandvocationalschools,bothruralandurban.SingaporeandMalaysiaalreadyallocate the highest public expenditure to within theregion to education and patent applications (OECD,2010c).

VI.An understanding of the imperatives and extendedconsequences of entrepreneurship for an economyover themid to long term i.e.anemphasisonR&D,highgrowthandsustainabilityfornewstart-ups.

VII.Good IT infrastructurecoupledwith inclusiveness foralltheplayerswithinaneconomy.

VIII.Working and upskilling spaces that counteractuncertainty and high costs, e.g. accelerators,incubators and coaching agencies.

IX.Individually tailored and holistic developmentprogrammes for SME vendors of select industriesthat aredevelopedand fundedby corporateplayerse.g.CIMBGroup’sBumiputera VendorDevelopmentProgramme. Programmes that include KPI setting,measurementandinterventionsforatleast30months.

X.Engaging localised entrepreneurial capacity buildingacrossmodalitieswithinindividualASEANeconomiese.g.theInternationalDevelopmentResearchCentre’s(IDRC) ongoing regional entrepreneurship researchfundingthatsupportsprojectswithinASEAN.

These initiatives for policymakers are by no meanscomprehensive but they will provide a solid foundationto facilitate and nurture the entrepreneurial enterprisesthatcanprovideemploymentandeconomicgrowth forASEAN nations.

5.3 Directed-urgency for ASEAN policy makers

Ultimately governments need to imbue a sense ofdirected-urgency into their approach.How?This reportprovides ample evidence that most governments domake efforts to stimulate entrepreneurship. However,they risk overemphasising start-ups over high growthand sustainable enterprises. This results in steroidal entrepreneurship i.e. a high number of businesses thatstart up but do not last.Most will disappear within 10years.

The directed-urgency should be towards high growthandsustainabilityofentrepreneurialbusinesses.Thiswillrequire coaching, research and development initiativesover the mid to long term. The number of start-ups

may be lower but these enterprises, though few, arelikelytobemoresustainableandprofitableinthelongerterm,able togrowand tohaveapositiveeffecton theeconomicandemploymentoutcomesthatgovernmentsseek. Within ASEAN, entrepreneurial acceleration canonly be achieved through each government’s directedsenseofurgency.Thepolicy-makingmechanismswithinSingaporeandMalaysiaareindicativeofsuchimperatives;asimilarpolicyfocusisapparentinotherSoutheastAsiancountriesaswell,albeitinapiecemealfashion.

5.4 Stage-case for entrepreneurship development in ASEAN

Economies within the ASEAN are diverse in terms oflevel of economic development, including factor-driven,efficiency-driven and even innovation-driven economies(based on the World Economic Forum’s (WEF) GlobalCompetitivenessReportcategories).Basedonchallengesand successes in other economies in each of thesecategories, some key policy opportunities are brieflyoutlined.

Factor-driven economies in ASEAN• Emphasise education and enrolment for education

overall, including entrepreneurship education. Allstages of the entrepreneurial pipeline are dependenton a good basic education. The effectiveness ofentrepreneurialeducationisenhancedbyagoodbasiceducation.

• Import technology but also adapt technology toincreaselocalcapacitiesandefficiencies.

• Reduce low value adding activity and invest inlearning opportunities by encouraging and engagingentrepreneurial aspirations.

• Embed gender and earnings neutrality inentrepreneurial business endeavours, thus providingequalopportunityfortheengagementandsupportofwomen entrepreneurs.

• Identifyandfocusonkeyentrepreneurial resultareasas part of an overarching policy for themid to longterm.

Efficiency-driven economies in ASEAN• EmphasizeSTEMlearning.

• Workagainstthemiddle-incometrap.

• Encourage and incentivise innovation especiallytechnology-basedinnovation.

• Encourageforwardandbackwardintegration.

• Linkintoglobaleconomiesandbeapartofthegrowingglobalsupplychainse.g.USA,ChinaandIndia.

Policy makers will realise that entrepreneurship leads to prosperity and peace for all nations. It is the antidote for poverty - an instrument for prosperity.

There is no one formula that can provide the outcomes desired by diverse economies in ASEAN.

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• Move intovalue-additionwithanemphasisonhigherend services e.g. finance, insurance and integrationservices.

Innovation-driven economies in ASEAN• Work towards quality of enterprises as opposed to

quantity. Support R & D efforts that offer high endgrowth opportunities that create global companies.

• Encourage greater collaboration with regional andinternationalR&Dinitiatives.

• Attract, incentiviseandretaintalent forkey industriesthatarestrategicallyimportantfortheeconomy.

This research study has provided us an overall viewof ASEAN entrepreneurship. Though it may not becomprehensive, the study of a people’s aspirations,attitudes and activity is by no small measure a usefulyardstick - a yardstick that will allow policy makers toderive evidence-based information about their citizens’preparedness for an entrepreneurial future. Suchinformationwill allow for inclusive and enabling policiesthat will fuel and support the entrepreneurial trajectorythatallofASEANcanandshouldstrivefor.Therewillbenodisadvantagedeconomy insuchendeavours,asthespill-overeffectofsuccess fromeachnationwill impactpositivelyallotherASEANeconomiestoo.

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WorldBank.2014.DoingBusiness2015:GoingBeyondEfficiency.Washington,DC:WorldBank.DOI:10.1596/978-1-4648-0351-2.License:CreativeCommonsAttributionCCBY3.0IGO

Xavier,S.R.,Kelley,D.,Kew,J.,Herrington,M.,&Vorderwulbecke,A.(2012).GlobalEntrepreneurshipMonitor2014GlobalReport. London: Global Entrepreneurship Research Association.

