ENTREPRENEURSHIP IN FLANDERS : A STATUS REPORT
Authors: Luc Sels, Mieke Booghmans, Elise Marescaux, Sophie De Winne and Ilke Van Beveren
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Abstract
Too few Flemings take the step towards independent entrepreneurship. Yet entrepreneurship is an important factor in, for instance, employment growth. These conclusions have put their mark on the discussion about entrepreneurship in Flanders over the past few years. But do they correspond with reality? This study investigated in how far pessimism about Flemish entrepreneurship is justified. It also checked the effects of starting entrepreneurship on job creation. To do that, it relied on several large-scale and rich international and Belgian databases. The analyses showed that, first of all, the rate of entrepreneurship in Flanders is actually not that bad - neither from an international point of view, nor with respect to the evolution Flanders went through in the last decade. Secondly, the analyses established that starting entrepreneurship has a positive effect on job creation, both in the short and in the long term. However, because it appeared to be negative in the medium term, the overall effect was only slightly positive, hence not significant. Based on these results the research team drew up a few conclusions as well as policy implications for Flanders.
Key words: Entrepreneurship, employment growth, job creation, starting entrepreneurship
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Objectives
The first objective of this study was to outline entrepreneurship in Flanders, to which end the Flemish rate of entrepreneurship was put into both a Belgian and European perspective. The study aimed at a static as well as a dynamic perspective. From a static point of view it investigated the position of the Flemish Region within the European conglomerate as well as compared to the other Belgian Regions. From a dynamic angle it estimated whether in a European perspective, Flanders has 'advanced' more quickly or more slowly. In addition, it tried to create a better insight into the transitions towards independent entrepreneurship and more specifically in the transition opportunities starting from paid labour and unemployment. This was also done in comparison with the other Belgian regions and the other European Member States. The second objective was to check to which extent entrepreneurship indeed lives up to the much ventilated assumption that it offers leverage for employment growth. In this respect we took a closer look at the role of starting entrepreneurship and more particularly at the start-up rate and its development in Flanders, Wallonia and Brussels. In addition we investigated regional diversity as regards starting entrepreneurship and the relation with employment and unemployment rates in order to be able to identify any effects of the economic situation on the regional differences in start-up rates. We concluded the study with an actual impact assessment, or more specifically an estimate of job creation as a result of starting entrepreneurship.
Clarification of key concepts The definition of the group of 'entrepreneurs' in this study corresponds with the international definition of entrepreneurship and is based on the International Classification of Status in Employment (ICSE-93) agreed on by the International Labour Organization (ILO) in 1993. In short, an 'entrepreneur' (or own-account worker) is anyone who is either (1) self-employed, or (2) a wage-earner or contributing family member at the head of a company. The rate of entrepreneurship is defined as the percentage of the labour force that is actively involved in starting-up a company or that has established its own company in the past three years. This corresponds with the Total Entrepreneurial Activity index used in international studies. Starting entrepreneurship in this study is reflected in the start-up rate, measured as the number of starting enterprises per 10,000 inhabitants.
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Methods and data
Three sources were used in order to realise the first objective. The first is the European Labour Force Survey (ELFS), which is built on a very elaborate sample and which allows for comparisons in time and between European member states. The second source consists of population files of the Data warehouse for the Labour Market and Social
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