3 Releases: NZers Among World's Top Entrepreneurs

MEDIA RELEASE, UNITEC Institute of Technology

New Zealand Ranks Amongst World's Most Entrepreneurial Nations: Global Study

New Zealand is one of the world's most entrepreneurial countries. It ranks second in the world behind Mexico and two percentage points ahead of third-place Australia in the Global Entrepreneurship Monitor (GEM) 2001.

To add to the success, New Zealand has a statistically significant higher rate of total entrepreneurial activity than the United States.

420,000 New Zealanders, or 18.2 per cent of the adult population, can be classified as business entrepreneurs.

At 15.05 per cent, New Zealand has the world's highest rate of 'opportunity entrepreneurship' (people who spot a hot business opportunity and go after it). GEM NZ 2001 estimates that there are 370,000 'opportunity entrepreneurs' in New Zealand.

At 2.84 percent of the population, we have a moderate rate of 'necessity entrepreneurship' (those who create self-employment in response to job loss or redundancy). GEM estimates that there are 70,000 'necessity entrepreneurs' in New Zealand.

Adding honour to success, New Zealand distinguishes itself in other ways as well:

· New Zealand has the world's highest rate of female entrepreneurship, at 43.9 per cent. In the all-important 25-34 year age-group, women entrepreneurs actually outnumber men.

· While the trend around the world is for entrepreneurs to come from the younger age groups, New Zealand has the world's highest percentage of 'senior entrepreneurs' (35-64 years old).

· New Zealand has the world's highest rate of business angel activity. Some 6.2 per cent of New Zealanders have given a median value of $20,000 to a start-up over the past three years.

· GEM NZ 2001 shows total entrepreneurial rates suggesting that Mäori are every bit as entrepreneurial as Pakeha.

GEM is the most comprehensive country-by-country comparison of entrepreneurship in the world. UNITEC's New Zealand Centre for Innovation &Entrepreneurship has carried out the New Zealand portion of the study, the first-ever national survey of entrepreneurship.

Prof. Howard Frederick, principal author of GEM New Zealand 2001 and director of UNITEC's New Zealand Centre for Innovation & Entrepreneurship, says New Zealand's rankings in the GEM study will do remarkable things for our perception of ourselves.

"We have always known that innovation is part of our national culture. Now we know that we are one of the world's most entrepreneurial countries. With a result like this we might finally realise we're 'world class globally' not just 'world famous in New Zealand," he says.

The GEM project began in 1997 as a joint initiative between Babson College in the United States and London Business School. Today, GEM brings together some of the world's best scholars of entrepreneurship and innovation to study the complex relationships between entrepreneurship, economic growth and national prosperity.

UNITEC's New Zealand Centre for Innovation & Entrepreneurship (NZCIE) joined research teams from the world and carried out the New Zealand portion of the study.

A survey was conducted of 2000 adult New Zealanders aged between 18-64 and these results were compared with 28 other countries representing 2.5 billion people (5% error rate). In addition, in-depth entrepreneurship assessment interviews were conducted with 40 Kiwi experts including: entrepreneurs, educators, politicians and business people, with special attention paid to Maori entrepreneurship.

This year's 29 participating countries include: Argentina, Australia, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Hungary, India, Ireland, Israel, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Russia, Singapore, South Africa, South Korea, Spain, Sweden, United Kingdom and United States of America.

Each national GEM team conducts its own independent investigation using exactly the same methods and measures in exactly the same way. This permits direct comparison between New Zealand and the other participating countries. These comparative cross-national data are used to produce the GEM Executive Report as well as a series of individual country reports. GEM New Zealand 2001 is available at www.unitec.ac.nz/gem and has been issued simultaneously with the global GEMExecutive Report summarising all nations' findings, which is available at www.entreworld.org/GEM2001

The entire study was financed by a public-private partnership. The GEM New Zealand sponsors include: the Prime Minister's Science and Industry Advisory Council, Ernst & Young Entrepreneurial Services, Ministry of Economic Development, corporate and commercial lawyers Lowndes Associates, The Tindall Foundation and UNITEC Faculty of Business.

In her foreword to the study, Rt. Hon. Helen Clark, Prime Minister of New Zealand, states: "With this study, we can extend our understanding of ourselves and acknowledge that we also have great talents for entrepreneurial activity, the most vital of ingredients in the commercialisation of new knowledge and innovation. . . . These results are greatly encouraging for our goal of economic transformation and a return to the top half of the OECD ratings by 2011."