84 85

APPENDIX 1 TABLE A.1 PERCEPTIONS OF SOCIAL VALUES REGARDING ENTREPRENEURSHIP IN THE GEM ECONOMIES IN 2014, BY STAGES OF ECONOMIC DEVELOPMENT (% OF POPULATION AGED 18-64)

Stages of economic development and GEM economiesEntrepreneurship as a good career choice

High status to successful entrepreneurs

Media attention to entrepreneurship

Stage 1: factor-driven (includes countries in transition to stage 2)

Angola 75.10 81.65 71.69

Bolivia 70.26 77.00 76.50

Botswana 69.94 78.11 74.55

Burkina Faso

Cameroon

India 57.93 66.16 56.62

Iran 52.26 75.61 55.09

Philippines 81.80 78.13 84.70

Uganda

Vietnam 67.15 75.92 86.83

Average (unweighted) 67.78 76.08 72.28

(includes countries in transition to stage 3)

Argentina 57.82 52.20 63.63

Barbados 57.61 58.50 46.30

Belize 57.80 55.46 43.25

Bosnia and Herzegovina 78.15 69.94 39.85

Brazil

Chile 69.43 64.43 65.21

China 65.68 72.91 69.28

Colombia 70.45 67.13 74.42

Costa Rica 61.33 59.00 79.70

Croatia 63.27 46.58 40.44

Ecuador 66.43 67.13 82.89

El Salvador 82.57 59.49 59.55

Georgia 65.99 75.92 58.45

Guatemala 95.33 76.92 60.61

Hungary 47.39 72.38 33.47

Indonesia 72.86 77.96 84.79

Jamaica 83.50 84.05 83.90

Kazakhstan 78.62 74.35 82.97

Kosovo 68.28 76.18 57.22

Lithuania 68.81 58.33 55.14

Malaysia 50.37 49.95 69.85

Mexico 53.22 50.76 45.48

Panama

Peru 82.43 81.38 83.62

Poland 63.28 56.45 54.52

Romania 73.64 75.22 71.34

Russia 67.12 65.93 50.43

South Africa 69.58 72.92 72.57

Suriname 66.75 67.18 80.66

Thailand 73.60 71.11 80.31

Uruguay 62.13 56.72 60.83

Average (unweighted) 68.05 66.09 63.82

Stages of economic development and GEM economiesEntrepreneurship as a good career choice

High status to successful entrepreneurs

Media attention to entrepreneurship

Stage 3: innovation–driven

Australia 53.35 67.09 72.56

Austria

Belgium 52.41 51.73 50.82

Canada 57.25 69.72 67.73

Denmark

Estonia 55.56 64.93 43.34

Finland 41.24 84.40 66.93

France 59.05 70.43 38.98

Germany 51.66 79.10 51.41

Greece 58.42 66.42 45.80

Ireland 49.39 76.88 75.68

Italy 65.05 72.09 48.28

Japan 30.98 55.81 58.70

Luxembourg 40.66 68.18 43.54

Netherlands 79.11 67.77 55.66

Norway 58.16 83.47

Portugal 62.23 62.94 69.75

Puerto Rico 18.51 51.13 72.70

Qatar 75.83 87.06 76.75

Singapore 51.73 62.91 79.10

Slovakia 45.42 58.05 52.57

Slovenia 53.39 72.31 57.56

Spain 53.94 48.99 46.33

Sweden 51.58 70.90 60.30

Switzerland 42.30 65.81 50.43

Taiwan 75.22 62.57 83.50

Trinidad & Tobago 79.47 69.50 65.60

United Kingdom 60.30 74.99 58.36

United States 64.73 76.87 75.83

Average (unweighted) 55.07 68.22 60.32

86 87

TABLE A.2 INDIVIDUAL ATTRIBUTES IN THE GEM ECONOMIES IN 2014, BY STAGES OF ECONOMIC DEVELOPMENT (% OF POPULATION AGED 18-64)

Stages of economic development and economiesPerceived

opportunities Perceived

capabilitiesFear of failure*

Entrepreneurial intentions **

Stage 1: factor-driven (includes countries in transition to stage 2)

Angola 69.75 61.68 44.81 39.34

Bolivia 57.67 73.11 38.39 46.94

Botswana 57.16 67.14 13.70 63.37

Burkina Faso 63.61 65.89 23.75 42.34

Cameroon 69.34 73.77 22.80 55.57

India 38.91 36.70 37.67 7.66

Iran 27.68 59.45 32.70 25.48

Philippines 45.89 66.15 37.68 42.84

Uganda 76.91 84.86 12.55 60.19

Vietnam 39.36 58.20 50.13 18.20

Average (unweighted) 54.63 64.70 31.42 40.19

(includes countries in transition to stage 3)

Argentina 31.91 57.78 23.54 27.83

Barbados 38.16 63.51 23.44 11.48

Belize 49.55 69.00 32.63 10.09

Bosnia and Herzegovina 19.59 47.30 26.80 20.43

Brazil 55.54 49.96 35.56 24.50

Chile 67.00 64.87 28.39 50.14

China 31.88 32.97 39.50 19.33

Colombia 65.74 57.41 30.70 47.01

Costa Rica 39.00 59.39 36.83 28.95

Croatia 18.43 45.91 30.30 19.50

Ecuador 62.02 72.81 30.67 43.10

El Salvador 44.69 70.81 34.90 23.06

Georgia 36.58 37.54 34.78 15.58

Guatemala 45.38 64.17 33.03 35.79

Hungary 23.40 40.94 41.96 13.89

Indonesia 45.46 60.20 38.12 27.36

Jamaica 57.05 81.23 22.04 35.33

Kazakhstan 26.50 52.54 23.83 15.41

Kosovo 65.62 65.20 26.73 6.31

Lithuania 31.66 33.44 44.77 19.65

Malaysia 43.40 38.40 26.75 11.63

Mexico 48.87 53.48 29.61 17.40

Panama 43.26 54.38 14.63 19.67

Peru 62.31 69.42 29.11 50.60

Poland 31.35 54.30 51.11 15.56

Romania 32.41 48.44 41.25 31.70

Russia 26.50 27.83 39.49 3.53

South Africa 37.00 37.65 25.37 10.05

Suriname 41.03 77.36 16.10 4.55

Thailand 47.35 50.12 42.44 21.75

Uruguay 45.56 63.12 26.71 24.82

Average (unweighted) 42.39 54.89 31.65 22.77

TABLE A.2 INDIVIDUAL ATTRIBUTES IN THE GEM ECONOMIES IN 2014, BY STAGES OF ECONOMIC DEVELOPMENT (% OF POPULATION AGED 18-64)

