Amway Global Entrepreneurship Report 2013

8/12/2019 Amway Global Entrepreneurship Report 2013

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Amway Global Entrepreneurship Report 2013

Amway GlobalEntrepreneurshipReport 2013Encouraging Entrepreneurs Eliminating the Fear of Failure


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SURVEY DESIGNFieldwork: 8th March 19th May 2013Sample: 26,009 respondents women and men aged 14+

(representative target groups of the countries populations)Countries: 24 countries (Australia, Austria, Colombia, Czech Republic, Denmark,

Finland, France, Germany, Great Britain, Greece, Hungary, Italy, Japan,Mexico, Netherlands, Poland, Portugal, Romania, Russia, Spain,Switzerland, Turkey, Ukraine, USA)

Method: Face-to-face / telephone interviewsInstitute: GfK Nuremberg, Germany


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Michael Meissner,Vice President Corporate Affairs, Amway Europe

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With our annual survey on entre-preneurship, Amway aims to un-derstand what drives entrepre-neurship all over the world andto facilitate a growth in self-em-ployment by releasing concretesocio-political thought-provokingimpulses. Thanks to the rangeof high quality products andspecic business model, Amwayoffers unique career opportun-ities and therefore takes on theresponsibility for engaging inpublic discussion on entrepre-neurship providing decisionmakers in politics, economy andsociety with a basis for mea-sures to encourage the founda-

tion of businesses.

One important nding of theAmway Global EntrepreneurshipReport 2013: There is greatpotential for self-employmenteverywhere, but actual self-em-ployment rates remain at an everlow level. So what is preventingpeople from taking the moveinto self-employment? On theone hand, lack of starting capi-

tal, the uncertain economicsituation and especially thefear of failure with its multiplefacets such as nancial ramica-tions, legal responsibilities, ordisappointment of family, haveconsistently been identied asthe greatest obstacles to self-employment. On the other hand,it is also a question of legisla-tive bodies and educational insti-tutions remaining challenged inimproving the conditions andregulations af fecting entrepre-neurship. We therefore highlywelcome the measures of theEntrepreneurship 2020 ActionPlan 1 implemented by the Euro-pean Commission, to reduce thefear of failure.

Nevertheless, we still need toget to the very bottom of one

fundamental question: Why are

some people and nations morewilling to take risks than others?To nd out about cultural differ-ences in attitudes, concerns anddesires of entrepreneurs fromthe most various nations, Am-way decided this year to extendthe survey to 24 countries allover the globe and to engage ina partnership with the Chair for

Strategy and Organization of theTechnical University Munich.

Always discussing topics rel-evant to the encouragement ofentrepreneurs and advantagesof self-employment, the 2011report led to insights on family-friendly employment, and in2012, the role of self-employ-ment as the labor model of thefuture was discussed.This years Amway GlobalEntrepreneurship Report 2013gives an up-to-date view onself-employment potential andobstacles hindering entrepre-neurial culture, such as the fearof failure. Whatever the focus,the reports overall goal wasand is to point out the economicpotential for entrepreneurs inthe different national economies

and to support their activation.

Introduction

Michael Meissner


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Fostering an Entrepreneurial Culture

Prof. Dr. Isabell M. Welpe,Chair for Strategy and Organization,TUM School of Management,Technische Universitt Mnchen,Munich, Germany

Entrepreneurship is a necessityin our society. It is a philosophybased on individual initiative andon the insight that professionallife is more than just getting a

job. Entrepreneurship achievesself-fulllment, gains respect andenables real innovation by look-ing at the next necessary stepstowards a better world. The Am-way Entrepreneurship Report of2013 has shown the fundamen-tals of self-employment, regard-ing attitudes, motivation andfears towards entrepreneurship,and generated deeper scienticinsights into entrepreneurshipon an international scale. There

is no doubt that entrepreneursare willing to follow their idealsbut there are still too many

potential entrepreneurs, not putt-ing their plans into action. Here,a lack of entrepreneurial thinkingand vision, scarce political initia-tives and insufcient supportinginfrastructure offered by thestate all has a role to play.

A major aspect of the unfavor-able situation in many countries

is the lack of entrepreneurialencouragement and education.Some participants of the AGERsurvey might be willing to starta life in self-employment, butoften feel they are lacking thenecessary education, knowledgeand social encouragement. Itis here that universities have apotential role to play in encour-aging faculties and students tocommercialize their scienticdiscoveries and scientic inven-tions through entrepreneurship.In order to start a business, con-sistent re-thinking is necessaryand a change of perspective isindispensable, as well as bring-ing together a group of peoplewith business and technicalbackgrounds. However, univer-sities as we know them may of-ten be the wrong place to teach

and foster radical innovation, sowe might rather need some newapproaches towards a world that

has changed in cycles since thehistory of mankind began.

Society and politics also havetheir role to play in supportingentrepreneurial individuals intheir quest for social and techno-logical innovation by showingthem respect and appreciationfor advancing human economies

and societies. Throughout thecenturies there were men whotook rst steps down new roadsarmed with nothing but their ownvision. Their goals differed, butthey all had this in common: thatthe step was rst, the road new,the vision unborrowed, and theresponse they received - hatred.The great creators - the thinkers,the artists, the scientists, theinventors - stood alone against

the men of their time. [] Butthe men of unborrowed visionwent ahead. They fought, theysuffered and they paid. But theywon. 2

Even though it is a long-termgoal, we need to establish aculture that values entrepre-neurship, encourages potentialentrepreneurs and helps them

to overcome the fears of anuncertain future. It will be worth-while.

