Key Variables

• SUBOANW: Nascent entrepreneur

• BABYBUSO: Owner-manager in new firm

• ESTBBUSO: Owner-manager in established firm

• TEAYY: Involved in early-stage entrepreneurial activity (in year 20yy)

• DISCENTYY: Has abandoned, discontinued or quit (but not sold) owning-managing a firm in the last year
  

For years, GEM has focused on the phase that combines the stage in advance of the start of a new firm (nascent entrepreneurship) and the stage directly after the start of a new firm (owning-managing a new firm). Taken together this phase is denoted as “early-stage entrepreneurial activity” (TEA) . In addition, individuals involved as owner-managers in established firms are identified. These categories discerning phases of entrepreneurship are not easily derived from the GEM questionnaire. 

Two main selection questions are used for identifying individuals who are currently starting a new firm. The exact phrasing of these questions is as follows:

• Are you, alone or with others, currently trying to start a  new business, including any self-employment or  selling any goods or services to others?

• Are you, alone or with others, currently trying to start a new  business or a new venture for your employer as part of your  normal work?
  

In case the respondent answered “YES” (1) OR “DON’T KNOW” (-1) to either of the two questions, further information is solicited to establish whether the individual can indeed be classified as a nascent entrepreneur. First, it is required that the individual has conducted any concrete activities over the past 12 months. Second, the individual should be one of the owners, or the sole owner of the business-in-gestation. Finally, it is established if the business is indeed still in the nascent stage; if any financial payments have been made into the firm for more than the past three months, the business is considered to be beyond the nascent phase and the individual is ‘reclassified’ as an owner-manager of an existing business. In this case, the first year of wages will be asked; this is also used for making the distinction between owner-managers in new firms and those in established firms.

Further screening for nascent entrepreneurs:

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

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

• Has the new business paid any salaries, wages, or payments in kind, including your own, for more than three months?
  

A similar procedure holds for those owning and managing a business that is up and running. Here the main selection question is as follows:

• Are you, alone or with others, currently the owner of a business you help manage, self-employed, or selling any goods or services to others?