For a copy of the GEM New Zealand 2001 report go to: http://www.unitec.ac.nz/gem.

Media Release, Lowndes Associates

Directorship Laws Act As Disincentive To Mentors

Directors' personal liability rules stand in the way of entrepreneurs attracting mentors onto their boards of directors, says Mark Lowndes of Lowndes Associates.

Entrepreneurs were blessed with self-belief, ingenuity and a 'can-do' attitude but they often needed experienced mentors to guide them through normal business hurdles, he said. However the current laws created an environment of personal risk which could deprive entrepreneurs of the mentors that would give their business stability, and discouraged skilled directors from staying on the board of a company going through a difficult time.

"If New Zealand wants to promote an entrepreneurial culture we should carefully examine the duties of directors so that they are not instantly personally liable when things go wrong. We need a balance between the legitimate protection of creditors and the need for directors to take reasonable and calculated risks."

For example the directors of Air New Zealand were under huge pressure from almost all stakeholders to find a solution to save the airline, which eventually they did - but at considerable personal risk.

Entrepreneurial businesses by their very nature carried a certain amount of risk. With that risk came the possibility of great success and admiration from peers. However when business ventures failed, New Zealanders could be quick to criticise and blame, Lowndes said.

"We can be too judgmental of those who take risks that don't come off. We need to examine our attitudes to business failure because not all entrepreneurial ventures succeed. A culture of entrepreneurship leads inevitably to a certain amount of business failure. Risk implies a lack of certainty and business failure does not always mean there has been a bad judgment."

The GEM research highlighted a culture that penalised failed entrepreneurs, valued foreign models above local ones and was suspicious of those prepared to give it a go. Entrepreneurs needed access to adequate funding, professional services and mentoring but they also needed an environment in which entrepreneurship is respected and supported.

The report's findings and the on-going research into entrepreneurship will help to change entrenched attitudes, Lowndes said.

"As a corporate and commercial law firm, Lowndes Associates applauds those who 'give it a go.' We should consider, as a community, whether we provide entrepreneurs with all the support they deserve so that, as a country, we can all benefit from their success."

MEDIA RELEASE, Ministry of Economic Development

GEM Sheds Light On New Zealand Entrepreneurs

Ministry of Economic Development chief executive Geoff Dangerfield has welcomed today's launch of a major survey of business behaviour, part sponsored by the Ministry. The survey, Global Entrepreneurship Monitor (GEM) 2001, is the most comprehensive study of entrepreneurship and examines the relationship between entrepreneurship, economic development and national prosperity.

2001 marks New Zealand's first involvement in the study and Geoff Dangerfield says the results are going to be a useful input into policy.

"GEM is a high quality research exercise that picks apart some of the basic drivers of economic success. The approach taken enables direct comparisons to be made on a country by country basis. For us, as the government's principal advisor on enterprise development policy, this was a natural fit with our core business," Geoff Dangerfield said.

"Participating in studies of this calibre gives us valuable insights into our own, and other countries' economies. The Ministry will benefit from access to comparative data allowing cross-country benchmarking, which will provide further insights into the interface between competitiveness, entrepreneurship, innovation and best practice."

GEM New Zealand 2001 ranks New Zealand as the world's second most entrepreneurial economy, ahead of Australia and with a higher level of entrepreneurial activity than the world's largest economy, the United States. Geoff Dangerfield says the challenge - for policy makers and business - is to create a culture that allows that obvious energy and initiative to flourish in a global context.

"The New Zealand economy faces particular challenges of distance from key markets and size. Our economic landscape is dominated by small but very dynamic firms. GEM 2001's results reinforce their significance but they also highlight a number of areas where governments can do more work, focussing on the factors that will enable them to meet those challenges and grow into larger businesses capable of excelling globally.

"The Ministry, in partnership with Industry New Zealand, business and regions, is actively pursuing these avenues. We will continue to celebrate our entrepreneurs' successes at the same time as we provide advice on removing barriers to growth by improving the regulatory environment; developing our infrastructure; enabling access to overseas markets; access to skills and expertise, finance, innovation and new technologies, and facilitating strategic partnerships across and within regions and industries," Geoff Dangerfield said.

Geoff Dangerfield congratulated the study's authors, saying their work complemented MED's research programme. In particular, he said, it sat well alongside a major research project, The Interface between Entrepeneurship and Innovation - a New Zealand Small and Medium Enterprise Perspective. Preliminary findings of this project were presented at a major international economists' conference in Denmark earlier this year. A final report will be published early in 2002.

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