Prof. Dr. Isabell M. Welpe


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Entrepreneurship is an importantpillar of economic growth. Tobetter understand attitudes and

motivations behind entrepreneur-ial attitudes the 2013 AmwayGlobal Entrepreneurship Reportsurveyed 26,000 respondents in24 countries. The results showthat entrepreneurship continuesto enjoy a high reputation. 70%of respondents to the 2013Amway Global EntrepreneurshipReport have a positive attitudetowards entrepreneurship and39% can imagine becoming self-employed. Yet, the gap betweenpotential entrepreneurs - peoplethat have a latent preparednessto embrace an entrepreneurialopportunity - and actual entre-preneurs is still large. So why doso few potential entrepreneursmake the move?

Key Drivers ofEntrepreneurial Intentions

Independence and incomeare important drivers of en-trepreneurial intent, whereasperceptions of risk representan obstacleto becoming self-employed 3 .

The survey results yield aclear answer as to what moti-vates people: Independence is amore important driver for becom-ing self-employed than income.

Respondents name being inde-pendent from an employer andrealizing their own ideas as the

dominant reasons for star ting abusiness, while income-relatedaspects such as a second in-come or return to the job marketwere less important.

However, two patterns sug-gest that people think of startinga business out of necessityrather than due to opportunity.First, in countries with relativelylow GDP per capita 4 , entrepre-neurship as a second source ofincome becomes a main driver.Second, in countries involved inthe European economic crisis,people consider entrepreneur-ship as a way out of unemploy-ment.

Still, the fear of failure rep-resents a strong obstacle tobecoming self-employed. 70%

of the respondents conrm thisassertion.

The consequences of fail-ure can be grouped into threecategories: social, psychological,and nancial 5 . The fear of thenancial consequences of busi-ness failure is an obstacle tobecoming self-employed (41%).Social consequences such asdisappointing family, friends and

co-workers and psychologicalconsequences like personal dis-appointment all rank far behind

nancial consequences.

In countries directly involvedin the European economic crisismore than every second re-spondent views the crisis asa severe obstacle.

National culture inuences theevaluation of entrepreneurialintentions as well 6,7 . Countriesthat are more individualistic orless uncertainty avoidant valueindependence higher. Income asa motivation is not affected byculture. The survey also revealsa strong relationship betweenuncertainty avoidance and fearof failure. For example, in theUSA, only 37% of the respon-dents name fear of failure as anobstacle to becoming self-em-ployed, in Japan it is 94%.

Fostering EntrepreneurshipGiven that more than two thirdsof the respondents considerfear of failure as an obstacle tobecoming self-employed, policymakers need to implementmeasures to help potentialentrepreneurs overcome theseobstacles and take action. Forexample, the European Com-mission recently presented an

Key Results of theAmway Global Entrepreneurship Report 2013Despite the recent economic uncertainties, people are positive about entrepreneur-ship. Our respondents name independence as the most important motivation forbecoming self-employed. Yet, fear of failure remains a severe obstacle to starting abusiness. Policy makers should address these fears and take the necessary stepsto remove them and foster an entrepreneurial culture.


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action plan for fostering entre-preneurship. This action plan

builds on three areas: entrepre-neurship education, role models,and a fertile environment forstart-ups 1 . The results of thesurvey suggest that implement-ing such measures may reducethe fear of failure and ease thestart-up phase.

Respondents to the surveyconrm the encouraging effect

of entrepreneurship educationon becoming self-employed(33%). Respondents with auniversity degree expect entre-preneurship education to be astronger facilitator for startinga business than those withouta degree. In part, this might becaused by intensied teachingof entrepreneurship skills atuniversities 8 . Consequently, therate of respondents that canimagine starting a businessis substantially higher amonguniversity graduates. Going onestep further, policy makers mightconsider already introducingentrepreneurship education atschool 1 . In fact, the outcome ofteaching entrepreneurial skills atschool is being currently exam-ined in a project in Denmark 9 .Such initiatives can help to grow

an entrepreneurial mind-set andfoster an entrepreneurial culture.Policy makers should thereforework with the education estab-lishment to facilitate entrepre-neurship education throughoutthe curriculum at all ages andlevels of attainment.

Established and successful

entrepreneurs may also func-tion as role models for potential

and new entrepreneurs. Throughmentoring programs andbusiness networks, potentialentrepreneurs and actual entre-preneurs may obtain crucial rst-hand information on the start-up phase. Interestingly, againrespondents with a universitydegree value this option more.Policy makers should work withstakeholders to create networks

and national gureheads for thepromotion of entrepreneurshipand the creation of mentoringnetworks.

When being asked about fos-tering conditions, respondentsname access to nancing as themost important facilitator (42%).Also, a reduction in bureau-cracy might reduce difculties inbecoming self-employed (29%).Especially respondents with afear of nancial failure and thelegal consequences of businessfailure when starting a busi-ness view these conditions asbenecial. Policy makers shouldbring stakeholders togetherto examine the modernizationof the legal consequences offailure, to remove stigmatizationand provide pathways back into

business.

Society can contribute to increas-ing the rate of entrepreneurshipand innovation by valuing entre-preneurship and people who actentrepreneurially. By confer-ring social status, esteem andappreciation for entrepreneursand entrepreneurial behavior of

individuals, society can createsustainable entrepreneurship.

Amway supports policy makersattempts to encourage entrepre-neurship and to tackle the fearof failure in a holistic manner.Amway believes that policy mak-ers should follow suit and cometogether with stakeholders todevelop action plans to removethe fear of failure and encourageentrepreneurship.


