What does GEM measure?
The two survey components of GEM are distinct but complementary; the resultant data provides an unrivalled insight into the entrepreneurial ecosystem of a country.
What does the GEM Adult Population Survey measure?
Data collected as part of the GEM Adult Population Survey (APS) is used to produce indicators which measure the entrepreneurial activity, attitudes and aspirations of individuals.
The main guiding purpose of GEM is to measure individual involvement in venture creation. This differentiates GEM from other data sets, most of which record firm-level data. Through the wealth of measures GEM tracks, we can understand which types of people are (and are not) participating in entrepreneurship. We capture both those formally registering their businesses and those running informal ones. These unregistered businesses, in fact, can compose as much as 80% of economic activity in developing countries.
People launch businesses for a variety of reasons. They may be led into entrepreneurship out of necessity: the pursuit of self-employment when there are no better options for work. In contrast, their efforts may be powered by the desire to maintain or improve their income, or to increase their independence. GEM therefore assesses the motives of entrepreneurs.
GEM additionally measures aspirations. These aspirations may be evident in innovative products or services or the pursuit of customers beyond national borders. They may also include high-growth ambitions, thereby contributing more markedly to new employment in their economies.
Recognizing that entrepreneurs are driven not only by their own perceptions about starting a business, but the attitudes of those around them, GEM considers the attitudes representing the climate for entrepreneurship in a society. Entrepreneurs need to be willing to take risks and have positive beliefs about the availability of opportunities around them, their ability to start businesses and the value of doing so. At the same time, they need customers who are willing to buy from them, vendors willing to supply them and families and investors ready to support their efforts. Even positive societal perceptions about entrepreneurship may indirectly stimulate this activity.
What does the GEM National Expert Survey measure?
Data collected as part of the GEM National Expert Survey (NES) enables the measurement of factors that impact national entrepreneurial activity - the nine Entrepreneurial Framework Conditions (EFCs). For each of these EFCs, Likert scale items are completed by selected experts; based on these results, factors are constructed that summarize the national perceptions of experts for each EFC.
Finance: The availability of financial resources— equity and debt—for small and medium enterprises (SMEs) (including grants and subsidies)
Government policies: The extent to which taxes or regulations are either size-neutral or encourage SMEs
Government programs: The presence and quality of direct programs to assist new and growing firms at all levels of government (national, regional, municipal)
Entrepreneurial education and training: The extent to which training in creating or managing SMEs is incorporated within the education and training system at all levels (primary, secondary and post-school)
R&D transfer: The extent to which national research and development will lead to new commercial opportunities and is available to SMEs
Commercial and professional infrastructure: The presence of property rights and commercial, accounting, and other legal services and institutions that support or promote SMEs
Entry regulation: Contains two components: (1) Market Dynamics: the level of change in markets from year to year, and (2) Market Openness: the extent to which new firms are free to enter existing markets
Physical infrastructure and services: Ease of access to physical resources—communication, utilities, transportation, land or space—at a price that does not discriminate against SMEs
Cultural and social norms: The extent to which social and cultural norms encourage or allow actions leading to new business methods or activities that can potentially increase personal wealth and income