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What are entrepreneurial skills?

Entrepreneurship is ‘an individual’s ability to turn ideas into action. It includes creativity, innovation and risk-taking, as well as the ability to plan and manage projects in order to achieve objectives’ . It is seen as vital to promoting innovation, competitiveness and economic growth . Fostering entrepreneurial spirit supports the creation of new firms and business growth. However, entrepreneurship skills also provide benefits regardless of whether a person sees their future as starting a business3 . They can be used across people’s personal and working lives as they encompass ‘creativity, initiative, tenacity, teamwork, understanding of risk, and a sense of responsibility’ .

What constitutes entrepreneurship skills has been the subject of much discussion. Unlike other important economic skills, entrepreneurial skills are not related to a specific occupation, discipline or qualification. However, the greater emphasis on entrepreneurship education and developing entrepreneurial skills has brought more analysis and agreement of entrepreneurial abilities and competencies.

The OECD has identified three main groups of skills required by entrepreneurs :

·         Technical – communication, environment monitoring, problem solving, technology implementation and use, interpersonal, organisational skills.

·         Business management – planning and goal setting, decision making, human resources management, marketing, finance, accounting, customer relations, quality control, negotiation, business launch, growth management, compliance with regulations skills.

·         Personal entrepreneurial – self-control and discipline, risk management, innovation, persistence, leadership, change management, network building, and strategic thinking.

These combinations of the skills, competencies and attributes are required variously by commercial managers and creative workers . In addition, entrepreneurs require knowledge of the sectors in which they operate (i.e. an IT, construction or catering entrepreneur will require knowledge of those specific sectors or occupations).

Current levels of entrepreneurship skills

There is little information available to measure the level of these skillsets, so entrepreneurship is usually measured by proxy indicators, such self-employment and business creation rates8 . Figure 1 shows the percentage of self-employed people in each EU-28 country in 2013. Across the EU-28 as a whole, 14% of workers are self-employed, although this varies considerably between countries. In four countries – Luxembourg, Denmark, Estonia and Sweden – fewer than one in ten people are self-employed. However, more than one in five workers in Italy and nearly one in three workers in Greece are self-employed.

 Figure 1 – Levels of self-employment, EU-28, 2013

Figure 2 – Preferred employment status (self-employed), EU-28, 2012

to more than half in Brazil, China, Korea and the United States9 . Figure 2 shows that, across EU-28 countries, the proportion of workers preferring to be self-employed ranges from over 50% in Lithuania, Croatia and Greece to less than a quarter in Sweden and Finland.

Just under one third of (non-self-employed) Eurobarometer respondents (30%) thought it would be feasible for them to become self-employed. This ranged from around half of respondents in Latvia, Sweden and Poland to around one on five in Spain, Malta and the Czech Republic. The above does not necessarily mean that certain countries are more entrepreneurial than others. Proxy indicators of entrepreneurship, such as

Figure 3 ­– Not enough skills to be self-employed (employees), EU-28, 2012

new business densities, self-employment rates and the desire to become self-employed are not related within individual countries. For example, Luxembourg has the lowest self-employment rate (8%), but has a high density of new business creation (21%). Italy has one of the highest self-employment rates (22%), but a low new business density (2%).

Where self-employment is not an option, individuals typically cite practical concerns such as job security, lack of capital/financial resources and the current business climate rather than their own entrepreneurial skills. In 2012, only 6% of EU-28 employees believed that they lacked the skills to become self-employed. This rate was higher in some Eastern and Central European countries (see Figure 3). However, Lithuania, Latvia, Bulgaria, Romania, Estonia, Poland, Slovakia and Slovenia all had business birth rates higher than the EU-28 average in 2012.

Other cross-national research suggests entrepreneurial experience, fear of failure and perceptions of business opportunities are important for business creation. Experience (and being able to learn from experience) is also important in developing entrepreneurial skills and competencies.