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Results in DetailAmway Global Entrepreneurship Report 2013


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The change from a Europeansurvey in 2012 to an interna-tional analysis of entrepreneurialculture in 2013 has unveiled a

slight increase concerning thepositive attitude towards self-employment. This years reportrendered a positive attitude to-wards entrepreneurship of 70%on an international scale. How-ever, when confronting the 16participating countries from lastyear with their current results,we see a decrease down to 67%(2012: 69%). This conrms thatespecially newly-added coun-tries are the ones that keep thepositive attitude at a high level.The overall positive view onentrepreneurship yields hope forfurther growth in entrepreneurialambition, as positive attitudestowards entrepreneurshipincrease peoples intentions tobecome self-employed 3 that, inturn, build a basis for future en-trepreneurs 10 thus closing the

constantly high entrepreneurialgap 11 (31%). A detailed over-view of the entrepreneurial gapcan be found on the followingpages 8/9.

Since 2011, Denmark is leadingthe ranking with the most posi-tive view on entrepreneurship.This year, Denmark could offsetlast years decrease in its posi-tive attitude (2013: 89%, 2012:

85%, and 2011: 88%). Denmarkis followed by the two newly-participating countries F inland(87%) and Australia (84%). Even

though Great Britain, last yearranking second, increased itspositive attitude (+2%), four new-comers pushed in above.

The countries in the EuropeanUnion cover the full spectrumand yield the countries with theleast as well as most positive at-titude towards entrepreneurshipamong all Amway Global Entre-preneurship Report countries.The Scandinavian countries inthe study show the most posi-tive view on entrepreneurship(Denmark, 89% and Finland,87%). At the end of the EUranking remain Hungary (53%),Austria and Germany (both 57%).

Respondents from countriesthat are commonly associatedwith the economic and nancial

crisis in Europe see entrepre-neurship less positive than lastyear (Spain, -7%; Portugal, -6%;Italy, -5%; Greece, -3%). Besidethe crisis-struck countries, Rus-sia (-8%), Austria (-6%), Franceand Switzerland (both -5%) alsohad to deal with decreases inthe positive attitude.

Overall, the positive attitudetowards entrepreneurship is

considerably high in the interna-tional survey. However, obviousgender-based differences can beobserved, which are consistent

with other scientic results12

.The overall average of positiveattitude towards entrepreneur-ship among the 24 countriessees men in front with 72% andwomen come up to 68%.

When it comes to age, it be-comes obvious where theup-to-thirties are especiallypositive about entrepreneurship:Finland (92%), Denmark (90%),Netherlands and France (86%)are way ahead of USA (52%) andSwitzerland (57%). Also, youngparticipants in Turkey (66%) andHungary (68%) are more com-fortable with the idea of self-employment than Americans andSwiss interviewees.

The educational gap 13 openswide when it comes to entrepre-

neurship, especially in the USA(27%), Italy, Portugal, and Spain(each 22%) as compared to Fin-land (2%), Greece (3%), and theNetherlands (4%). Among thosewith a university degree, theDanish rank highest (95%), theAustralians second (93%) andthe Colombians number three(91%). Hungarians (66%) andTurks (67%) are at the end of theline, just a short distance away

Positive Attitude Towards Entrepreneurship - New Countries fromthe Amway Global Entrepreneurship Report Up FrontThe all-new Amway Global Entrepreneurship Report ascertains positive internationaltrends in entrepreneurship, but the entrepreneurial gap is on par with the Europeanndings of 2012. Politics, companies, and educational institutions need to join ef-forts to reduce it.



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from Greeks (71%), Austriansand Germans (each 74%). Peo-ple without a university degreeshow a ranking similar to theircounterparts holding a universitydegree, yet with respectively

lower percentages. Denmark(88%), Finland (87%) and theNetherlands (82%) range in thetop positions of this list, whilethe last ranks are taken by theUSA (48%), Hungary (51%) and

Germany (55%). One explanationfor the more positive attitude ofgraduates might be that univer-sities more and more includeentrepreneurship education intheir curricula 8 .

of polled Amway Global EntrepreneurshipReport countries have a positive attitude

towards self-employment.

70%

How do you see entrepreneurship? negative Dont know/no answerpositive

Average 70 % 25 %

89 % 9 % 2 %

87 % 12 % 1 %

84 % 12 % 4 %

82 % 13 % 5 %

82 % 17 % 1 %

77 % 20 % 3 %77 % 17 % 6 %

76 % 23 % 1 %

76 % 17 % 7 %

72 % 25 % 3 %

70 % 21 % 9 %70 % 17 % 13 %

69 % 30 % 1 %

67 % 29 % 4 %

65 % 21 % 14 %

65 % 31 % 4 %

61 % 26 % 13 %

60 % 36 % 4 %

57 % 40 % 3 %57 % 37 % 6 %

56 % 36 % 8 %

53 % 40 % 7 %

5 %

69 % 31 % 0 %

61 % 39 % 0 %

Denmark

Finland

Australia

Colombia

Netherlands

Great Britain

Mexico

Ukraine

Japan

France

Romania

Poland

Italy

Greece

Czech Republic

Russia

Switzerland

Turkey

Portugal

Spain

Germany

Austria

USA

Hungary

Entrepreneurship favoured by 70% in 24 polled countries worldwide.


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In the previous edition of Am-ways Entrepreneurship Report,the fear of failure has beenamong the highest obstaclesto becoming self- employed. Its

those obstacles and fears thatlead to a high gap betweenpeople that can imagine startinga business and those actuallyputting their plans into action.Is the gap because they do notbelieve in their abilities, theirnetworks and ideas, or becausethey do not feel supported bytheir environment? This raisesthe question as to why somepeople are willing to take risksmore than others and what fac-et of the fear of failure prevails?This years report thereforeaimed to nd out more aboutthe inner thoughts that go alongwith starting up a business andwhat can be done to encouragemore entrepreneurship.

