What are some of the intervening, extraneous, and moderating variables that the study attempted to control with its 10-nation design?

Question

In periods of economic downturn, government leaders try to stimulate entrepreneurship activity. Project directors of the Global Entrepreneurship Monitor, partnered with the Kauffman Center for Entrepreneurial Leadership of Ewing Marion Kauffman Foundation, the London School of Business and Babson College,designed a research study to add insight to what activities would be most likely to stimulate entreprenship activities.

What government policies and initiatives are most likely to generate high levels of entrepreneurial activity? Which are positively correlated with the economic well-beingof a country as measured by growth in GDP and job formation? Project directors of theGlobal Entrepreneurship Monitor (GEM), who define entrepreneurship as “any attemptat new business or new venture creation, such as self-employment, a new business organi-zation, or the expansion of an existing business, by an individual, a team of individuals,or an established business,” suggest the following:

•Promoting entrepreneurship, especially outside the most active age group (25–44), with specific programs that support entrepreneurial activity.

•Facilitating the availability of resources to women to participate in the entre-preneurial process.

•Committing to long-term, substantial postsecondary education, includingtraining programs designed to develop skills required to start a business

.•Emphasis on developing an individual’s capacity to recognize and pursue newopportunities

.•Developing the capacity of a society to accommodate the higher levels ofincome disparity associated with entrepreneurial activity

.•Creating a culture that validates and promotes entrepreneurship throughoutsociety

.Researchers at the Kauffman Center for Entrepreneurial Leadership (Babson College)and the London Business School revealed these propositions based on a studydesigned to prove a causal relationship between factors that affect entrepreneurialopportunities and potential, to business dynamics and national economic growth andwell-being.The research design compensated for lack of control of extraneous variablesby using data from 10 nations “with diversity in framework conditions, entrepreneurialsectors, business dynamics, and economic growth.” The longitudinal studyproposed to prove or disprove a new conceptual model of cultural, economic, physical,and political factors to predict economic growth.

Various data collection methods were employed, including:

•Promoting entrepreneurship, especially outside the most active age group (25–44), with specific programs that support entrepreneurial activity.

•Current, nonstandardized data collected by each national research team.

•Two rounds of adult population surveys (1,000 randomly selected adults percountry) to measure entrepreneurial activity and attitude, completed andcoordinated by an international market survey firm by phone—or face-to-facein Japan. (Market Facts [Arlington, VA] did the first round of data collection inJune 1998 [Canada, Finland, Germany, the United Kingdom, and the UnitedStates]. Audience Selection, Ltd. [London] conducted the second round inMarch 1999 from all 10 countries.)

•Hour-long personal interviews with 4 to 39 experts (key informants) in eachcountry.

•Detailed 12-page questionnaire completed by each key informant.

The perception of opportunity (.79) and the two measures of entrepreneurial potential of thepopulation—capacity (.64) and motivation (.93)—positively correlate with business start-uprates. And start-up rates positively correlate with growth in GDP (.60) and level of employ-ment (.47).While many cross-sectional measures still remain in this ongoing study, study directorsclaim, “The support for the conceptual model is encouraging, although clearly not conclu-sive. GEM provides a robust framework within which national governments can evolve a setof effective policies for enhancing entrepreneurship.”

Answer 1

One thing to understand about entrepreneurship is that it generates an opportunity for societies to give more freedom of professional skills to be performed without the need to finance the formal employment policies.

Most of the countries today are facing financial crises due to the COVID-19, and millions of dollars are being spent on having to take care of societies that have been affected not only because of the virus, but also because of the increased levels of unemployment.

My opinion towards this study, is that governments are looking for ways to reduce their financial budgetary deficit by providing incentives to the economically and professionally active population in such a way that with the implementation of new small business, governments will have the facility to reactivate their fallen economies.

Entrepreneurship is a great opportunity for people to discover their own talents and use them for the good of others. Whether the study ends up providing positive impacts in society, it will deeply depend on individuals to accept the challenge of becoming owners of their own talents, and in the long run, benefit them selves with better quality of life.