WP7: Self-employment

WP Leader NUIG Maura Sheehan
WP Co-leader GRAZ Renate Ortlieb

The overall objective of this work package is to conduct a gender-sensitive analysis of the factors that promote the starting of a business by young people, the characteristics of these founders and their start-ups, the outcomes of self-employment, and the factors and policies that foster sustained business success, in particular innovation. The results will directly feed into EU funded policies used to support entrepreneurship. In detail, the objectives are:

  1. To describe the extent and characteristics of self-employment among young people (aged 16-30 years), especially those previously unemployed, across the EU27 member states.
  2. To examine the relationship between innovation and the survival of business start-ups across the EU27 member states.
  3. To analyse the key success factors and barriers to sustained start-up survival in the Cultural and Creative industries (CCI) and the Information and Communication Technologies (ICT) industries in 6 member states.
  4. To provide a policy mapping of effective and efficient interventions promoting self-employment among Europe’s youth, especially those who were previously unemployed; to promote and implement product and process innovation within start-ups; to promote the development and sustainability of start-ups within the CCI and ICT industries.
  5. Drawing upon examples of best practice within the EU and globally, to formulate policy recommendations to promote, develop and sustain business start-ups, especially among previously unemployed youth and those with a high propensity to face unemployment – e.g., women and those from ethnic minority backgrounds and immigrants.
D 7.1 Policy Literature Review
D 7.2 Mapping patterns of self-employment
D 7.3 Country case studies
D 7.4 Policy Brief and integrative report

Work and Role of Partners

Task 7.1 – Policy Literature Review

This task will examine the existing evidence of the role and effectiveness of self-employment and business start-ups for the young and to evaluate policies promoting start-ups and innovation, with an industry-focus on the CCI and ICT industries. These issues will be examined within the EU and will be enhanced by examples of global best practice and industry-specific cases.

Task 7.2 – Mapping Patterns of self-employment: Secondary Analysis
(UT )

Depending on the availability of variables included in the data sets, longitudinal and multivariate analyses to identify critical factors for long-term survival, innovation and growth will be conducted. The analysis of the following 5 data sets will provide background information on the characteristics of small and middle-sized enterprises in general and particularly on start-ups. The focus will be on characteristics such as number of employees, industrial sector, innovativeness, access to finance and internationalization /export. The data sets include:

  • SME Performance Review;
  • The Observatory of European SMEs;
  • The European Commission’s statistics on SMEs;
  • EFI – The Enterprise Finance Index;
  • CIS – Community Innovation Survey.

Two further data sets that contain information on the individual level will be analysed. These analyses will additionally focus on characteristics of the entrepreneurs, such as gender, age, ethnicity, education and employment/unemployment history. These data sets are:

  • GEM – Global Entrepreneurship and Development Index;
  • LFS – Labour Force Survey.

These will be analysed using standard econometric techniques. This analysis will enhance the literature review and key issues that emerge from Task 1. Tasks 1 and 2 will influence the questions asked in the case studies.

Task 7.3 – Country case studies

Firm level case studies will be undertaken to obtain a comprehensive understanding of the interaction between start-ups by youth in the CCI and ICT industries, especially among youth who were previously unemployed; factors that facilitate and hinder start-up activity and innovation; and how policy interventions, in particular Youth Opportunities and ESF monies may assist with start-ups, generate job creation and enhance their sustainability. We will be able to consider different points in the lifecycles of start-ups by selecting the cases according to that criterion.

The sample will comprise 12 cases for each of the 6 study countries: Ireland, Estonia, Poland, Germany, Spain and UK. We will conduct interviews with the founders (aged 16-30 years) of start-up companies. For policy evaluations, of the 12 start-ups in each country 6 should have received assistance under the Youth Opportunities initiative or similar and the remaining 6 should not have received assistance. Since we aim at a gender-sensitive analysis, 3 of the 6 start-ups in the sub-groups should have been founded by women and 3 by men. To capture the time dimension, these 3 start-ups in each sub-group should be in operation for different time periods: 1 start-up should be in operation for 1-5 months, 1 for 12-24 months and 1 for longer than 4 years. Although this design is subject to all the caveats about the changing economic and business cycle, it would enable us to make comparisons between the sub-groups and to identify findings which relate to the progression of the businesses over time.

Finally, we aim at considering both start-ups whose founders have been unemployed prior to the start-up and start-ups whose founders have not been unemployed. However, since the employment status prior to the start-up is of secondary importance, and the sampling according to the other criteria already is quite demanding, we will not define additional sub-groups according to this variable. Instead, we will secure that in each country at least one third of the considered founders has been unemployed prior to the start-up and at least one third has been employed or in school/university.

Policy makers and implementers:

In addition to the start-up case studies, two policy makers and two policy implementers (4 in total) in each of the study countries will be interviewed to obtain their input on the key objectives of this work package, especially the effectiveness of existing policy interventions and the relevance of examples of best practice identified in the literature review for their individual countries. Interviews with policy makers (e.g., in the Irish context, individuals who helped to formulate the Government’s Action Plan for Jobs 2012 initiative) will provide insight into the objectives and design of policies. Interviews with policy implementers (e.g. individuals working at Local Enterprise Offices who are attempt to secure micro credit for young entrepreneurs) will provide insights into the practical issues in implementing policies and the kinds of barriers faced. We will conduct these interviews early at the beginning of this work package to ask them to help identify start-ups who have received assistance under the Youth Opportunities initiative, in particular.

Task 7.4 – Synthesis & Policy Briefs

This phase will synthesise the findings from Tasks 1-3 and produce key