Risks and ObstaclesHindering Entrepreneurship

Among the polled countriesworldwide, for 41% of therespondents nancial burdensup to bankruptcy and for 31 %

the economic crisis turn outto be considerable obstaclesagainst starting ones own busi-ness. This turned out to be eventruer for the member statesof the European Union, where43% and 37% respectively see itthat way. Among the remaining

(non- E.U.) participants of theAGER 2013, the economic crisisseems to have left less trace,as only 21% of the respondentsfeel threatened by it and also

nancial burdens restrain only38% of the respondents fromstarting a business. How-ever, despite the existence andthreatening cognition of risksand obstacles to entrepreneur-ship, still a considerable numberof people seem ready to giveconsideration to starting theirown business.

The average self-employment

potential 14 in all surveyedcountries lies at 39%. Even if itis lower when evaluating the re-sults of the EU member states,still over one third can imaginestarting their own business(36%). Breaking it down to thesingle countries, the highest po-tential can be found in Colombia(63%) and Mexico (56%) whileGreece, despite its nancial

problems, remains Europespalladium of entrepreneurial po-tential, with a solid 53% (50% in2012). The other end of the lineis held by Germany, with only26% of the respondents con-sidering the possibility to starttheir own business while Japanranks last with only 17%.

To implement the aforemen-tioned potential, political

decision-makers need to helppotential entrepreneurs to puttheir ideas into action, as along-term decline in start-upsand entrepreneurial activity and

thus in small- and medium-sizedbusiness is a threat to every na-tions economy and society as awhole. To present an example:

The traditional mid-size busi-ness culture in Germany ishit hard by this development.Projections of the GermanChamber of Industry and Trade(DIHK) expect 1 million lessself-employed people in 2050compared to the status quo. 15 The comparably well-functioningGerman labor market may serveas one explanation, but an atleast equally-important reasonis believed to be the fear of fail-ure is very high in Germany. 79%of all polled Germans reply yesto the question In your opinion,is the fear of failure an obstacleto starting a business? When

asked, which aspects contrib-ute the most to this fear offailure with an enterprise, 59%of the polled Germans conrmthat nancial burdens up tobankruptcy constitute the mainobstacle.

Thus, it is no surprise that it isother countries that lead theranking of successful entrepre-neurship: the number of people

A Closer Look at Obstacles to an Entrepreneurial Culture andat Possible Explanations for the Entrepreneurial GapWhat are the main reasons that interviewees perceive as obstacles against start-ing their own business? Which countries are leading the list when comparing self-employment potential to actual self-employment rates?



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conrming that they are alreadyself-employed is highest inGreece (21%), Japan (18%), andColombia (17%). Germany alongwith Finland, Australia, Po-

land, and the Ukraine is at 5%.Denmark, France (each 4%) andRussia (3%) rank last.

Great EntrepreneurialPotential not Fully ImplementedOne crucial aspect of the world-wide survey is the entrepre-neurial gap 16 . For the averageof all polled countries, this gapbetween participants showingentrepreneurial potential andthose already self-employed isat 31% (resulting from an aver-age self-employment potentialof 39% versus an average rateof 8% of people who are actuallyself-employed).

Furthermore, it is comparativelyhigh in three of the new coun-tries: Mexico is number one with47%, followed by Colombia with

46% and Australia with 44%.

On the other hand, the lowestgures for the entrepreneurialgap can be observed in Japan(actually in this country theself-employment rate has beenfound to be 18%, whereas only17% answered yes when askedwhether they could imaginestarting their own business),Germany (21%) and Spain (22%).

Encouraging Entrepreneurs,Eliminating the Fear of FailureSo why is it that countries likeColombia and Mexico havebig entrepreneurial potential,

but show low self-employmentrates? One explanation couldbe structural obstacles: Re-spondents do not really fearto fail with an enterprise, butsee public funding and start-uploans, entrepreneurship edu-cation and support throughbusiness networks as essen-tial preconditions to start theirown business. However, in theeyes of the respondents in Co-lombia and Mexico, government,media and society in generalare nowhere near providingthose encouraging conditions(How entrepreneurship-friendlyis society in your country? Co-lombia: 66% unfriendly, Mexico45% unfriendly).

Also, many of the ndings thatwere collected in 2012 seem to

be applicable to the new 2013survey as well. The obstacles tofounding a business identiedin the European study of 2012emphasized the signicant roleof cultural susceptibilities andthe 2013 global survey showsthe same cultural, social andpolitical disadvantages. Theindividuals perceive objectiveobstacles against starting abusiness. Heres where the

various groups involved have toset up incentives, bring downbureaucratic hurdles and helpnance new business by help-ing people to start up an own

business. A comprehensiveoverview of possible measuresthat governments, educationalbodies and other institutionsin the various polled countriesmight implement in order tofoster entrepreneurship can befound on pages 1618.

of polled respondents see nancial burdensup to a possible bankruptcy as one of the

major obstacles to becoming self-employed .

41%


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Self-Employment Is Very PopularAmong Young RespondentsStarting ones own business isstill very popular among younger

participants: 77% of respon-dents under the age of 30 (com-pared to 70% of all age groups)have a positive attitude towardsself-employment. Almost everysecond respondent in this agegroup (48%) can imagine be-coming an entrepreneur (over allage groups: 42%). For youngerrespondents, these gures, onthe whole, are similar to theresults of the European survey2012. For the overall averageof all age groups, things havechanged, as their entrepre-neurial potential rose by 4%in contrast to last year. Thisshows that the gap betweenyounger and older people isclosing more and more.

