No. 29




Of Entrepreneurship and Enterprisingness – Global Entrepreneurship Monitor Study in Estonia *

18 June 2014


RiTo No. 29, 2014

  • Kadri Paes

    Faculty of Economics and Business Administration, University of Tartu, GEM analyst

  • Mervi Raudsaar

    Mervi Raudsaar

    Tartu Ülikooli doktorant, majandusteaduskonna ettevõtluse õppetooli juhataja kohusetäitja

  • Tõnis Mets

    Tõnis Mets

    Queenslandi Tehnoloogiaülikooli Marie Curie teadur, Tartu Ülikooli ettevõtluse professor

During recent years, awareness of entrepreneurship as a source of social activeness and precondition for economic welfare in the global economic competition has increased in the Estonian society.

Because of the historical context of Estonia, the terms “entrepreneurship” and “entrepreneur” are often used here in different meaning in comparison to traditional (English) scientific literature. This in turn influences the formation of wider social understanding of entrepreneurship. Today’s approach to entrepreneurship started in the beginning of the 1990s, when it was realised that entrepreneurship is a heterogeneous sphere of activity: there are many entrepreneurs and very many ways for starting as an entrepreneur, and there are different environments where the entrepreneurs operate. More and more attention is being paid to the process of entrepreneurship and wider social context than the person of the entrepreneur. The aim of sustainable entrepreneurship is combining the interests of the entrepreneur and the society.

It is not easy to compare the entrepreneurship and enterprisingness in different countries. All states collect data connected with enterprises, but usually these data are not comparable at the international level. This gap is filled by the Global Entrepreneurship Monitor (GEM), which is an annual global study of entrepreneurship conducted in many countries. Estonia joined it in 2012. The general conception of GEM is based on studying the behaviour of working-age population in regard to starting of entrepreneurial activity, treating entrepreneurship as a process which involves the life cycle of an enterprise. As simple indicators characterising quantity, like the number or percentage of entrepreneurs, are often inadequate for assessing entrepreneurship and entrepreneurial activity, and connecting them with economic growth, GEM also treats several aspects connected with entrepreneurship more specifically. In addition to that, the data of 2012 allow studying social entrepreneurship in Estonia and comparing it to the so-called ordinary entrepreneurship.

Several conclusions can be drawn on the basis of the GEM study that has been conducted in Estonia for two years. The results of GEM help break myths of the low enterprisingness and negative attitude towards entrepreneurs in the Estonian society. In addition to that, entrepreneurship is a phenomenon of civic society and connected with the elements of enterprisingness in the society in a wider context than the different reasons for starting business activity.

The analysis of entrepreneurship showed that the main bottlenecks are in the early phase of entrepreneurship, when the transition from idea to activity takes place, and also in the case of the acting entrepreneurs who are forced to leave business, although it is possible that in certain cases it is not necessary. Thus, those who are about to start entrepreneurship should be encouraged and those who have been active for longer should be instructed how to improve their capabilities. The large gap between entrepreneurial ambitions and aspirations of the early phase and acting entrepreneurs may indicate both the too great optimism of the first and the excessive conservatism of the latter. Therefore the entrepreneurs in different stages of development should be encouraged to cooperate.

The enterprising way of thinking of the population and the formation of the growth ambitions of entrepreneurs are connected with entrepreneurship training and spreading of knowledge in the society. Although the tendency of gender differences in entrepreneurship is decreasing, women and female entrepreneurs still need more support because they feel they have less good entrepreneurship skills than men and more often have fear of failure.

Social entrepreneurship has a wide base in Estonia, it is a resource that can be better used for the improvement of the Estonian society. Therefore more attention should be paid to the supporting system and support structures of social entrepreneurship. However, it is clear that there are no simple solutions and the systemic developing of the long-term strategies for entrepreneurship training, entrepreneurship and innovation can only be based on comprehensive and complex approach.

* Peer reviewed research paper.

Full article in Estonian