Stages of economic development and economiesPerceived

opportunities Perceived

capabilitiesFear of failure*

Entrepreneurial intentions **

Stage 1: factor-driven (includes countries in transition to stage 2)

Angola 69.75 61.68 44.81 39.34

Bolivia 57.67 73.11 38.39 46.94

Botswana 57.16 67.14 13.70 63.37

Burkina Faso 63.61 65.89 23.75 42.34

Cameroon 69.34 73.77 22.80 55.57

India 38.91 36.70 37.67 7.66

Iran 27.68 59.45 32.70 25.48

Philippines 45.89 66.15 37.68 42.84

Uganda 76.91 84.86 12.55 60.19

Vietnam 39.36 58.20 50.13 18.20

Average (unweighted) 54.63 64.70 31.42 40.19

(includes countries in transition to stage 3)

Argentina 31.91 57.78 23.54 27.83

Barbados 38.16 63.51 23.44 11.48

Belize 49.55 69.00 32.63 10.09

Bosnia and Herzegovina 19.59 47.30 26.80 20.43

Brazil 55.54 49.96 35.56 24.50

Chile 67.00 64.87 28.39 50.14

China 31.88 32.97 39.50 19.33

Colombia 65.74 57.41 30.70 47.01

Costa Rica 39.00 59.39 36.83 28.95

Croatia 18.43 45.91 30.30 19.50

Ecuador 62.02 72.81 30.67 43.10

El Salvador 44.69 70.81 34.90 23.06

Georgia 36.58 37.54 34.78 15.58

Guatemala 45.38 64.17 33.03 35.79

Hungary 23.40 40.94 41.96 13.89

Indonesia 45.46 60.20 38.12 27.36

Jamaica 57.05 81.23 22.04 35.33

Kazakhstan 26.50 52.54 23.83 15.41

Kosovo 65.62 65.20 26.73 6.31

Lithuania 31.66 33.44 44.77 19.65

Malaysia 43.40 38.40 26.75 11.63

Mexico 48.87 53.48 29.61 17.40

Panama 43.26 54.38 14.63 19.67

Peru 62.31 69.42 29.11 50.60

Poland 31.35 54.30 51.11 15.56

Romania 32.41 48.44 41.25 31.70

Russia 26.50 27.83 39.49 3.53

South Africa 37.00 37.65 25.37 10.05

Suriname 41.03 77.36 16.10 4.55

Thailand 47.35 50.12 42.44 21.75

Uruguay 45.56 63.12 26.71 24.82

Average (unweighted) 42.39 54.89 31.65 22.77

88 89

Stages of economic development and economiesPerceived

opportunities Perceived

capabilitiesFear of failure*

Entrepreneurial intentions **

Stage 3: innovation–driven

Australia 45.72 46.80 39.21 10.02

Austria 44.40 48.67 34.92 8.15

Belgium 35.93 30.40 49.35 10.55

Canada 55.52 48.98 36.52 11.96

Denmark 59.66 34.88 40.99 6.92

Estonia 49.44 42.47 41.77 9.85

Finland 42.38 34.88 36.76 7.94

France 28.26 35.44 41.18 14.20

Germany 37.59 36.40 39.95 5.93

Greece 19.91 45.54 61.58 9.53

Ireland 33.36 47.24 39.33 7.16

Italy 26.57 31.31 49.10 11.40

Japan 7.27 12.23 54.51 2.52

Luxembourg 42.54 37.56 42.01 11.86

Netherlands 45.55 44.26 34.79 9.29

Norway 63.45 30.54 37.56 4.99

Portugal 22.87 46.59 38.38 15.81

Puerto Rico 25.08 48.84 24.01 12.45

Qatar 63.38 60.94 25.54 50.36

Singapore 16.71 21.35 39.40 9.44

Slovakia 23.50 54.40 35.96 15.14

Slovenia 17.25 48.60 29.00 11.36

Spain 22.61 48.13 38.03 7.09

Sweden 70.07 36.65 36.53 8.47

Switzerland 43.67 41.59 28.98 7.07

Taiwan 33.47 29.00 37.39 25.56

Trinidad & Tobago 58.62 75.23 16.79 33.91

United Kingdom 40.99 46.44 36.84 6.88

United States 50.85 53.34 29.66 12.08

Average (unweighted) 38.85 42.02 37.79 12.34

* Denominator: age group 18-64 perceiving good opportunities to start a business ** Respondent expects to start a business within three years; denominator: age group 18-64 that is currently not involved in entrepreneurial activity

TABLE A.3 TOTAL EARLY-STAGE ENTREPRENEURIAL ACTIVITY (TEA) IN THE GEM ECONOMIES IN 2014, BY STAGES OF ECONOMIC DEVELOPMENT (% OF POPULATION AGED 18-64)

Stages of economic development and economies

Nascent entrepreneur-

ship rate

New business ownership

rate

Early-stage entrepreneurial activity (TEA)

Established business

ownership rate

Discontinuation of businesses

Stage 1: factor-driven (includes countries in transition to stage 2)

