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 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.
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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."
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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.
Ends