The Bright Side of Dollar's Decline

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Just in ... The Bright Side of Dollar's Decline. Welcome U.S. News & World Report readers! If you like what you see here, feel free to sign up for our Borderbuster e-newsletter or join us in Chicago on May 15th.

Market of the Month: Chile

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Since the U.S.-Chile Free Trade Agreement (FTA) came into force on January 1, 2004, bilateral trade between the United States has increased over 154 percent.

Chile ended 2006 (latest data) ranked as the 28th largest export market for the United States, climbing from 29th place in 2005, 30th place in 2004 and 35th place in 2003. The United States was the top source of Chile’s imports for 2006 and remained the top destination for Chile’s exports.

U.S. exports to Chile in 2006 increased by $4.07 billion over exports in 2003, growing from $2.72 billion to $6.79 billion, or by 150 percent. Chile has also benefited tremendously from the FTA; U.S. imports from Chile grew from $3.71 billion in 2003 to $9.56 billion in 2006, an increase of 158 percent.

Best export prospects:

1. Construction

2. Computer Hardware/ Software/ Services

3. Electric Power Equipment

4. Mining Equipment

5. Plastics Machinery/ Materials/ Resins

6. Pollution Control/ Water Treatment/ Environmental Services

7. Safety and Security Equipment

8. Telecommunications Equipment/ Services

Find out more information on how to export to Chile here. For U.S. Embassy in Chile, go here.

Small Businesses Nervous Over Local Economy

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That's how I interpret this news feature, "Small Businesses Nervous Over Economy," and mention of The National Small Business Association's 2008 NSBA Survey of Small and Mid-Sized Business.

Check out the news about it here and download the survey, executive summary or backgrounder here.

Show me the money or should I say: "Show me the world for business!" Why was the topic of international expansion NOT covered in this survey?

How To Write Off Defective Imports

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Anne Fisher -- who I have known for years and is one of my favorite senior writers at Fortune and Fortune Small Business magazines -- tackles a tough import question:

My scientific-supply firm imports many of its products from China. Upon checking my last shipment, I saw that about half of the goods had defects. I'm trying to make the vendor replace them or refund my money, but in the meantime, how do I document the goods' disposal to satisfy the IRS?

And we were happy to help with the answer.

Global Investing

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Every adventure begins with an inspiration. This adventure was inspired by a dishwasher.

Indulging a Yen For Global Investing

The Mortgage Bust Goes Global

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Whether good or bad, is there anything or anybody that is not going global? Read more here.

Remember this quote:

“People were proud that a Swiss firm had established such a significant footprint in the most competitive market on the globe,” he said.

Art Goes Global

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Even art is going global. Tokyo's International Art Fair draws collectors worldwide looking for bargains. See a photo slide show here.

Take an additional time out to visit 101TOKYO Contemporary Art Fair 2008.

How To Take On the World

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Well, well, well ... Mr. Malone, Silicon Insider columnist for ABCNews.com, has lots to say on things Washington can do to help the U.S. compete. Here are six of his points.

1. Build up Brand America.

2. Create a Fat Pipe.

3. Revamp Nafta.

4. Promote a Free Internet.

5. Reform patent laws.

6. Make education more open.

And my own ... 7. Help more small businesses take on the world!

Take a good long look at one of his points:

Ultimately, our strongest competitive advantage is the ingenuity and entrepreneurship of the American people. One of the miracles of the last few years is how, in places like Silicon Valley, smart young men and women have still managed to create great new companies in the face of every impediment Congress and the regulatory agencies have thrown at them.

Read his commentary here (took me about a half hour to find). Very interesting.

Small But Global

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Welcome USAToday readers! We are delighted to be quoted in Edward Iwata's article, "Small U.S. Firms Make Big Global Sales," highlighting the wave of small businesses and entrepreneurs going cross-border and selling their wares worldwide.

Don't skip over the left sidebar which offers tips for "Setting Up Sales" and "Fact Finding Helps."

