The purpose of this page is to detail the data collection methodology used in the GEM study and draw particular attention to Australia 's adoption of this methodology and any variation that may occur. GEM uses four major data sources:

• A national adult population survey, randomly sampling a minimum 2,000 typical adults in each GEM country: (in Australia the sample size has tended to vary above the minimum from year to year)

• Each newly joining GEM country conducts personal interviews with at least 18 experts/key informants, focusing on various aspects of entrepreneurship. These interviews are optional for continuing countries;

• Standardised questionnaires are also completed by the same experts/key informants and those experts/key informants interviewed in prior years of GEM research; and

• The use of standardised economic data selected from credible international and national sources.

1. THE ADULT POPULATION SURVEY

SURVEY METHODOLOGY
GEM's first major area of investigation – ‘What are the differences in the level of entrepreneurial activity between countries?' – is addressed through a national adult population survey which examines a representative sample of adults in each country. A minimum of 2,000 respondents is required, but countries may choose to pay for a larger sample to achieve lower variability. All national population survey data collection and checking is co-ordinated by the GEM coordination team at London Business School . The aim is to produce, within and across nations, the most reliable benchmark data within the cost constraints of the project. The Australian Centre for Emerging Technologies (ACETS) has conducted the Australian survey for the years 2004 and 2005. ACETS operates a dedicated research unit, which includes Computer Assisted Telephone Interviewing (CATI).

KEY ENTREPRENEURIAL ACTIVITY INDICATORS
The key indicators of entrepreneurial activity measured by the survey are:

• Participation in genuine business start-ups (paying wages no longer than three months);

• Participation in young firms (firms from 4 to 42 months old at time of survey); and

• Participation in business angel investment.

The first two of these participation rates are combined to form an indicator known as the `Percentage of Early-stage Participation (PEP)' index. PEP is best thought of as a way to compare the relative participation rates in new ventures between countries.

To measure participation in new venture creation, the questions asked were:

1. You are, alone or with others, currently trying to start a new business, including any type of self-employment; and

2. You are, alone or with others, trying to start a new business or a new venture with your employer - an effort that is part of your normal work.

A response of ‘Yes' to either of the above led to three supplementary questions to determine whether the venture was a genuine start-up. These were:

1. Over the past 12 months, have you done anything to help start this new business, such as looking for equipment or a location, organising a start-up team, working on a business plan, beginning to save money, or any other activity that would help launch a business?

2. Will you personally own all, part or none of this business?

3. Has the new business paid any full-time salaries or wages, including your own, for more than three months?

A ‘yes' response to a); 'all' or 'part' to b); and a ‘No' response to c) were required for the respondent to be classified as a genuine start-up participant; i.e. they had to be active in the business and expect to own at least part of it. ‘Yes' to a), b) and c) indicated a potential young firm participant.

Participation in young firms was measured by the question "You are, alone or with others, the owner of a company you help manage". Respondents who answered ‘yes' to this question and whose business had first paid wages more than three months before the interview but not more than 42 months ago were classified as young firm participants. Respondents who said they had not yet paid any wages were reclassified as start-up participants.

2. DEPTH INTERVIEWS OF NATIONAL EXPERTS

Interviews are conducted with people who are considered to be experts in at least one of nine identified framework conditions of entrepreneurship. This allows for a collection of varied opinions from professionals and entrepreneurs with specialist knowledge about different dimensions of entrepreneurship. Australia , as a continuing GEM team, has an option on whether this form of data is contributed annually.

The nine frameworks are:

• Financial Support: availability of financial resources, equity, and debt, for new and growing firms including grants and subsidies;

• Government Policies: the extent to which government policies as reflected in taxes, regulations and their application, are either size-neutral, discourage, or encourage new and growing firms;

• Government Programs: the presence of direct programs to assist new and growing firms at all levels of government – federal, state and local;

• Education and Training: the extent to which training in creating or managing small, new, or growing business is incorporated within the educational and training systems at all levels; and the quality, relevance and depth of such education and training;

• Research and Development Transfer: the extent to which national research and development will lead to new commercial opportunities and whether or not R&D is available for new, small, and growing firms;

• Commercial and Professional Infrastructure: the availability and quality of commercial, accounting, and other legal services and institutions that allow or promote the emergence of new, small, or growing businesses;

• Market Openness/Barriers to Entry: the extent to which commercial arrangements are prevented from undergoing constant change and re-deployment, preventing new and growing firms from competing and replacing existing suppliers, subcontractors, and consultants;

• Access to Physical Infrastructure: ease of access to available physical resources—communication, utilities, transportation, land or space—at a price that does not discriminate against new, small, or growing firms; and

• Cultural and Social Norms: the extent to which existing social and cultural norms encourage, or do not discourage, individual actions that may lead to new ways of conducting business or economic activities and, in turn, lead to greater dispersion in wealth and income.

GEM Australia has often interviewed more than twice the minimum number of experts and accordingly has built a healthy database of experts and interview data. We have sought out experts with multi-framework experience, and backgrounds that extended beyond for-profit entrepreneurial activity. Interviews were conducted face-to-face wherever possible and were recorded on tape and subsequently transcribed.

The interviews were semi structured with three objectives:

1. To identify the factors that limit the development of entrepreneurship, including the number of independent and/or corporate start-ups in the expert's country;

2. To identify the factors that contribute to the development of entrepreneurship, including the number of independent and/or corporate start-ups in the expert's country; and

3. To identify suggestions about what can be done to increase the development of entrepreneurship and the number of independent and/or corporate start-ups in the expert's country.

