Facts about entrepreneurship in Norway. Who become entrepreneurs and how do they perform?

Abstract

The report focuses on the identification of entrepreneurs and entrepreneurial firms from registry data. We provide characteristics of new firms: their distribution by cohort, industry and size: their survival, growth and productivity patterns and compare the results with corresponding patterns among incumbent firms. We then address key questions regarding who become entrepreneurs and how they perform. We define an entrepreneur as an individual having at least a blocking minority position in a private incorporated company (>33 percent) and who is either an employee or has a formal role (CEO, chairman of the board, or both) in the firm during start-up. The typical entrepreneur has at least upper secondary education (13−14 years of schooling) when setting up a company. Most entrepreneurs have a background in natural sciences, vocational and technical subjects (34 percent), general programmes (23 percent) or business and administration (19 percent). In the reference population, 13, 38 and 19 percent, respectively, have an education in these fields. In terms of their main income source, 75 percent of new entrepreneurs are wage earners and 16 percent are self-employed prior to becoming entrepreneurs, compared to 85 and 4 percent, respectively, in the reference population. The share of female entrepreneurs is less than one fifth during the whole period 2001-2011. The much higher entrepreneurship rates for men compared to women have very little to do with educational field; the relative entrepreneurship rate for men are in the range of 3−5 times higher than for women across all main fields of education. Whereas the number of entrepreneurial firms makes up roughly 3/4 of all new firms in a given cohort, their shares of their cohort’s total assets, sales revenues or employment during start-up are roughly 60 percent. Overall, entrepreneurial firms exhibit lower relative size growth (measured in terms of sales revenues and number of employees) than corresponding cohorts of all new firms, whereas new surviving firms grow much faster than surviving incumbent firms. Still, the incumbent firms of 2002 make up 85 percent of total sales revenues in 2011, whereas firms established in 2002−2010 account for 13 percent and firms established in 2011 make up only 2 percent. In terms of labor productivity (value added per employee) growth rates are quite similar between entrepreneurial firms and other (new or incumbent) firms.