Hope you find the information useful to growing your business internationally.

While you are here ... join me in Chicago on May 15th for an "Exporting For Growth Seminar." More details can be found here.

Falling Dollar Pinches Small Businesses

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Matthew Bandyk from U.S. News & World Report (4/7/08) wrote a good article on how the sliding currency hurts importers and others. We were happy to contribute and thrilled that The Global Small Business Blog was mentioned! Hopefully, many of its readers will join us in Chicago (see below) for the "Exporting For Growth Seminar!"

Retooling your global business strategy is important to do right now if you feel the squeeze from the dollar. Don't wait.

Join Us In Chicago: Exporting For Growth Seminar!

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Please join us at the "Exporting For Growth Seminar" in Chicago at the Donald E. Stephens Convention Center (formerly the Rosemont Convention Center in Rosemont, Illinois) on Thursday, May 15 from 11:00 a.m. until 4:30 p.m.

Hosted by UPS and the U.S. Commercial Service, the complimentary seminar will help you tackle global trade.

I will be moderating a panel discussion with local small businesses on the secrets to success for engaging in global trade and would welcome a chance to meet you in person. See you there!

To learn more and to register (it's complimentary), visit: Exporting For Growth Seminar.

In a Recession, Dare To Be Different!

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Wrote this piece, "5 Tips to Recession-Proof Global Marketing," that was published in Modern Postcard News. Here's a glimpse of No. 5:

Dare To Be Different

Cut loose and do something wild. Show some energy! Look alive! If you were offered the same product at the same price by salesperson A and salesperson B, but salesperson A gave a presentation that made you smile, who would get your order? Put a sense of fun into your global marketing efforts. Send eye-catching subject lines in your emails that add spice to routine communications. Phone your customers once in awhile so they can hear your voice and know they're dealing with a human being. Send flowers with your product catalog tucked inside. Have a friend take a goofy photograph of you toiling up a sunny hillside with your product strapped to your back, caption it with something like "Things are looking up —thanks for your business!" and mail it postcard-fashion. Good will and good humor keep us all going, especially in a poor economy —so don't be afraid to get a bit wacky. It will capture your customers' attention and set you apart from the crowd.

Hope it helps keep your sales strong (especially exports!) during a sluggish global economy.

Made in USA News

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What a great title for news and I wonder whether the weak dollar helps or hurts their business.

Pretty comprehensive article in the Wall Street Journal today entitled, "U.S. Slump Takes Toll Across Globe." It covers a lot of ground, including a mention of how the United States is fairing on growth versus last year, where it's at currently and what to expect in 2009. Looks to me like we are going to take a blip (dip?) in growth this year and then a nice bounce in 2009 (recessions typically last about eight months even though it may feel like forever).

The expression that when the U.S. sneezes, the rest of the world catches a cold may apply here though several countries still seem to be moving full speed ahead despite bad news from USA: Australia, Brazil, the United Arab Emirates and Qatar are growing but not as briskly as in 2007.

Be sure to check out the full growth projections (GDP) chart based on country and region.

A Cooler Planet

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In an attempt to create ecofriendly homes for their families and finding obstacles at every turn, the siblings -- Heidi Bailey and Krista White who are poised to save the earth -- became environmental experts.

Agreeing that green living should be simple and accessible, they researched like crazy and opened A Cooler Planet, an ecolifestyle store in the heart of Roscoe Village (Chicago, Illinois). Find something you (and they) love at every turn and respect the fact that each item featured is considered sustainable, local, fairly-traded, organic, renewable, recycled, and eco-conscious.

Learn more about their initiatives here.

Free Rice Anyone?

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FreeRice is a sister site of the world poverty site, Poverty.com.

FreeRice has two goals:

1. Provide English vocabulary to everyone for free.
2. Help end world hunger by providing rice to hungry people for free.

This is made possible by the sponsors who advertise on the site.