Angola 9.52 12.36 21.50 6.50 15.12

Bolivia 21.51 7.07 27.40 7.59 6.89

Botswana 23.13 11.13 32.79 4.95 15.09

Burkina Faso 12.72 9.75 21.71 17.68 10.80

Cameroon 26.35 13.70 37.37 11.50 17.70

India 4.12 2.54 6.60 3.73 1.17

Iran 7.52 8.68 16.02 10.92 5.73

Philippines 8.16 10.52 18.38 6.16 12.55

Uganda 8.92 28.13 35.53 35.94 21.17

Vietnam 2.00 13.30 15.30 22.15 3.55

Average (unweighted) 12.40 11.72 23.26 12.71 10.98

Stage 2:

driven (includes countries in transition to stage 3)

Argentina 9.47 5.21 14.41 9.09 4.92

Barbados 8.48 4.23 12.71 7.09 3.68

Belize 4.25 3.02 7.14 3.74 4.69

Bosnia and Herzegovina 4.48 2.94 7.42 6.67 4.47

Brazil 3.66 13.79 17.23 17.51 4.14

Chile 16.61 11.05 26.83 8.79 8.32

China 5.45 10.17 15.53 11.59 1.45

Colombia 12.39 6.66 18.55 4.86 5.65

Costa Rica 7.58 3.74 11.33 2.53 4.86

Croatia 5.95 2.02 7.97 3.61 3.84

Ecuador 24.54 9.92 32.61 17.67 8.13

El Salvador 11.37 8.74 19.48 12.73 10.77

Georgia 4.10 3.23 7.22 7.28 2.50

Guatemala 11.98 9.19 20.39 7.36 4.43

Hungary 5.56 3.87 9.33 7.95 3.10

Indonesia 4.38 10.12 14.20 11.90 4.18

Jamaica 7.94 11.90 19.27 14.44 6.27

Kazakhstan 8.10 6.19 13.72 7.43 2.95

Kosovo 2.46 1.79 4.03 2.06 6.63

Lithuania 6.07 5.34 11.32 7.84 2.91

Malaysia 1.36 4.55 5.91 8.46 2.01

Mexico 12.66 6.39 18.99 4.48 5.56

Panama 13.12 4.09 17.06 3.44 4.47

Peru 23.10 7.32 28.81 9.24 8.03

Poland 5.77 3.58 9.21 7.30 4.17

Romania 5.33 6.17 11.35 7.60 3.19

Russia 2.39 2.35 4.69 3.95 1.18

South Africa 3.87 3.20 6.97 2.68 3.89

Suriname 1.93 0.17 2.10 5.17 0.21

Thailand 7.63 16.73 23.30 33.06 4.16

Uruguay 10.51 5.75 16.08 6.74 4.39

Average (unweighted) 8.15 6.24 14.04 8.52 4.49

90 91

Stages of economic development and economies

Nascent entrepreneur-

ship rate

New business ownership

rate

Early-stage entrepreneurial activity (TEA)

Established business

ownership rate

Discontinuation of businesses

Stage 3: innovation–driven

Australia 7.65 5.69 13.14 9.80 3.88

Austria 5.80 3.06 8.71 9.86 2.72

Belgium 2.93 2.55 5.40 3.54 2.27

Canada 7.93 5.61 13.04 9.35 4.16

Denmark 3.07 2.49 5.47 5.09 2.24

Estonia 6.34 3.54 9.43 5.70 2.02

Finland 3.45 2.29 5.63 6.60 2.32

France 3.69 1.71 5.34 2.94 1.75

Germany 3.05 2.25 5.27 5.15 1.67

Greece 4.58 3.37 7.85 12.84 2.83

Ireland 4.36 2.46 6.53 9.91 1.89

Italy 3.18 1.28 4.42 4.27 2.13

Japan 2.71 1.26 3.83 7.18 1.08

Luxembourg 4.94 2.33 7.14 3.70 2.58

Netherlands 5.15 4.53 9.46 9.59 1.76

Norway 2.75 2.95 5.65 5.35 1.85

Portugal 5.83 4.40 9.97 7.58 2.98

Puerto Rico 8.80 1.29 10.04 1.27 3.61

Qatar 11.32 5.39 16.38 3.54 4.84

Singapore 6.36 4.82 10.96 2.88 2.39

Slovakia 6.70 4.35 10.90 7.80 5.16

Slovenia 3.78 2.66 6.33 4.76 1.48

Spain 3.33 2.21 5.47 7.03 1.91

Sweden 4.86 1.90 6.71 6.46 2.09

Switzerland 3.38 3.81 7.12 9.10 1.50

Taiwan 4.41 4.13 8.49 12.19 5.12Trinidad & Tobago 7.47 7.44 14.62 8.48 2.79

United Kingdom 6.28 4.48 10.66 6.50 1.86

United States 9.67 4.25 13.81 6.95 4.02

Average (unweighted) 5.30 3.40 8.54 6.74 2.65

TABLE A.4 MOTIVATION FOR EARLY-STAGE ENTREPRENEURIAL ACTIVITY IN THE GEM ECONOMIES IN 2014, BY STAGES OF ECONOMIC DEVELOPMENT (% OF POPULATION AGED 18-64)

Stages of development and economies

Early-stage entrepreneurial activity (TEA)

Necessity-driven (% of TEA)

Opportunity-driven (% of

TEA)

Improvement-driven

opportunity (% of TEA)

Motivational index

Stage 1: factor-driven (includes countries in transition to stage 2)

Angola 21.50 24.45 72.14 43.41 1.78

Bolivia 27.40 22.84 76.66 51.70 2.26

Botswana 32.79 30.25 67.21 54.71 1.81

Burkina Faso 21.71 22.27 75.25 52.84 2.37

Cameroon 37.37 33.46 59.23 40.51 1.21

India 6.60 31.71 59.97 36.54 1.15

Iran 16.02 38.69 60.56 49.58 1.28

Philippines 18.38 29.36 70.53 33.49 1.14

Uganda 35.53 18.88 80.84 54.25 2.87

Vietnam 15.30 29.74 70.26 53.27 1.79

Average (unweighted) 23.26 28.16 69.27 47.03 1.67

Stage 2:

driven (includes countries in transition to stage 3)