In 2013, it is young Colombians,Mexicans and Romanians who

express a particular interest inbeing self-employed (62% eachof all interviewees from thesecountries). The highest amountof disapproval for entrepreneur-ship comes from Japan (82%of interviewees under the ageof 30 cannot imagine startingtheir own business), Austria(58%) and Denmark as well asPortugal (each 56%).

Gender-Inuenceon Entrepreneurial PotentialAmong all respondents from allcountries, men show greater

entrepreneurial potential thanwomen (44% to 33%). This gen-der gap 17 of 11% also slightlywidened by comparison withlast year (2012 entrepreneurialpotential: Men 43%; Women34%).

The biggest differences in posi-tive attitude between men andwomen can be found in Italywhere every second male (52%)can imagine starting their ownbusiness, but only one third ofwomen do so (32%), as well asin Denmark and Hungary wherethe gap is at 15%. On the otherhand, in Colombia (1%), Ger-many (4%), Austria and Australia(each 5%) gender does not seemto inuence peoples attitudethat much.

Are Graduates more Positiveabout Entrepreneurship?Additionally, the 2013 reportreveals a high educational gap 13 between people with a universitydegree (82%) and their counter-parts who have not completedtertiary education (67%) whenit comes to expressing self-employment potential. Theeducational gap has widened to

a considerable 15% by compari-son with last year (2012: 12%).Surprisingly the educationalgap is highest in the U.S. (27%).

Portugal, Spain and Italy sharenot only the difcult economicsituation and nancial havoc,but also a high educational gapwith a collective value of 22%.Greece, despite its economicproblems, boasts a decreaseof 8% and hence is the countrywith the lowest educationalgap (3%), after Finland (2%) andbefore the Netherlands (4%).

The question remains why gradu-ates show higher entrepreneurialpotential than people withouta degree and entrepreneurshipeducation might be a key factor.The inclusion of entrepreneur-ship education in universitiesstudy programs 8 could positivelyinuence graduates attitudetowards entrepreneurshipand evidence from this report

gives support to this argument:Entrepreneurship education isseen as an encouraging factorby many more graduates (39%)than by respondents with nodegree (32%). Therefore policymakers should consider alreadyincorporating entrepreneurshipeducation in school educationin order to foster an entrepre-neurial culture.

Criteria of the Average Entrepreneurial Prole:Still Young, Male and GraduatedIn the 2012 Amway European Entrepreneurship Report, the prole of possibleentrepreneurs was quite easily dened: young, male and university graduates. Thendings in this years Amway Global Entrepreneurship Report also conrm this pro-le at a global level.



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of all respondents under the age ofthirty from all polled countries can

imagine starting their own business.

48%

However, it is not certain wheth-er universities on the wholeboost entrepreneurial spirit andactually contribute to radical

innovations. This also dependson the personal suitability ofpotential candidates 18 .

Entrepreneurial ProleSumming up, the prole ofpotential entrepreneurs is still

weighted by young, male, univer-sity graduates. People with lowereducational levels and womenseem to fall further and further

behind their graduate malecounterparts when it comes tothe idea of self-employment al-though we can observe that self-employment seems to becomea realistic working model for allage groups.

Overall, almost one third of therespondents can imagine startinga business, but have not takenany action (31%). This indicates

that the decision-making processshaping potential entrepreneursinto real entrepreneurs is still adifcult task in the views of allrespondents, and calls for furtherinstitutional reforms to fosterentrepreneurship.


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Despite remaining the most ap-pealing aspect for starting up abusiness, independence froman employer and being onesown boss has lost importanceby comparison with the last

years (2013: 43%, 2012: 45%,2011: 46%). The U.S. (65%),Denmark (64%), and Australia(62%), show the strongest needfor independence, with Den-marks votes even rising in thiscategory by 17% by comparisonwith last year. Seeking for inde-pendence is especially prevalentin countries with a high individu-alistic orientation. Relatively highrankings can also be observedin Greece (56%), Switzerland(53%), the Netherlands (51%)and Poland (50%).

Independence from an employermeans that entrepreneurs haveto trust their own judgment in-stead of relying on the decisionsof others. Ultimately, it meanstaking the full responsibility forones own life instead of trusting

others with entrepreneurial deci-sions. Empirical evidence sug-gests that self-employed peoplemay be higher in independencethan others 19 however, an entre-preneur is obviously not free inevery decision (self-employedpersons still have to answer tonanciers, banks etc.), althoughtheir level of independence is

typically higher than that of anemployed individual 3 .

The chance for self-fulllmentand the realization of their ownideas stays at second place

(2013, 2012, 2011: 38%).Consistently, people in countrieswith low uncertainty avoidancend self-fulllment as a reasonto start a business. The highestpercentages in this categorycan be observed in the USA andDenmark (both 62%) as well asFinland (56%). This aspect rankslowest in Russia (18%), Colom-bia (19%), and Romania (23%).

Especially young respondentsunder 30 years (45%) and everysecond participant holding auniversity degree (50%) show astrong need for self-fulllmentand the possibility of realizingtheir own ideas. The latter eventhink of a fully self-destined lifeas the most appealing aspectfor starting up their own busi-ness.

Contrasting this years resultswith last years participants(29%), second income prospectshave slightly lost in importanceby comparison with the Euro-pean survey of 2012 (33%). Re-spondents from Romania (53%),the USA (47%) and Mexico (45%)assign high importance to this

aspect, whereas the Nether-lands (12%), Spain (13%), andGreat Britain (14%) only reportlow afrmation to the perspec-tive of an additional income as amotivation for starting ones own

business.

