Flemish lack of entrepreneurial spirit is culturally determined
Results of the 2015 Global Entrepreneurship Monitor
In Flanders, one in ten people plans to start a new company in the next three years. This is a record number in comparison to 15 years ago. The flip side is that people are doing this primarily out of necessity, because they have no other choice. The virtually unbridgeable gap between an opportunity and an actual start-up experienced by the majority of Flemings can largely be attributed to a fear of failure and a lack of confidence in their own ability. ‘Fifteen years of research into entrepreneurship has shown that these obstacles are structural,’ says researcher Tine Holvoet. ‘We have, however, also noticed that the lack of entrepreneurial spirit is culturally determined among the Flemish. Although Flemings agree that starting your own business may be a good career decision, successful entrepreneurs are hardly put on a pedestal in this country. We need a more positive entrepreneurial culture in Flanders.’
Vlerick Business School is publishing the conclusions of the 15th edition of the Global Entrepreneurship Monitor (GEM) today. This is an annually conducted study into entrepreneurial spirit among the world population. In Flanders, the necessary research was commissioned by the Flemish government, and was carried out by Prof. Hans Crijns and researchers Tine Holvoet and Dr Niels Bosma.
Making concrete use of opportunities
48% of all Flemish respondents have identified sufficient opportunities for setting up a business in the next six months. In addition to this, 10% have indicated that they actually intend to grasp this opportunity in the next three years. However, none of these respondents are currently actively engaged in starting up their own business.
‘In 2002, only 3% of all Flemings were thinking about starting up their own business. This means that we have come a long way in the past 15 years,’ concludes researcher Tine Holvoet. Nevertheless, we should temper that optimism a little, because in practice the figures are much lower. Concretely speaking, the number of people who have just started their own business, or are actively involved in establishing one, is only 5.4%. ‘Although this is the highest score obtained in 15 years of research and the results confirm a rising trend over the past five years, it still remains well below the European average. Only Germany and Italy score lower.’
An explanation for this can be found in the fact that many start-ups are still born out of necessity rather than choice. In comparison to Belgium’s innovation-driven neighbouring economies (16%), 43% of the Flemings who have actually started their own business have only chosen this career path due to a distinct lack of employment alternatives. This is the highest figure in the whole of Europe. ‘This conclusion is reinforced by the fact that the number of Flemings planning to start their own business rises during years of financial crisis and drops when the economy improves,’ says Tine Holvoet. ‘This high percentage of entrepreneurs by necessity also has a flip side. The golden cage of employment also causes many people to be trapped within the comfort of their existing situation, and prevents them from embarking on a career as an entrepreneur when they discover an opportunity. On the other hand, Flanders scores relatively highly in the field of intrapreneurship. The Flemish apparently prefer to lay their entrepreneurial egg within the safe confines of an existing company.’
Investing in a positive entrepreneurial culture
The study conducted in 2015 confirms that self-perception remains a structural deterrent with regard to entrepreneurship. Only three out of ten Flemings are confident that they have sufficient knowledge and competencies to start a business of their own. This score is so low that it has made us stand out internationally, certainly with regard to self-confidence among Flemish women. One out of two respondents that nevertheless identify ample opportunities are prevented from taking concrete action due to a fear of failure.
In addition, the social prominence and attractiveness of entrepreneurship are also key factors that determine the entrepreneurial climate. Although half the Flemish population (54%) consider entrepreneurship to be a good career choice, 57% do not confer a high status on successful entrepreneurs. Only half (54%) are of the opinion that sufficient media attention is paid to the success stories behind new businesses and entrepreneurs. In comparison to the reference countries, successful entrepreneurship is structurally not held in high esteem in Flanders.
‘Based on 15 years of GEM research we can clearly conclude that we need to promote a more positive entrepreneurial culture,’ confirms Tine Holvoet. ‘It would be a good idea to start at primary and secondary school level by addressing such aspects as fear of failure, responding proactively and taking the initiative. There has, however, been a positive change in mentality in government policy. In 2015, we were able to rank highest among 62 countries with regard to government focus on and support for entrepreneurship.’
The percentage of new entrepreneurs that expect to create at least five jobs over the next five years is around 1%. This puts Flanders among the lowest scoring regions. The focus on innovation – Flanders scores just a little below average on this point – is also limited here.
Tine Holvoet: ‘Where politicians and civil society often refer to the importance of entrepreneurship for our country’s economic growth, we have seen that the ambitions of starting entrepreneurs with regard to job creation and innovation are relatively limited. However, Flemings are among the most internationally oriented people in Europe. Our small and open economy, in combination with the Brussels effect, stimulates entrepreneurship. Nevertheless, we need to ensure that international commerce is not limited to our neighbouring countries. More media attention for international entrepreneurship would be helpful.’
ABOUT THE GLOBAL ENTREPRENEURSHIP MONITOR
In 2015 the GEM study was carried out in Flanders for the 15th time. The study is based on a telephone questionnaire conducted among a representative number of 2,000 randomly chosen respondents between 18 and 64 years of age. For Flanders, this study has been conducted by the Vlerick Business School since 2001.
ABOUT THE SUPPORT CENTRE FOR ENTREPRENEURSHIP AND REGIONAL ECONOMY
The last studies conducted by the Support Centre for Entrepreneurship and Regional Economy (Steunpunt Ondernemen en Regionale Economie, STORE), which advises the Flemish government based on fundamental and applied economic top-class research, focused on three subjects:(i) starting businesses and private capital, (ii) the development and continued growth of SMEs, and (iii) measuring and identifying economic clusters (with particular emphasis on the analysis and implementation of a new industrial policy). In addition, the Support Centre also aims to develop a data bank of regional-economic indicators (the Regional Data Warehouse, or RDW).