Whether you are CEO of a large corporation or a street child in a poor country, improving your vocabulary can improve your life. It is a great investment in yourself.

Perhaps even greater is the investment your donated rice makes in hungry human beings, enabling them to function and be productive. Somewhere in the world, a person is eating rice that you helped provide.

Get started here.

Earth Hour Goes Global

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On Saturday, March 29th, between the hour of 8:00-9:00 p.m. CDT in Chicago, I witnessed the dimming of the magnificent city lights in honor of Earth Hour US (catch the video here).

I thought by heading over to the Adler Planetarium, where some of the best sights of the Chicago cityscape can be found, there would be no one around. Boy was I wrong. Not only were there hundreds of cars lined up with the same idea but even NBC Channel 5 had their cameras in toe.

More than 30 million people spanning across 35 countries were expected to turn off their lights for 60 minutes during Earth Hour. Did you?

Read more about it here. And see what you can do about it all the time here.

Floating Atop A Secluded Cliff

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How's that for daydreaming? I don't know about the rest of you but the weather in Chicago has been so nasty over the past five months that I am ready for not just Spring but a HUGE vacation. Spotted this and thought everyone -- whether in Chicago or China -- could use a little virtual spa treatment. Doesn't this look simply magnificent? And it is global.

Import Compliance, Busted!

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Thought we'd turn the tide from exports to imports and see if any of you see yourself in these myth scenarios relating to import compliance. Take a peek.

Export Boomcountry

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Surging American exports lighten the gloom. As the dollar skids, small businesses manage to hit a home run with exports. Thank goodness we knew this was coming. Read more here.

One World, One Car, One Name

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The Ford Fiesta, after flopping in the U.S. in the '70s and selling well in Europe ever since, is set to go global.

No matter the market, the Fiesta it is.

Is Your Export Business Recession-Proof?

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We ran parts of this in separate Ask the Expert entries but thought you'd like to capture it again in one article over at Small Business Trends.

NAFTA: A Curse or a Blessing?

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It's the politics, stupid. When it comes to the US economy, trade has replaced the devil as the reason things go bad.

A Fortune magazine poll conducted this January asked Americans what the most important reason for the recent economic slowdown was. The largest number—28 percent—answered "losing jobs to economies where labor is cheaper" and an additional 7 percent mentioned "foreign competition." Fully 78 percent of the respondents said that trade has made things worse for American workers.

Is NAFTA a curse or ... you decide.

Audacity of Hope on Free Trade

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A provocative commentary published in the New York Times (3/16/08) and authored by N. Gregory Mankiw, professor of economics at Harvard. He was an adviser to President Bush and advised Mitt Romney in his campaign for the Republican presidential nomination.

Beyond The Noise On Free Trade

Like what you read? Pay a visit to Mankiw's blog.

Happy St. Patrick's Day!

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You don't have to be Irish to celebrate St. Patrick's Day -- my favorite day of the year! You just need a little "spirit" to make it something special.

Ireland, Sir, for good or evil,
is like no other place under heaven;
and no man can touch its sod
or breathe its air without becoming
better or worse.
~ George Bernard Shaw

I will be thinking of all of you as I toast the night away.

Enjoy! Erin Go Bragh (Ireland Forever)!

Just in (3:19 p.m . CDT) ... St. Patrick's Day Parades Go Global. A hat tip to our Borderbuster newsletter editor Bob Marovich for letting us know about it.

Open That Bottle Night (OTBN) Goes Global

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Think a product, service or concept can't go global? Guess again.

Wine columnists John Brecher and Dorothy Gaiter share stories from 'Open That Bottle Night' and discuss how the event has gone global.

Read all about it here.

America Is the World's No. 1 Exporter!

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January 2008 exports rose to $148 billion.