The better compatibility offamily, leisure time and careeris highly appreciated by re-spondents from the U.S. (53%),Colombia (46%), and Australia(45%). As an antithesis to theaforementioned countries, re-spondents in Ukraine and CzechRepublic rate this factor as theleast appealing with only 12%.This factor is especially valuedin countries where fear of failureis low. Overall, a quarter of theparticipants rate compatibilitywith family, leisure time and ca-reer to be a reason for becomingself-employed (24%).

While in 2012, 22% of theacademics named entrepreneur-ship as a possible alternative

to unemployment, only 18%see it that way this year. Thepercentage of respondents witha university degree who are sub-scribing to this point of view isespecially high in the USA (47%),Greece (42%) and Por tugal (27%),whereas it is noticeably low inJapan (3%), Colombia (5%), andRomania (9%). The numbers

Its Not All About the Money Desires and Ambitions

Independence from an employer, self-fulllment and the possibility to realize onesown ideas still rank high as motivational factors for entrepreneurship. But also tra-ditional values like family, friends and leisure time have become more important topotential self-employers at least in some parts of the world.



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do not change when asking thesame question to par ticipantswho do not have a universitydegree: The highest afrmationof this group of interviewees tothe question of self-employment

being an alternative to unem-ployment comes again fromGreece (45%), the U.S. (43%)and Portugal (32%), with Colom-bia (5%), Japan (7%), and Great

Britain (9%) ranking lowest.So a point of view that its allabout the money no longerdepicts the motivations andreasoning of would-be- entrepre-neurs. In accordance with overall

social developments, oldvalues like family, leisure timeand the compatibility of profes-sional life with personal lifemake an important difference

to almost one fourth of therespondents. It may be this newkind of entrepreneurship thatleads the way into real innova-tion, self-fullling achievementand thus into a more balanced

economy.

Independence from anemployer, being my own boss

Self-fulllment, possibilityto realize own ideas

Second income prospects

Better compatibility of family,leisure time and career

Return to job market,alternative to unemployment

None of the above

48 %

43 %

45 %

38 %

30 %

29 %

26%

24 %

18 %

20 %

9 %

15 %

In your opinion, which of the following aspects appealto you as reasons to start up your own business?

AverageAge group 14-29

of all polled respondents of the Amway GlobalEntrepreneurship Report 2013 specify inde-

pendence from an employer, being my own bossas being the most appealing reason for self-

employment.

43%


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The core problem lies withinreach of more than two thirds(70%) of the polled respon-dents: it is the fear of failure

that presents an obstacle tostarting a business. Furthermorethe scientic insights showthat in countries where culturaluncertainty avoidance is high,the fear of failure also tends tobe high. Interviewees positiveattitude towards entrepreneur-ship, however, in these countriesis particularly low.

Especially respondents in Japan(94%), Italy and Czech Repub-lic (each 91%) are extremelyfrightened of failure when tryingto start a new life-scheme bystarting with an enterprise. Onthe contrary, the U.S. (37%), theNetherlands (43%), and Mexico(47%) show the lowest percent-ages of those participants whoare afraid of failing.

To respondents from all thepolled countries, the fear offailure is composed of differentfactors. The most pronouncedfactor is nancial burdens upto bankruptcy (41%). Followedby one that is basically validfor most of the internationallypolled countries is the threatof the economic crisis (31%).Subsequently, the threat ofunemployment (15%) has its

own rank and the fear of takingover the responsibility and legalconsequences such as lawsuits(each 13%) impact the respon-

dents opinion making.

The nancial consequences of afailed business can be mitigatedby the institutional and legalconditions of the country inwhich the failure took place.An important factor is the bank-ruptcy law applicable, as wellas additional legislation. 5

Other than expected, reputa-tion loss in front of friends,co-workers or business part-ners, not to be given a secondchance (each 6%), and disap-pointing or losing family (9%)are minor parts of the fear offailure. This complies with thefact that a culture that givespeople permission to fail isnot in great demand (12%).However, standing out from the

other countries, Turkish peoplename personal factors such as

personal disappointment, lossof self-esteem (29%), disap-pointing or losing family (24%),

reputation loss in front offriends, co-workers, or businesspartners (18%) as their mostserious concerns. For the fac-tor reputation loss in front offriends, co-workers, or businesspartners, similar results can

interestingly be observed forSwitzerland (12%).Investigating the U.S. andthe E.U., a number of differ-

ences can be identied. Whilerespondents in the U.S. (37%)do not seem to fear failure,respondents in the E.U. (73%)are even more frightened thanthe international average (70%).Especially nancial burdens upto bankruptcy (E.U.: 43%; U.S.:23%) and the threat of the eco-nomic crisis (E.U.: 37%, U.S.:15%) cause much higher con-cerns in the E.U. than in the U.S.In contrast, Northern Europe 20 demonstrates a compromisebetween the E.U. and the U.S.:Their 60% afrmation concerningthe fear of failure is largely madeup of nancial burdens up tobankruptcy (39%) and threat ofthe economic crisis (27%).

Currently crisis-struck-countrieslike Portugal (61%), Greece

(54%), Hungary (52%), Spain,and Italy (each 50%) rate the

threat of the economic crisiseven higher than nancialburdens up to bankruptcy. Incountries that are less directlyaffected by the crisis, the per-centages range from under 20%such as Russia, Colombia, theNetherlands, Turkey, the U.S.,and Mexico.As already shown, Japanese

Different Countries, Different Fears Accelerators and Brakesfor Potential Self-EmploymentThe economic and nancial crises have a great inuence on entrepreneurship. Butabove that, it is still fears like the threat of nancial burdens that discourage would-be entrepreneurs. However, the results of this survey clearly show that the fearsvary from country to country.



