16 Aug 2017 | 09.05 am
35,000 Startups Since 2013
2016 Global Entrepreneurship Monitor
16 Aug 2017 | 09.05 am
More than 35,000 new startups were added to the total number of businesses in Ireland between 2013 and 2016, according to the Global Entrepreneurship Monitor, and with one in every 23 people in Ireland now a new business owner Ireland compares with the US for enterprise and is ahead of most EU countries.
Enterprise Ireland sponsored the GEM survey, which was authored by Paula Fitzsimons of Fitzsimons Consulting and Dr Colm O’Gorman, Professor of Entrepreneurship, DCU Business School.
EI head of strategy Niall O’Donnellan said: “The latest GEM survey shows strong global ambition amongst nascent entrepreneurs and new business owners, with almost four in five expecting revenues from international customers.
“In 2007, more than 40% of entrepreneurs were focused exclusively on the Irish market. This figure had dropped back to just 20% by last year demonstrating Irish companies increased willingness and ability to do business and operate internationally.”
Levels of enterprise have returned to the heights measured before the crash and recession. Between 2003 to 2007, as many as eight in every 100 people, in the age group of 18 to 64 years, was active as either a nascent entrepreneur or a startup owner.
This reduced to about seven in every 100 during the financial crises (2008 to 2012), growing again to eight in every 100 during the period 2013 to 2015. In 2016, 11 in every 100 people was active as a nascent entrepreneur or a new business owner.
New business owners are people who have started a new business since January 2013, and have paid salaries for at least three months. These entrepreneurs at least part-own and manage the new business.
The survey also focused on ‘intrapreneurs’, a neologism for employees active in the development of new activities for their employer, for example developing or launching new goods or services, setting up a business unit, a new establishment or subsidiary. The results showed that one in 13 employees fit this category, higher than elsewhere in Europe.
Exiting a business is still more likely to happen due to lack of profitability rather than being down to a big buyout — so discontinuing the business is usually the result in that case. Thirty per cent of all exits are attributed to lack of profitability, with family reasons, personal reasons, and finding another job or business opportunity accounting for 49%, and 11% resulting from failure to raise finance.
While numbers of ‘informal investors’ in a business are relatively low here, the amount invested is higher than the European average at €30,000 per investor, and the investor is usually providing the funds for a family member. Business angels account for about 7% of informal investors.
As to gender, Ireland is characterised by a relatively high number of women nascent entrepreneurs and owners of startups. The rate of entrepreneurship for women in Ireland is seventh highest in Europe. At one in every 14 women, the number of female entrepreneurs in 2016 is the highest noted since the GEM research started in 2000.
More key findings of the GEM 2016 survey include:
- Ireland ranks fifth highest in Europe on the TEA Index – the TEA Index consists of two groups of entrepreneurs: nascent entrepreneurs and owners of new startups
- Ireland ranks sixth highest in Europe for new business owners
- Ireland ranks third highest in Europe for intrapreneurs — 1 in 13 employees are active as intrapreneurs, involved in developing or launching new goods or services for their employer
- More than two-thirds (70%) of new business owners expect to be an employer within three and a half years of starting up
- Almost four in ten expect to employ 10 or more people within five years
- The aspiration to become an entrepreneur is highest among those aged 25 to 34 in Ireland
- ‘Fear of failure’ would prevent 4 in every 10 people from starting a business.
Photo: GEM’s Paula Fitzsimons (centre) with (l-r) entrepreneurs Jennie McGinn, Bernice Moran, Ollwyn Moran, Melissa Curry and Elaine Lavery