WASHINGTON (3/11/08) -- U.S. Commerce Secretary Carlos M. Gutierrez today issued the following statement on the release of the January 2008 U.S. International Trade in Goods and Services report by the Department’s Census Bureau and the Bureau of Economic Analysis. Today’s report shows that U.S. exports increased by 13.1 percent to $1,649 billion in the 12 months ending January 2008 over the prior 12 month period. Imports also increased 6.8 percent to $2,359 billion and the trade deficit narrowed 5.5 percent during the same time period.

Here's more on why we are No. 1.

When Are Emerging Markets No Longer Emerging?

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When you think of emerging, what comes to mind? I think about something evolving on its own. It moves from informal to formal and begins to develop, grow and eventually prosper.

The folks at Knowledge at Wharton have a whole new way of determining what emerging means when it comes to country development.

It's definitely worth a look.

A Perfect 8.3 = GREAT

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Happy to hear The Global Small Business Blog (GSBB) received an 8.3 score out of 10 in the Business/International Business category at Blogged.com. The rating is based on the following criteria:

• Frequency of updates.
• Relevance of content.
• Site design.
• Writing style.

Ms. Amy Liu at Blogged notified us last night and said, "This is quite an achievement. Please accept my congratulations on a blog well-done!"

We are honored and thrilled about receiving this exciting award! Many thanks to the folks at Blogged for including us. It just puts more wind behind our sails. At Technorati, our rank is #137,774 out of 112.8 million blogs!

By the way ... we are currently working on a site redesign.

Overseas Adventures in Advertising

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When it comes to advertising, what's funny in one culture can seem ill-mannered in another.

Globalizing Apple's ads meant tweaking characters, clothing and body language.

Going Global By Going Green

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Which comes first: going global (global strategy) to get green or going green (green strategy) to get global? Trick question. Find the answer (sort of) here.

Good Health Without Borders

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As you grow your business globally, you'll most likely -- within a year -- make a trip or two overseas to meet with suppliers or customers to seal a deal.

To ward off any potential health risks before you take off, check out these places for help.

The Centers for Disease Control and Prevention

The International Society of Travel Medicine

Happy, healthy travels!

Small Businesses Go Global

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Better late than never. It pays to have a doctor checkup once in a while. That's where I spotted this.

As reported in U.S. News & World Report:

Small Businesses Go Global

Tips for Small Businesses Looking Abroad

How Small Italian Firms Married Style to Globalism

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I love this article that was published in the Wall Street Journal on Monday because it's about how a small wedding-dress maker Giovanna Sbiroli SRL built its brand and customer base by serving the Italian market and then realized that if they did not go global -- aggressively and soon -- they risked having to shut their doors. But they didn't. Here's why.

There is a Global Small Business 101 lesson for all of us in this.

Special thanks to Rosamaria Mancini who wrote the quality piece for the WSJ.

PayPal Jumps on the Global Band Wagon

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Not sure if you have to be a registered PayPal user to access this. Needless to say it's all about PayPal jumping on the global band wagon and offering advice on:

Why export?
How to go global with the PayPal guide to selling overseas.

Globalization and Cultural Diversity

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Is globalization making the world more homogeneous? And if so, does Hollywood share the blame?

Does Spider-man play into this?

Find out here.

Global Education

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Knowledge is power. Kick it up a notch for the education of globalization. More universities are taking it seriously and offering programs to help individuals do business and innovate with different cultures.

Young Student Entrepreneurs Take On the World

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Global Student Entrepreneur Awards (www.gsea.org). The GSEA program recognizes the world's outstanding undergraduate student entrepreneurs. Eligible students can visit the website to download an application form for the 2008 awards.

Collegiate Entrepreneurs' Organization(c-e-o.org). CEO is the premier global entrepreneurship network servicing chapters at 134 colleges and universities. Students can register online for the national conference.

Students in Free Enterprise (sife.org). SIFE is a global nonprofit group active in more than 40 countries. Through regional and national competiions, SIFE presents awards in its core areas of market economies, entrepreneurship, personal financial success skills and business ethics.