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Percentages of respondents rating entrepreneurship education and teachingof business skills most important, when being asked about factors encouragingentrepreneurship and the foundation of businesses

respondents see the fear offailure as an intense obstacle tostarting an own business. Butunlike than the rest of the polledcountries, Japanese respon-dents state an enormous fearof being forced to take over theresponsibility (45%; the aver-age rate lies at 13%) and with anenormous 70%, Japan repre-

sents the highest score when itcomes to the fear of nancial

burdens up to bankruptcy (theaverage rate lies at 41%).

Finally, Colombia takes up aspecial position. The fear offailure is clearly present among54% of the respondents. This isdue to almost only one factor namely nancial burdens up tobankruptcy (33%). All the other

factors stay under 18%. In theLatin country, only university

degree holders, who are alsoworried by the threat of theeconomic crisis (31%), look atthings from a slightly differentangle (respondents without adegree: 16%). An almost similarto the overall Colombian ndings,but weakened outcome can befound in the Netherlands (43%fear of failure, expressed in 30%

nancial burdens).

Denmark

50 %Australia50 %Netherlands

41 %

Romania

35 %

Japan

32 %

Poland

26 %

Switzerland

26 %22 %

Italy

22 %

Finland

40%

USA

40 %

Austria

34 %

Great Britain

31 %

Greece

45 %

Spain

33 %

Germany

30 %

Ukraine

25 %

CzechRepublic

21 %

France

42 %

Colombia

38 %

32%

Mexico

29 %

Russia

23 %

Hungary

16 %

Turkey

Portugal

of all polled respondents agree that the fear offailure is a grievous obstacle to starting a busi-ness. However, the results show a wide scope

from Japan (94%) to the U.S. (37%).

70%


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As discussed earlier (see pages8/9), public funding and start-up loans as well as entrepre-

neurship education and teachingof business skills rank high,when interviewees were askedto specify the most essentialencouraging factors concerningthe foundation of businesses.

Low bureaucracy and mentor-ing, support through businessnetworks also play an impor-tant role. But also Backingfrom family and social networksranks in the mid-positions of therespondents listing of reinforc-ing factors when they are think-ing about self-employment.

Young adults (36%) and univer-sity degree holders (39%) voteabove the total average (33%)when they are asked to rate theimportance of entrepreneurshipeducation. Even if the private

backing from family and social

networks is quite important tothe graduated participants (24%),their focus, when it comes toprivate vs. professional support,lies on professional mentor-ing, support through businessnetworks (30%). University degree holders shownotably higher rates than non-

graduates when it comes to thewish for an entrepreneurshipeducation (+8%). The same

pattern can be observed for thedesire for support through busi-ness networks, and the above-mentioned low bureaucracy(each +7%). So, the decision forself-employment can be en-hanced by a variety of factors.

Countries that show a high fearof failure naturally are also theones that long for low-riskbusiness models. For instancein Germany (34%), Italy (29%),Hungary, Turkey, and Ukraine(each 26%) low risk is amongthe top three factors that en-courage entrepreneurship. Butalso in Austria (30%) more thanthe average participants (23%)consider low-risk business op-portunities to be an importantfactor. This correlates with thescientic ndings that culture

exerts a very important inuenceon the fear of failure and cul-tures that exhibit a high degreeof uncertainty avoidance, alsoshow higher percentages of thefear of failure. 21

The cultural attitude towardsuncertainty also bears a stronginuence on the risk assess-

ment as a reason againstself-employment. This can bechanged only very slowly and

necessitates patience with thecandidates, as well as long-termmeasures of nancial and legalsupport and assistance. Forinstance, the European Commis-sions second chance policy 22 tries to channel the stigmaassociated with business failureby producing communicationmaterials for both policy makersand the general public 5 .

When it comes to the vitalaspect of entrepreneurship-friendliness of the affectedsocieties, respondents dis-perse into two groups with 46%on each side: The rst groupstates that their society isentrepreneurship-friendly whilethe second group with the samepercentage regards its societyas entrepreneurship-unfriendly.

Not surprisingly though, peo-ple in societies perceived asentrepreneurship-friendly exhibitless fear of failure. It is theyoung respondents under 30years and graduates that showa small but powerful tendencytowards the entrepreneurship-friendliness of their country(each 49%).

Basic Conditions and Cultural Aspects:How to Reinforce the Encouraging FactorsThe results of this survey conrm professional support and education to be moreimportant for encouraging entrepreneurship rather than backing from family and so-cial networks. But cultural aspects play an important role too and there are distinctdifferences in how entrepreneurship-friendly or -unfriendly respondents assess theircountries as being.


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nancial burdensup to bankruptcy

41 %

threat of theeconomic crisis

31 %

personaldisappointment,

loss of self-esteem

14 %

being forced to takeover the responsibility

13 %

others4 %

legal consequences,lawsuits13

%

disappointing orlosing my family

9 %

reputation loss in frontof friends, co-workers,or business partners

6 %

not to be givena second chance

6 %

threat ofunemployment

15 %

17

In your opinion, is the fear to fail an obstacle to star ting a businessand if yes, which of the following aspects contribute the most to thisfear of failing with an enterprise?

of the U.S. citizens polled attest their country tobe very or rather entrepreneurship-friendly.

73%

It is essential for the EU to put in place an environment which helps entrepreneurs takerisks and start new businesses. Failed entrepreneurs remain entrepreneurs, and are aprecious resource. Due to experience gained by repeat entrepreneurs the failure rates of

second start up attempts are lower than for initial efforts. We should therefore supportentrepreneurs and give them a second chance.