Argentina 14.41 28.03 67.77 43.51 1.55

Barbados 12.71 14.56 73.83 53.13 3.65

Belize 7.14 13.07 82.94 47.61 3.64

Bosnia and Herzegovina 7.42 50.83 48.45 25.16 0.49

Brazil 17.23 28.95 70.60 57.81 2.00

Chile 26.83 17.63 80.99 62.18 3.53

China 15.53 33.22 65.72 45.41 1.37

Colombia 18.55 33.33 66.04 51.55 1.55

Costa Rica 11.33 19.31 79.40 63.52 3.29

Croatia 7.97 46.57 51.29 28.67 0.62

Ecuador 32.61 29.43 70.07 34.95 1.19

El Salvador 19.48 31.95 67.82 54.48 1.71

Georgia 7.22 48.59 50.57 30.95 0.64

Guatemala 20.39 40.62 59.16 38.93 0.96

Hungary 9.33 33.19 64.72 36.27 1.09

Indonesia 14.20 20.52 78.57 37.95 1.85

Jamaica 19.27 32.09 65.57 33.51 1.04

Kazakhstan 13.72 26.39 69.10 33.68 1.28

Kosovo 4.03 22.01 59.90 29.13 1.32

Lithuania 11.32 19.61 79.56 43.78 2.23

Malaysia 5.91 17.54 82.46 63.99 3.65

Mexico 18.99 22.46 76.26 50.04 2.23

Panama 17.06 26.32 73.10 60.23 2.29

Peru 28.81 16.39 82.53 58.90 3.59

Poland 9.21 36.75 59.17 47.11 1.28

Romania 11.35 28.94 70.14 49.75 1.72

Russia 4.69 39.02 58.70 41.56 1.07

South Africa 6.97 28.19 71.27 35.49 1.26

Suriname 2.10 5.42 73.16 39.83 7.34

Thailand 23.30 17.81 80.94 71.23 4.00

Uruguay 16.08 15.96 82.36 27.28 1.71

Average (unweighted) 14.04 27.25 69.75 45.08 1.65

92 93

Stages of development and economies

Early-stage entrepreneurial activity (TEA)

Necessity-driven (% of TEA)

Opportunity-driven (% of

TEA)

Improvement-driven

opportunity (% of TEA)

Motivational index

Stage 3: innovation driven

Australia 13.14 17.60 81.50 63.78 3.62

Austria 8.71 10.95 81.69 37.37 3.41

Belgium 5.40 30.67 63.19 43.12 1.41

Canada 13.04 15.67 76.34 63.34 4.04

Denmark 5.47 5.43 91.06 60.15 11.09

Estonia 9.43 15.10 74.48 41.15 2.72

Finland 5.63 15.62 81.06 63.12 4.04

France 5.34 16.06 82.00 69.15 4.31

Germany 5.27 23.18 75.75 53.74 2.32

Greece 7.85 34.77 61.47 30.53 0.88

Ireland 6.53 29.65 68.35 48.56 1.64

Italy 4.42 13.59 78.41 38.58 2.84

Japan 3.83 18.82 76.15 68.24 3.63

Luxembourg 7.14 11.81 85.37 59.81 5.06

Netherlands 9.46 15.67 80.41 62.77 4.01

Norway 5.65 3.54 86.73 69.03 19.50

Portugal 9.97 27.37 71.33 49.31 1.80

Puerto Rico 10.04 20.50 79.05 51.08 2.49

Qatar 16.38 21.53 77.13 54.37 2.53

Singapore 10.96 11.40 84.28 70.81 6.21

Slovakia 10.90 32.57 64.22 51.83 1.59

Slovenia 6.33 25.46 71.40 44.78 1.76

Spain 5.47 29.79 66.05 33.48 1.12

Sweden 6.71 7.91 84.16 56.16 7.10

Switzerland 7.12 14.35 74.88 58.14 4.05

Taiwan 8.49 13.26 86.74 66.04 4.98

Trinidad & Tobago 14.62 12.01 86.45 64.26 5.35

United Kingdom 10.66 12.90 83.57 52.71 4.09

United States 13.81 13.50 81.53 66.93 4.96

Average (unweighted) 8.54 17.96 77.75 54.91 3.06

TABLE A.5 GENDER DISTRIBUTION OF EARLY-STAGE ENTREPRENEURS (TEA) & NECESSITY VS OPPORTUNITY ENTREPRENEURSHIP BY GEOGRAPHIC REGION, 2014

Regions and GEM economies

MALE TEA (% of adult male population)

FEMALE TEA (% of

adult female population)

MALE TEA Opportunity (% of TEA

males)

FEMALE TEA Opportunity (% of TEA females)

MALE TEA Necessity

(% of TEA males)

FEMALE TEA

Necessity (% of TEA females)