Young Money (youngmoney.com/entrepreneur). The website's entrepreneur channel features expert advice, student profiles and small business calculators.

Exporting: The Dollar's Upside

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Boom time for small business exporters.

Social-Networking Sites Going Global

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MySpace, Facebook and other social-networking sites aren't just slugging it out for customers in the USA. They're expanding aggressively overseas, where a vast majority of Internet users live.

Find out more here.

And don't forget to join our new wiki.

Next-Gen Artisans Fuel New Entrepreneurial Economy

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Another one of my favorite reports has just been released: The third installment of the Intuit Future of Small Business Report™, which looks ahead 10 years and examines the prospects, influences and profiles of small business. The report is sponsored by Intuit Inc. and authored by the Institute for the Future.

Check this out:

The Next Wave of Globalization Will be Driven by Small Business

The number of U.S. small businesses trading globally will substantially increase, fueled by cross-border business opportunities, technological advances leading to broader social networks, and reductions in export costs. More specifically:

• Almost half of U.S. small businesses will be involved in global trade by 2018. As the costs associated with doing business globally continue to decrease, small businesses will make no distinction between domestic and international commerce.

• Social networks will fuel borderless commerce. Online and offline social networks will help remove soft trade barriers, such as language and cultural differences. These networks will introduce small businesses to new markets and facilitate cross-border trade.

• Globalization will increase small business diversity and amplify its economic value. Small business diversity will help increase market growth in the U.S. and abroad and will unlock new opportunities for all small business owners.

Clearly, borderless business is going to become BIG.

Special kudos to the main authors of the report: Steve King, Anthony Townsend, and Carolyn Ockels who also, in addition to writing the Intuit report, publish a nifty blog at Small Business Labs.

For a shortcut to the report, visit here and look for Phase Three: The New Entrepreneurial Economy.

Note: We contributed a tad to the report.

Going Online to Lure Foreign Shoppers

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Retailers in the U.S. are turning to the Internet to sell to shoppers abroad in hopes of easing the pain of an economic slowdown at home. As featured here -- preview only unfortunately -- in the WSJ 2/8/08.

When I read the article entitled, "Going Online to Lure Foreign Shoppers," I could not help but think of the days when Sears Roebuck published the one and only world's largest print catalog offering everything from toys to garden supplies to the best all cotton underwear for the entire family. These two clips provide context on what I'm talking about: Sears archive and a book about the catalog. If the catalog were still around, you can bet Sears would be thinking about luring foreign shoppers to it.

Could it be that retailers are just now thinking along the same line as Sears back then? Isn't that what Amazon has become: the world's biggest online catalog? Sears had its global day in the sun too (refer here when they formed a Sears World Trade company in the 80s) attempting to become the world's biggest global supplier but it fell far short of shareholder expectations. Since they had the global suppliers already in place, why not offer retail products on a wholesale basis to the world? Sounded like a good idea at the time but it didn't work out. One forgets just how complicated it can be. Even now with supplier chain management tools in place it's difficult to manage.

Where am I going with this? Don't think about piece-mealing exports on your products through someone else's efforts. Say you sell Macy's. And Macy's is thinking about luring more international customers to its online store (as the article states). Great. You see more of your widgets sold all over the world so how could you not be happy about that? Now you can attend business networking events and claim you are really, really global instead of just global -- through Macy's initiatives, that is.

But wait a minute. Wouldn't you rather sell a million units of your own product to a key customer in an overseas market and pocket the profit than sell a handful of units a month through Macy's and share in the profit? Just think what happens when you open up to other market opportunities?

One of the ways I moved a lot of products -- a couple of 40 ft. containerload quantities every month -- back in the days when I was exporting gourmet foodstuff was to work with importing wholesalers in foreign markets where I wanted to sell products. Those importing wholesalers sold to all the mass merchandisers, independent mom and pop stores and supermarket chains in their homeland. All I had to do was get product to them for marketing and distribution! My oh my was I on a roll and a very fulfilled small business exporter.