To meet these objectives the Key Informants are asked what they believe are the top three weaknesses impeding entrepreneurial activity in Australia , the top three strengths supporting entrepreneurial activity in Australia and to suggest changes they believe would improve Australia 's entrepreneurial effectiveness.

The interview content is then classified, using qualitative analysis techniques, into the nine framework conditions, with the freedom to create new categories where comments do not fit any of the framework conditions. Extensive use is made of sub-categories – for example Financial Support weaknesses might include a sub-category of problems relating to obtaining funding for early stage ventures.

3. THE INTERNATIONAL SURVEY OF EXPERT OPINION

Subsequent to the interview each Key Informant is then asked to complete an extended questionnaire. The objective of this questionnaire is to gather quantitative information on the nine entrepreneurial framework conditions, on entrepreneurial opportunity and capacity, as specified in the GEM conceptual model.

The questionnaire comprises of the following:

• Statements relating to the nine framework conditions and to entrepreneurial capacity, opportunity, respect for entrepreneurs, IP rights protection, and women entrepreneurship (between five and seven statements per category). The five point items measure the expert's perception of the conditions influencing entrepreneurial activity in their country.

• Population survey items. They are the same as those used in the adult population survey and are used to compare the expert's attitudes to those of the general population.

The results of these surveys are summarised by country at individual question level and at section summary level. This allows expert opinion to be compared between countries. A similar approach is used in The IMD World Competitiveness Yearbook 2003.

4. SECONDARY SOURCES

The GEM coordination team provides a database of standard secondary data (for example rates of GDP growth) from sources such as the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development (OECD) and the World Economic Forum. This ensures that all teams are using the same sources for important economic indicators and other national information (such as population, labour force etc) and optimises use of GEM human resources.

Additional Australian sources are also used to supplement the GEM data such as Australian Bureau of Statistics material, and surveys such as the Small Business Index conducted by Sensis ® and the venture capital survey furnished by the Australian Private Equity and Venture Capital Association Limited.

Relevant reports from other sources, both national and international are used whenever they can add insight to the GEM findings.

LIMITATIONS

Like every study, GEM has its limitations. The most obvious one is that entrepreneurship is difficult to measure, especially on a large scale and with consistency between more than 30 countries, speaking many different languages. The quantitative element of GEM therefore concentrates on measuring an activity that is commonly understood across all nations and cultures: owning and operating a business. While many of the businesses identified by the survey will not be entrepreneurial in intent, starting a business is a prerequisite for a genuinely entrepreneurial new venture and thus provides a useful baseline.

The set of experts interviewed in depth changes from year to year. It could be argued that it is not valid therefore to compare either aggregate survey ratings or interview key issues from year to year. This is mitigated by the requirement to choose experts from specific backgrounds, consistent with the nine entrepreneurial framework conditions. In practice, the survey scores from Australian experts have been highly consistent from year to year and, where there has been a change, it is consistent with comments made in the interviews that a particular factor has improved or deteriorated.

Finally, time and resources constrain the amount of material we can include on the website. There are many interesting insights offered by the GEM data and from the expert interviews and there is scope to dig deeper! The GEM Australia team welcomes enquiries from anyone interested in doing so.

NOMENCLATURE NOTE

Most concepts, constructs, variables and indices have standardised names among all GEM participant research teams. However - following methodological recommendations in Hindle (2006) - the GEM Australia team uses nomenclature that currently differs from most other nations with respect to a few items. This position has been adopted due to the potential and actual misinterpretation that has been experienced over the years through using key terms that, in the Australian team's opinion, that inaccurately represent the phenomena they allegedly describe. Table 1 details the terms we use versus they way they are named in the Global Executive Report and certain other nations' reports. We are confident that the Australian nomenclature will eventually replace the use of the older, less accurate terminology.

Table 1 - Two nomenclature differences between Australia, the Global Executive and some other nations' reports
	AUSTRALIAN GEM NOMENCLATURE	EQUIVALENT GEM NOMENCLATURE OF THE EXECTUIVE REPORT AND SOME OTHER NATIONS		DESCRIPTION
	PEP Index (Percentage of Early-stage Participation)	TEA Index (Total Entrepreneurial Activity)		This item measures the percentage of the working-age population participating in either start-up or young business ownership (less those involved in both). It is thus a measure of percentage of early stage participation and that is what we call it. It is simply wrong to call this a measure of ‘total entrepreneurial activity'. So we don't.
	Start-up	Nascent Entrepreneur		This item refers to respondents that have suggested that they been actively engaged in starting a business over the last twelve months and furthermore they have not paid wages for more than three months. The Australian team has always referred to these respondents as start-ups. In 2005 the GEM Global Executive team began to refer to those in this category as nascent entrepreneurs. For consistency in Australia we elect to remain with the term start-up as an accurate description of the activity and a distinguisher from those that are just considering starting a business in the next three years, who could rightly also be called nascent entrepreneurs.
	Young firm	New firm		This item describes the category of businesses whose owners have paid wages for more than three months but not more than 42 months. The Australian team originally was confronted by reader confusion between the terms ‘start-up' and ‘new'. Australian GEM readers were confused because, in their view, start-ups are new firms by definition. The term ‘young' firm more aptly distinguishes a business just beyond the start-up stage.