Africa

Angola 22.79 20.37 73.91 70.39 21.77 27.09

Botswana 34.79 30.93 72.22 61.96 24.52 36.25

Burkina Faso 25.39 18.71 84.73 64.72 12.65 32.94

Cameroon 40.94 34.10 65.53 52.29 27.63 39.89

South Africa 7.72 6.29 71.38 71.16 28.62 27.70

Uganda 33.73 37.15 84.55 77.82 15.20 21.89

Average (unweighted) 27.56 24.59 75.39 66.39 21.73 30.96

Asia & Oceania

Australia 15.97 10.32 81.86 80.93 18.14 16.77

China 16.83 14.18 69.58 60.95 29.39 37.95

India 8.52 4.58 56.51 66.70 33.04 29.13

Indonesia 13.23 15.16 80.56 76.85 18.28 22.45

Iran 21.45 10.47 59.38 63.04 39.77 36.43

Japan 6.12 1.50 76.41 75.06 17.34 24.94

Kazakhstan 14.34 13.17 71.13 67.12 26.06 26.71

Malaysia 5.10 6.78 86.16 79.47 13.84 20.53

Philippines 15.85 20.78 83.93 60.78 15.79 39.22

Qatar 19.29 10.32 75.50 83.43 23.02 15.75

Singapore 14.83 7.17 85.53 81.76 11.38 11.44

Taiwan 10.15 6.83 87.84 85.10 12.16 14.90

Thailand 24.53 22.12 81.53 80.31 17.12 18.56

Vietnam 15.13 15.47 71.14 69.43 28.86 30.57

Average (unweighted) 14.38 11.35 76.22 73.64 21.73 24.67

Latin America & Caribbean

Argentina 17.84 11.22 73.88 58.76 22.00 36.93

Barbados 14.33 11.23 74.40 73.15 12.74 16.69

Belize 7.81 6.45 83.94 81.70 11.14 15.46

Bolivia 29.89 24.98 81.05 71.59 18.80 27.51

Brazil 17.01 17.45 78.88 62.71 21.06 36.47

Chile 30.10 23.68 88.64 71.65 9.89 27.08

Colombia 22.78 14.57 70.55 59.42 28.91 39.83

Costa Rica 11.66 11.02 84.35 74.58 13.04 25.42

Ecuador 33.04 32.18 73.33 66.78 26.33 32.55

El Salvador 19.26 19.69 69.39 66.44 30.61 33.13

Guatemala 24.43 16.85 61.85 55.74 37.75 44.26

Jamaica 21.26 17.34 70.31 59.94 26.10 39.21

Mexico 19.74 18.31 78.74 73.80 20.26 24.64

Panama 17.98 16.14 75.56 70.37 23.89 29.01

Peru 29.65 28.00 86.07 78.90 12.63 20.24

Puerto Rico 11.13 9.05 79.64 78.39 19.51 21.61

Suriname 2.67 1.54 79.77 61.68 3.90 8.06

Trinidad & Tobago 16.08 13.16 87.08 85.69 10.77 13.52Uruguay 19.17 13.23 86.45 76.91 11.29 22.20

Average (unweighted) 19.25 16.11 78.10 69.90 18.98 27.04

94 95

Regions and GEM economies

MALE TEA (% of adult male population)

FEMALE TEA (% of

adult female population)

MALE TEA Opportunity (% of TEA

males)

FEMALE TEA Opportunity (% of TEA females)

MALE TEA Necessity

(% of TEA males)

FEMALE TEA

Necessity (% of TEA females)

European Union

Austria 10.38 7.06 82.48 80.54 11.31 10.43

Belgium 7.65 3.14 66.41 55.29 29.38 33.83

Croatia 11.28 4.75 52.11 49.38 46.27 47.24

Denmark 7.12 3.79 91.72 89.81 5.64 5.02

Estonia 11.21 7.71 75.89 72.50 13.39 17.50

Finland 6.63 4.63 82.55 78.90 14.54 17.20

France 6.68 4.03 87.25 73.50 11.42 23.57

Germany 6.54 3.97 77.58 72.67 20.99 26.88

Greece 9.89 5.81 67.13 51.82 30.01 42.90

Hungary 13.48 5.29 67.73 57.25 29.34 42.75

Ireland 8.87 4.23 73.12 58.47 26.01 37.20

Italy 5.71 3.15 75.72 83.21 16.38 8.62

Lithuania 16.19 6.78 82.81 72.31 16.59 26.35

Luxembourg 8.89 5.32 85.87 84.49 11.97 11.55

Netherlands 11.62 7.27 79.69 81.58 16.61 14.15

Poland 12.50 5.95 59.33 58.82 36.09 38.14

Portugal 11.68 8.36 74.69 66.92 23.95 31.89

Romania 16.02 6.57 70.40 69.94 28.30 30.06

Slovakia 14.37 7.41 64.58 63.51 31.94 33.78

Slovenia 8.29 4.25 76.21 61.48 22.62 31.31

Spain 6.36 4.57 69.61 61.03 26.13 34.95

Sweden 9.54 3.79 85.62 80.35 6.61 11.30

United Kingdom 13.82 7.53 83.24 84.17 14.91 9.27

Average (unweighted) 10.21 5.45 75.29 69.91 21.32 25.47

Non-European Union

Bosnia and Herzegovina

10.60 4.25 52.45 38.51 47.55 58.98

Georgia 8.05 6.47 54.39 46.33 45.61 51.90

Kosovo 4.78 3.30 65.45 51.94 23.00 20.60

Norway 7.29 4.00 89.04 82.50 0.00 10.00

Russia 5.77 3.70 60.37 56.34 37.66 40.93

Switzerland 7.03 7.20 79.85 69.93 10.97 17.72

Average (unweighted) 7.25 4.82 66.93 57.59 27.46 33.35

North America

Canada 16.23 9.93 80.12 70.35 13.17 19.62

United States 16.53 11.20 83.85 78.24 11.70 16.04

Average (unweighted) 16.38 10.56 81.98 74.29 12.44 17.83

TABLE A.6 JOB GROWTH EXPECTATIONS OF EARLY-STAGE ENTREPRENEURS, BY GEOGRAPHIC REGIONS, 2014

Region

0 - 5 jobs (% Job growth as percent of TEA)

6 - 19 jobs (% Job growth as percent of TEA)

20 or more jobs (% Job growth as percent of TEA)