And you can be too. Regardless of whether you are selling direct or indirect, your customers will tend to fall into five categories: overseas agent or representative (importer), distributor or importing wholesaler (which mine were), overseas retailer, overseas end-user, and trading company.

Take a look here at how the process is managed.

6 Questions For Your Global Shipper

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I wrote an article, "Leaving the Country" for PARCEL magazine that talks about the reluctance of small businesses to expand their businesses internationally and why. One of the key concerns that always rises to the top of the heap is: "How will I ship my product? I'm clueless."

That issue is addressed near the end of the article with six questions small businesses should ask to help find the right shipping partner.

No. 1: Are you familiar with my industry and the markets where I want to do business?

The article along with the other five questions can be found here.

Got the Urge to Go Global?

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Well you've come to the right place -- that's for sure!

Read about how a chief executive plans to take the Harlem Globetrotters more global.

Global Misunderstandings

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Fascinating stuff! Don't miss a bit. I even added my own little story to the discussion list of working with people around the globe. Add yours too, if you have the time.

Here's the originally published article: Global-Market Woes Are More Personality Than Nationality. Quite a few people thought Jared, the author, was way off base. What do you think?

New GlobeTrade Community Wiki!

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Please join us on our new GlobeTrade Community Wiki (http://globetrade.wetpaint.com/) -- your place to build, connect, communicate and grow global with your peers!

We hope you like what you see, learn a lot in the process and discover there are no boundaries to growing your business.

Sign up (takes just a minute). Create a profile. Add your photo. And start net-borderbustering.

Ask For The United States Dollar Rate

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This never would have occurred to me. Dependent upon where you are traveling to or from, ask for the U.S. dollar rate if it's to your advantage. Good idea. And another interesting tip mentioned in the same article is the Small Luxury Hotels of the World where they do allow you to ask for U.S. dollar rates but not so sure -- even with the weak dollar -- the room rates are affordable to all global small business owners. Worthwhile read though.

Gear Up For Globalization: Answers From Real People (#3)

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Question from:

Laurel Delaney, Founder and President, GlobeTrade:

"Do you think Ex-Im Bank will cut back or be more willing to extend loans to SMEs (that qualify on exports) this year in light of a possible recession?"

Answer from:

Tess Morrison, Director, Illinois International Trade Center, University of Illinois, College of Business, Champaign, Illinois.

"Exim (and SBA) will not cut back for SMEs, whether or not there is a recession. Exim is committed to serving at least 20% of their business as SMEs.

All companies need to adhere to the financial guidelines, but they have as much to do with the buyers as the sellers. Exim must (by law) act as a bank. For example, they can only do business where there is a reasonable expectation of repayment. The onus is on the buyer. Otherwise, we, the U.S. taxpayer has to pick up the slack. Exim looks at the seller to make certain that they do not appear about to go under (to give an excuse to not repay by the buyer.) Exim is committed to SMEs."

Delaney (clarification):

"So Exim will not be in the same league as all the other banks on being super cautious with loans to SMEs due to the mortgage meltdown?"

Morrison:

"That's correct. They don't do the same kind of lending as regular banks. Their focus is on the buyer being able to repay so that we the U.S. taxpayer isn't stuck with the repayment."

Note: I am still waiting to hear back from two other experts (one from Chicago and one from headquarter office) at Exim Bank on the same question.

Weak Dollar Has Small Businesses Thinking Globally

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The New York Times now reports on how the weak dollar has small businesses thinking globally. If you make your products in the U.S.A., think exports.

A hat tip to friend and colleague John Yunker at the Global By Design blog for the nudge.

Up next: Another guest expert weighs in with her comments about the 'R' word tomorrow. Stay tuned.

Just Go For It: Take Your Business Global!

