Living Entrepreneurship Blog / Babson Entrepreneurs

Demystifying the Global Entrepreneurship Monitor

Dr. Donna Kelley is a professor of entrepreneurship at Babson and serves as the Frederic C. Hamilton Chair of Free Enterprise. Her research in global entrepreneurship has been published in journals including Journal of Business Venturing, Entrepreneurship: Theory & Practice, and Journal of Product Innovation Management. She sat down with me to discuss her extensive work with GEM.

What is GEM?
GEM stands for “Global Entrepreneurship Monitor.” It is a research project that looks at societal attitudes, participation rates, and a range of characteristics about entrepreneurship. We interview a random sample of at least 2,000 adult residents in over 60 economies worldwide each year. The result is a comprehensive profile of entrepreneurship across a range of economies and regions of the world.

In the interviews, we ask people about opportunities for starting businesses in their communities and other perceptions and attitudes about entrepreneurship. If the interviewee identifies as an entrepreneur, we ask more questions, such as why they started their business, what kind of business they run, whether they are offering innovative products or services, the extent they are selling internationally, and whether they intend to hire employees.

Global and national reports are created using the survey data and released annually. Each economy involved with the project has its own academic team to oversee its survey and national report. National reports go into further detail and can compare the entrepreneurial environments with other economies, and in some case, between specific regions within the country. For example, the U.S. report has compared states like California, New York, Florida and Texas. GEM also publishes special topic reports, including entrepreneurship among women, seniors, and youth.

What is the history of GEM?
GEM was co-founded by Babson College and London Business School. We conducted our first survey in 1999 with ten developed economies from Europe, the U.S., and Japan. Since then, GEM has grown to include over 100 economies.

How long have you been involved with GEM and what is your role?
I have worked on GEM for ten years and serve on the global board of directors, which has oversight over GEM. We meet three times a year to discuss how the project is running and future strategies to pursue. I currently lead the United States GEM team. My main responsibilities include making major decisions and coordinating the writing of the U.S. GEM report. Marcia Cole, who has been involved with GEM for over ten years, handles the administrative aspects of the project. Professor Mahdi Majbouri, our technical director, handles all the technical details and statistical analyses.

Why was GEM created?
There were many data sources on the environment for business in certain countries, including WEF’s Global Competitiveness Index and the World Bank’s Ease of Doing Business Index. Although we had data on the environment, we didn’t have much information on the entrepreneurs. While national governments have business registration data, 90% of the businesses in some countries are not formally registered, particularly in countries in early stages of economic development. Researchers relied on business registrations to learn about the business environment of certain locations, but because not all businesses are registered, they did not have the most accurate data. GEM gives us a more realistic view of entrepreneurship in an area.

Additionally, before GEM, it was difficult to compare entrepreneurship between countries because each country used different metrics and definitions of entrepreneurship. For example, some would consider self-employment to be entrepreneurship and others would not. GEM’s central protocol allows us to make accurate inter-country comparisons. We also wanted to know who the entrepreneurs are. Looking just at business registrations, you wouldn’t be able to understand the entrepreneur’s demographics or motivations.

What impact has GEM had on scholarly research?
Close to 400 academic articles have been written using GEM data. We are generating academic research that appears in national and international publications, including Journal of Business Venturing, Administrative Science Quarterly, and Journal of International Business Studies. We are also building the capacity for academics from under-researched areas, such as Africa, Southeast Asia, and Latin America, to publish research on their own countries.

If there was one thing you wanted the world to know about GEM, what would it be?
If you want the most comprehensive and reliable data on entrepreneurs, GEM is where to look.

What does the future of GEM look like?
We want to conduct further research to explain the differences in entrepreneurial ecosystems between countries. We also want to connect our data with other data sources. Our research becomes especially valuable when combined with existing data from different organizations like the World Economic Forum and World Bank.

We are also looking into doing more online surveys to keep up with new technologies. We started out collecting data by calling people via landlines, and then transitioned to calling cell phones as they became more prevalent. Using the Internet for our surveys will give us a more representative sample because so many people globally have Internet access, while many do not have landlines. Using Internet surveys will provide an even more comprehensive view of entrepreneurship in each country and ensure the value of our data.

How can students get involved with GEM?
GEM is a great data source to combine with secondary data for any projects involving statistics and analysis. The reports are especially valuable to review before going on an offshore course to help you understand entrepreneurship and cultural dimensions in a particular area.

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