Africa

Angola 19.9745 19.0553 4.6167

Botswana 51.5733 22.6880 13.2531

Burkina Faso 78.1843 14.8016 4.8959

Cameroon 51.6667 13.2051 6.4103

South Africa 59.5562 15.8585 11.8989

Uganda 89.4537 8.3985 2.1478

Total 60.9558 15.2563 6.7452

Asia & Oceania

Australia 62.3103 17.3700 11.6336

China 57.5163 17.7623 6.5211

India 50.7525 6.1843 3.6226

Indonesia 46.5040 4.6515 1.2209

Iran 61.7290 16.5539 12.5526

Japan 48.9703 15.4563 17.6446

Kazakhstan 27.4306 16.3194 14.9306

Malaysia 88.6119 11.3881 0.0000

Philippines 88.2003 5.5894 1.7460

Qatar 49.2733 21.5295 23.0624

Singapore 41.7300 23.1652 19.3656

Taiwan 32.5510 26.6817 27.2589

Thailand 80.1591 7.7485 1.1379

Vietnam 82.0261 12.4183 4.2484

Total 58.2713 13.7151 9.4793

Latin America & Caribbean

Argentina 57.5868 16.9587 8.8884

Barbados 42.0738 9.7559 3.8324

Belize 48.7125 16.4751 4.6934

Bolivia 71.0153 14.0964 6.2997

Brazil 76.4712 8.7371 2.3236

Chile 44.7210 27.2629 15.9513

Colombia 33.0785 33.8740 28.1126

Costa Rica 72.1030 10.7296 7.7253

Ecuador 75.2508 7.3579 2.6756

El Salvador 59.3225 5.9044 .7613

Guatemala 33.2627 5.4477 2.2893

Jamaica 63.3394 8.8170 2.3490

Mexico 49.2371 11.8219 1.4823

Panama 82.4561 4.3860 2.6316

Peru 70.1012 7.8437 3.4453

Puerto Rico 76.8487 7.6190 1.7231

Suriname 69.8612 5.0795 2.4765

Trinidad & Tobago 53.2118 21.5812 11.3313

Uruguay 46.7984 20.8839 15.7216

Total 59.7557 14.3669 7.4869

96 97

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0 - 5 jobs (% Job growth as percent of TEA)

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20 or more jobs (% Job growth as percent of TEA)

European Union

Austria 58.2940 9.4975 5.3409

Belgium 77.5859 8.0121 8.8663

Croatia 25.1117 25.7157 14.7890

Denmark 66.3637 16.2707 5.5667

Estonia 58.8542 15.6250 6.7708

Finland 78.3699 4.1054 11.5933

France 56.5491 16.8722 13.9415

Germany 62.7588 14.6094 12.8213

Greece 55.5904 8.7935 3.2269

Hungary 47.7861 22.0618 19.2562

Ireland 56.2786 22.1330 12.0431

Italy 64.7345 8.8834 5.2772

Lithuania 42.5624 22.0987 12.2205

Luxembourg 44.8832 24.1776 4.3688

Netherlands 66.6019 12.7951 6.7042

Poland 47.8570 14.2982 13.3528

Portugal 41.6339 14.2402 8.7855

Romania 31.0804 26.6710 20.4987

Slovakia 40.3670 16.5138 17.8899

Slovenia 51.2287 15.5578 13.0175

Spain 58.9647 14.8983 4.3886

Sweden 63.3664 9.5433 11.9819

United Kingdom 54.8526 12.2802 11.7354

Total 54.2885 15.5197 9.2522

Non-European Union

Bosnia and Herzegovina 53.3516 23.1429 9.7347

Georgia 43.3364 15.0020 6.6400

Kosovo 18.2147 17.4221 1.3904

Norway 75.2212 9.7345 5.3097

Russia 41.7038 14.1938 9.7918

Switzerland 67.0138 15.4065 4.8990

Total 52.6207 16.1384 6.6334

North America

Canada 52.5910 17.3058 14.0210

United States 48.5136 18.3282 20.9520

Total 50.1598 17.9154 18.1538

APPENDIX 2 CHARACTERISTICS OF GEM APS SURVEYS, IN 2014

Team Interview procedureS ample size

Argentina Fixed Line Telephone 2500

Australia Mobile Telephone 2177

Austria Fixed Line and Mobile Telephone 4586

Barbados Face-to-face and Fixed Line Telephone 2000

Belgium Fixed Line and Mobile Telephone 2004

Belize Face-to-face Interviews 2084

Bosnia-Herzegovina Fixed Line Telephone 2590

Bolivia Face-to-face Interviews 2015

Botswana Face-to-face Interviews 2156

Brazil Face-to-face Interviews 10000

Burkina Faso Face-to-face Interviews 2850

Cameroon Face-to-face Interviews 2087

Canada Fixed Line and Mobile Telephone 2479

Chile Face-to-face and Fixed Line and Mobile Telephone 6212

China Face-to-face Interviews 3647

Colombia Face-to-face and Fixed Line Telephone 3691

Costa Rica Face-to-face Interviews 2057

Croatia Fixed Line Telephone 2000

Denmark Mobile Telephone 2008

Ecuador Face-to-face Interviews 2040

El Salvador Face-to-face Interviews 2014

Estonia Fixed Line and Mobile Telephone 2357

Finland Mobile Telephone 2005

France Fixed Line Telephone 2005

Georgia Face-to-face Interviews 2016

Germany Fixed Line and Mobile Telephone 4311

Greece Fixed Line Telephone 2000

Guatemala Face-to-face Interviews 2158

Hungary Mobile Telephone 2003

India Face-to-face Interviews 3360

Indonesia Face-to-face Interviews 5520

Iran Face-to-face Interviews 3352

Ireland Fixed Line and Mobile Telephone 2000

Italy Fixed Line Telephone 2000

Jamaica Face-to-face Interviews 2637

Japan Fixed Line Telephone 2006

98 99

Team Interview procedure Sample size

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Kuwait Mobile Telephone 2000

