National Entrepreneurship Observatory

GEM 2006 South West Wales Report

Rural entrepreneurs leading the way in South West Wales

GEM 2006 South West Wales Report (English)
GEM 2006 South West Wales Report (Cymraeg)

Female entrepreneurs, especially those within rural areas, are helping to support the enterprise economy in South West Wales region.

These are the findings of the unique Global Entrepreneurship Monitor study undertaken by Professor David Brooksbank and Professor Dylan Jones-Evans of the National Entrepreneurship Observatory for Wales.

The Global Entrepreneurship Monitor (GEM) was begun established in 1997 as a joint initiative between Babson College and London Business School. It describes and analyses entrepreneurial activity across a large and growing range of nations. Through producing internationally comparable data on the “elusive concept of entrepreneurship”, the GEM study is unique as the only longitudinal study of entrepreneurship undertaken throughout the major nations of the World. The project is supported by European Structural Funds, the Welsh Assembly Government, the University of Glamorgan and Cardiff University.

The latest research from the Observatory shows that the proportion of adults involved in starting and managing a new business in South West Wales was measured at 5.6 per cent, as compared to 5.5 per cent for Wales as a whole. According to Professor Jones-Evans, this was due to a number of key factors:

“In South West Wales, female entrepreneurial activity rate was higher at 4.3 per cent, the same as in 2005. This is higher than the 3.5 per cent measured for the rest of Wales and demonstrates the importance of supporting women in developing entrepreneurial ventures. The study also shows that location is having an effect on enterprising activity.

“Entrepreneurs in more rural areas having more confidence in their skills, knowledge of entrepreneurship from role models, and a lower fear of failure. The difference between South West Wales and the rest of Wales is that those living in South West Wales ‘villages’ are much more likely to feel they have the skills to start a business, and know an entrepreneur, than those living in South West Wales ‘towns’.

“Entrepreneurial activity rate for immigrants is also higher than the average for the UK or immigrants in the rest of Wales. Therefore, whilst the same positive relationship is found between immigration and entrepreneurship for both parts of Wales and the UK, the effect is much greater in South West Wales”. 

However, the type of business being created within the region is worrying, especially if more growth oriented businesses are to emerge to create wealth and employment, according to Professor Brooksbank.

“Independence is the main reason for entrepreneurs across all regions pursuing a business opportunity, with seven out of ten entrepreneurs in South West Wales citing this reason as the key driver in establishing a new business, well above the rest of Wales and the UK. Far fewer entrepreneurs in the region (4.8 per cent) are driven by considerations of increasing income than for the rest of Wales (31.8 per cent) or the UK (19.5 per cent)”.

“This focus on lifestyle over wealth creation may explain the fact that South West Wales lags behind both the rest of Wales and the UK in terms of High Expectation Entrepreneurship, which is an indicator of the prevalence of fast growth businesses within the economy.  The higher level of necessity-driven entrepreneurship, where individuals are pushed into entrepreneurship because all other options to work are absent or unsatisfactory rather than through exploiting a perceived business opportunity, may also be explained by the lower motivations of adults in the region. Therefore, whilst entrepreneurship is buoyant within South West Wales, this finding suggests that this has been partly driven by failings in other parts of the economy of the region”.

Copies of the other regional reports can be found at www.neo-wales.com/publications

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