European Commission Focus on boosting entrepreneurship at informal CompetitivenessCouncil, 19.07.2012 23


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Even if the entrepreneurialpotential of the U.S. is only in

the mideld, the intervieweesvoted their country as the mostentrepreneurship-friendly (3.02pt. 24 : 30% very friendly, 43%rather friendly). This overwhelm-ingly positive tendency of theU.S. places Denmark second(3.01 pt.: 19% very friendly, 62%rather friendly), and positionsAustralia at the third place (2.75pt.: 12% very friendly, 50%

rather friendly).

A vital argument for the sounddevelopment of an entrepre-

neurial culture is the support oflocal governments and societies.

This becomes obvious in crisis-struck-countries where respon-dents state their own societiesas the most entrepreneurship-unfriendly ones: Hungary guresa rather downbeat situation(1.81 pt.: 37% very unfriendly,37% rather unfriendly), withRomania following suit (1.86 pt.:24% very unfriendly, 33% ratherunfriendly). The situation in nan-

cially-stricken southern Europeancountries is slightly better, butstill far from good. For instance,Portugal (1.90 pt.: 31% very

unfriendly, 45% rather unfriendly),Spain (2.10 pt.: 25% very un-

friendly, 39% rather unfriendly),and Italy (2.14 pt.: 24% veryunfriendly, 40% rather unfriendly)show a tendency of more thanhalf the population consideringits society entrepreneurship-un-friendly. If entrepreneurship shallthrive, then society, educationalinstitutions, governments andpolitics should start new ap-proaches and have the stamina

for achieving a positive culture.


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Notes

1 European Commission (2013). Entrepreneurship 2020 action plan:Reigniting the entrepreneurial spirit in Europe. Brussels, Belgium:Retrieved from http://ec.europa.eu/enterprise/policies/sme/entre-preneurship-2020/index_en.htm.

2 Rand, A. (1943). The Fountainhead. USA: Bobbs Merrill.

3 Douglas, E. J., & Shepherd, D. A. (2002). Self-employme nt as acareer choice: Attitudes, entrepreneurial intentions, and utilitymaximization. Entrepreneurship Theory and Practice, 26(3), 81-90.

4 World Bank (2012). GDP per capita. Retrieved from: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD.

5 Ucbasaran, D., Shepherd, D. A., Lockett, A., & Lyon, S. J. (2013).Life after business failure: The process and consequences ofbusiness failure for entrepreneurs. Journal of Management, 39(1),163-202.

6 Hofstede, G. H. (2001). Cultures consequenc es: Comparing values,behaviors, institutions and organizations across nations. ThousandOaks, USA: SAGE Publications.

7 Hayton, J. C., George, G., & Zahra, S. A. (2002). National cultureand entrepreneurship: A review of behavioral research. Entrepre-neurship Theory and Practice, 26(4), 33-52.

8 Kuratko, D. F. (2005). The emergence of entrepreneurshi peducation: development, trends, and challenges. EntrepreneurshipTheory and Practice, 29(5), 577-598.

9 Moberg, K., Vintergaard, C., & Vestergaard, L. (2012). Evaluatingcontent dimensions in entrepreneurship education. In eurostat(Ed.), Entrepreneurship Determinants: Culture and Capabilities(pp. 89-98). Luxembourg: European Union.

10 Kruger, N. F., & Brazeal, D. V. (1994). Entrepreneurial potential andpotential entrepreneurs. Entrepreneurship Theory and Practice,18(3), 91-104.

11 Entrepreneurial gap is dened by the number of respondentsanswering I can imagine to start up my own business minusthe number of respondents answering I am self-employed.

12 Shinnar, R. S., Giacomin, O., & Janssen, F. (2012). Entrepreneurialperceptions and intentions: The role of gender and culture. Entre-preneurship Theory and Practice, 36(3), 465-493.

13 Educational gap is dened as the total of respondents withuniversity degree answering I can imagine to start up my ownbusiness, minus total of respondents without university degreeanswering I can imagine to start up my own business.

14 Self-employment potential = Total of respondents answering

I can imagine star ting my own business, regardle ss if their general atti tude towards self- employment is posit ive or negative.

15 Kapalschinski, C., Sigmund, T., & Stratmann, K. (Aug 6, 2013).Das Grndersterben, Handelsblatt.

16 Entrepreneurial gap is dened by the number of respondentsanswering I can imagine to start up my own business minusthe number of respondents answering I am self-employed.

17 Gender gap is dened as the total of male respondents answeringI can imagine to start up my own business, minus total of femalerespondents answering I can imagine to start up my own business.

18 Shih, G. (Mar 12, 2012). Peter Thiel, university-hater, heads tocampus, Reuters. Retrieved from http://www.reuters.com/article

/2012/03/12/us-st anford-t hiel-i dUSBRE82A0EO20120 312.

19 Shanea, S., Locke, E. A., & Collins, C. J. (2003). Entrepreneurialmotivation. Human Resource Management Review, 13(2), 257-279.

20 Northern Europe corresponds to the average of Denmarkand Finland.

21

Mueller, S. L., & Thomas, A. S. (2001). Culture and entrepreneur-ial potential: A nine country study of locus of control and innova-tiveness. Journal of Business Venturing, 16(1), 51-75.

22 European Commission (2013). A second chance to entrepreneurs.Retrieved from http://ec.europa.eu/sme2chance.

23 European Commission (2012). Focus on boosting entrepreneurship at informal Competit iveness Coun cil. Retrieved fr omhttp://europa.eu/rapid/press-release_MEMO-12-582_en.htm.

24 Measured on a scale from 1 to 4 points. Higher numberscorrespond to friendlier evaluations.


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Publisher:

Amway GmbHCorporate Affairs EuropeBenzstr. 11 b-c82178 PuchheimGermany

email: [email protected]: +49. 89. 800 94 158


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Amway Global Entrepreneurship Report 2013

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