Lithuania Fixed Line and Mobile Telephone 2 000

Luxembourg Fixed Line Telephone and Online2 074

Malaysia Face-to-face Interviews 2000

Mexico Face-to-face Interviews 2587

Netherlands Fixed Line and Mobile Telephone 2 260

Norway Fixed Line and Mobile Telephone 2 000

Panama Face-to-face Interviews 2005

Peru Face-to-face Interviews 2078

Philippines Face-to-face Interviews 2000

Poland Fixed Line and Mobile Telephone 2 001

Portugal Fixed Line and Mobile Telephone 2 005

Puerto Rico Face-to-face Interviews 2000

Qatar Mobile Telephone 4272

Romania Fixed Line and Mobile Telephone 2 001

Russia Face-to-face Interviews 2001

Singapore Fixed Line Telephone 2006

Slovakia Mobile Telephone 2000

Slovenia Fixed Line and Mobile Telephone 2 004

South Africa Face-to-face Interviews 3789

Spain Fixed Line Telephone 25000

Suriname Face-to-face Interviews 2200

Sweden Fixed Line and Mobile Telephone and Online2 508

Switzerland Fixed Line and Mobile Telephone 2 426

Taiwan Fixed Line Telephone 2000

Thailand Face-to-face and Fixed Line Telephone 2059

Trinidad & Tobago Face-to-face Interviews 2004

Uganda Face-to-face Interviews 2112

United Kingdom Fixed Line and Mobile Telephone 2 007

United States Fixed Line and Mobile Telephone 3 273

Uruguay Fixed Line Telephone 2006

Vietnam Face-to-face Interviews 2000

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Siri Roland Xavier is the Associate Professor, Deputy Dean andProgramme Director for Entrepreneurship at Bank Rakyat School ofBusinessandEntrepreneurship,UniversityTunAbdulRazak,Malaysia.He is theNationalTeamleader forGEMandmemberofSTEPfamilybusiness research (since 2009). He is also a board member of theGlobalEntrepreneurshipResearchAssociation,memberoftheGlobalConsortium for Entrepreneurship Educators, Editorial BoardMemberof the Journal ofGlobalEntrepreneurshipResearchandReviewerofEmeraldEmergingMarketsCaseStudies.Prior to academiahewasanentrepreneurandbusinessconsultanttoSMEs.HeholdsanLL.B(Hons), University of London, M.B.A. and a Doctorate in BusinessAdministration (Entrepreneurship) from the University of Newcastle,Australia. His research interests include Corporate Entrepreneurship,NewVentureDevelopmentandNationalEntrepreneurshipDevelopment.

Penny KewhasanMSc inComparativeandInternationalEducationfromOxfordUniversity.Shehasbeeninvolvedintheareaofeducationandtrainingsince1997.PennyhasbeeninvolvedinanumberoftheSouthAfricanGEMreports.Shewasprincipalresearcherandauthoronthe2008,2009and2010reports.Sincethenshehasbeeninvolvedonaconsultancyaswellaseditingbasis.

Ulrike Guelich is lecturer and research fellow at the School ofEntrepreneurshipandManagementatBangkokUniversityinThailand.SheisanexternaldoctoralcandidateinEntrepreneurshipattheTechnicalUniversity of Eindhoven (Netherlands) and holds anM.B.A. from theUniversityofMaryland(UnitedStates)andanM.B.A.fromGSBAZurich(Switzerland).UlrikeGuelichjoinedtheGEMThailandteamin2012andcontributedtoseveralnationalreports.Her25yearsofentrepreneurshipexperienceincludeyearsasbusinessownerinamanufacturingfamilybusiness in the 4th generation and leading an IT start-up as supplier to the automotive industry. Ulrike’s research interests evolve aroundwomenentrepreneurship,theuseofentrepreneurialnetworksandtheirinfluenceoninnovationinentrepreneurialactivities.

AUTHORS

Catharina Badra NawangpalupiisGEMIndonesiateamleader.SheisalsoHeadofIndustrialEngineeringDepartmentandaresearchfellowinCentreofExcellenceinSMESmallandMediumEnterpriseDevelopment,Institute of Research and Community Services, Universitas KatolikParahyangan (UNPAR) Bandung, Indonesia. She was a sole traderin service, who offer system evaluation consultation in sustainabilityprojectswhenshewasinAustralia.Shegaveupthebusinesswhenreturning to Indonesia. In Indonesia, she still gives various training infinancialassessment,businessplan&businessmodel,productdesignandqualityimprovement.Catharinaisalsoatrainerforresearchskillsandresearchproposalworkshop.SheisalsotheprincipalauthorforGEMIndonesiaReportin2013and2014.

Aida Licaros-Velasco is an associate professor at De La SalleUniversity, Department of Decision Sciences and Innovation, RamonV.DelRosario,CollegeofBusiness.ShehasheldvariousProfessorialChairs in Entrepreneurship since 2001.She is thePhilippine countryteam leader of the project entitled, “Promoting EntrepreneurshipResearch in South East Asia: Applying Global EntrepreneurshipMonitor”,“Cross-nationalSurveyonUniversityandResearchCouncilRolesonSoutheastAsia Inclusivedevelopmentand Innovation” and“CityInnovationinSouthEastAsia”fundedbyIDRC.ShehasearnedherDoctorofBusinessManagement,MastersinBusinessAdministration,andBachelorofScience in IndustrialManagementEngineeringminorinChemicalEngineeringatDeLaSalleUniversity,Manila.ShedidherpostdoctoralstudiesinTechnologyManagementandInnovationattheUniversityofSussex,EnglandandwasaresearchexchangescientistonergonomicsatChibaUniversity,Japanin1988.