GEM was founded in 1997 as the world’s premier entrepreneurship research initiative. Its objective is to bring together the world’s best specialist scholars in entrepreneurship to study the complex relationship between entrepreneurship and economic growth.

It was launched in 1999 with 10 countries and has expanded to over 40 countries participating in the most recent round of research. Australia has been a participant since 2000.

Table 1 - GEM participant countries (accumulated)
	YEAR	COUNTRY
	1999	Canada, Denmark, Finland, France, Germany, Israel, Italy, Japan, UK, USA
	2000	Argentina, Australia, Belgium, Brazil, India, Ireland, Norway, Singapore, Spain, South Korea, Sweden
	2001	Hungary, Mexico, Netherlands, New Zealand, Poland, Portugal, Russia, South Africa
	2002	Chile, China, Croatia, Hong Kong, Iceland, Slovenia, Switzerland, Taiwan, Thailand
	2003	Greece, Uganda, Venezuela
	2004	Ecuador, Jordan, Peru
	2005	Austria, Jamaica, Latvia

GEM evaluates total entrepreneurial activity using six key components – participation, motivation, innovation, growth, finance and entrepreneurial capacity.

Most countries put their findings into one, large, composite, annual report. The Australian team provides an interactive website, which contains many smaller, linked reports so that people can ‘home in’ quickly on their specific information needs. The GEM Australia site contains a wealth and diversity of information presenting, analysing and interpreting the implications of the data. This produces a variety of perspectives on the country’s entrepreneurial activity in a global context, and its relationship with our economic growth.

The site is the key entrepreneurial information centre for three key audiences: entrepreneurship researchers, policy makers and business owners.

RESEARCH QUESTIONS AND THEORETICAL FRAMEWORK

GEM explores four fundamental questions:

• Are there national differences in entrepreneurial activity?

• What are the national consequences of entrepreneurial activity [scope, job creation, growth, social impact]?

• Why are some countries more entrepreneurial than others?

• What can be done to enhance entrepreneurial activity?

These questions are explored in the context of a theoretical model illustrated in Figure 1. Before GEM, most studies of economic performance focused on established enterprise - the status sector of the economy. The value of emerging (as distinct from established) enterprise was missing from most attempts to measure economic performance.

Figure 1 - The GEM theoretical model

GEM focuses its attention on a set of nine factors that specifically influences the entrepreneurial sector. These are termed the Entrepreneurial Framework Conditions and are the basis of the survey and interview questions. These are listed and explained in more detail in the GEM Research Methodology section of this website.

These basic nine frameworks are considered the main determinants of the entrepreneurial environment . They achieve their influence in combination with entrepreneurial opportunity and entrepreneurial capacity . These factors – environment, opportunity and capacity (which include both skills and motivation to capitalise on opportunity) – act together. Their combination determines the rate of business birth, death and growth (business churning), which in turn contributes to economic growth and prosperity.

RESEARCH METHODOLOGY

Three main data collection methods are used:

• A national adult population survey, randomly sampling a minimum of 2,000 typical adults. (In Australia the sample size has tended to vary above the minimum from year to year)

• Face-to-face ‘open-ended' interviews with experts (called ‘key informants') on various aspects of entrepreneurship. Experts are also invited to complete a detailed, structured questionnaire. The number of experts contributing to the project in any year may vary according to the national team's status of participation, i.e. new team or continuing team.

• The use of selected national economic data, measured in standard units, from sources credible international sources including the Organisation for Economic Cooperation and Development (OECD) and the World Bank.

Visit the GEM Research Methodology page for a more detailed explanation of the methods employed to collect data for GEM Australia and the forms of secondary sources used.

SUMMARY OF PREVIOUS YEARS' FINDINGS

Since the project commenced in 1999 it has found that entrepreneurial activity does vary significantly between countries. As the GEM project matures the country comparisons yield better understanding about the relationship between entrepreneurship and a country's economic performance.

Australia has proven to be a consistent performer in early-stage business participation with rankings always at least in the top 40% of the contributing countries. The participation measure of entrepreneurship portrays Australia 's entrepreneurial activity to be mainly of starting small businesses rather than a country that produces world class companies. However, the emphasis of the findings has now developed to appreciate the complexity of entrepreneurship in a country setting and includes measures of motivation, growth, innovation, financing and entrepreneurial capacity. In 2005 the GEM Global Executive team adopted international comparisons on each of these measures following the trend that Australia set in the 2004 report.