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I participated in this fabulous program UPS (along with Inc. and IBM) put on in November. I can't encourage you enough to take the time to listen to these podcasts where global small business owners share their successes that will inspire and empower you to take your business to the next level: global. If you can't tune-in to all of them, pick one or two that appeal to your interests.

And don't forget to download and read the invaluable Business Monitor Reports (refer to the upper right hand side of the site) to find out what's really holding small businesses back on going global.

GEM 2007 Executive Report: Six Questions With GEM Research Director

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I had the great pleasure to thoroughly read the GEM 2007 Executive Report again over the weekend. If you haven't already, I suggest you do so here. It is a gem -- filled with all sorts of amazing insights on the state of early-stage entrepreneurship. After digesting it all, we reached out to I. Elaine Allen, PhD, Research Director, Arthur M. Blank Center for Entrepreneurship, Associate Professor of Statistics & Entrepreneurship, Babson College to ask her a series of questions about it since she is largely responsible for directing its research and contents.

We narrowed our questions down to six so it becomes a little like Cliff Notes -- providing you with a fresh take on the report. We thank Babson College (especially Elaine for her valuable time), the London School of Business and all the university teams from each participating country for their hard work on this immensely complex topic concerning the role of entrepreneurship in national economic growth. Here are the questions along with Elaine's responses.

1. Question: How is it possible for low-income countries to exhibit such high rates of early-stage entrepreneurial activity?

Answer: In our survey we divide early stage entrepreneurship into Necessity-driven entrepreneurs who are pushed into starting companies because all other options for work are either absent or unsatisfactory and Opportunity-driven entrepreneurs who start companies to exploit a business opportunity. In low-income countries, Necessity entrepreneurship is driving individuals to start companies. These high rates do not incorporate the value or potential revenues of the new company so these may be quite small endeavors started with micro-financing. Our definition of early stage entrepreneurship is nascent entrepreneurs who plan to start a company in the next three months or have a new company less than three months old that is not paying wages and new entrepreneurs who have companies less than 42 months old.

While the dichotomy between low/middle and high-income countries is striking, there are also dichotomies that remain in all countries between male and female entrepreneurship. While rates are lower for female early stage entrepreneurs in all countries, in low/middle-income countries the motivation is almost entirely necessity while in high-income countries women are opportunity motivated entrepreneurs who cite independence, rather than increased income, as their reason for starting a company.

2. Question: Why does the United States exhibit such high rates of early-stage entrepreneurial activity? What's leading that surge?

Answer: When you look at our figure of the rate of entrepreneurship plotted versus the GDP per capita, in general you see a U-shaped curve with high rates of early entrepreneurship in low/middle income countries, very low levels of entrepreneurship in most high-income countries but an increase in entrepreneurship rates as you move to countries with some of the highest rates of entrepreneurship, such as the US, Iceland, and Hong Kong. This pattern has persisted throughout the 10 years of the survey. Reasons for the US continuing high rate of entrepreneurship can be partly explained by cultural values but economically it probably has to do with some of the lowest levels of perceived ‘red tape’ involved in starting a business and also the lower cost involved in starting a business in the US compared to other high-income countries.

Although the US rate is high for high-income countries (it ranks 3rd behind Iceland and Hong Kong with a rate of early stage entrepreneurship of about 10%), it is in the middle of the pack among all countries where there the highest rates are in Peru and Venezuela (greater than 20%) and the lowest rates in Austria and Sweden (less than 3%).

3. Question: How does an individual's perception affect his/her ability to start a business in the area where they live? What factors are involved?

Answer: We see in our survey that both individual perceptions and contact and familiarity with business and other entrepreneurs have a great deal to do with whether you start a company. A low perception of any fear of failure is key to becoming an entrepreneur and knowing an investor in early-stage companies or other entrepreneurs is cited as a reason for starting a new business.

When we examine entrepreneurship regionally and in cities across the world, a slightly different picture of entrepreneurship appears as rates of entrepreneurship are very high in some of the high-income countries. The Top 10 cities for entrepreneurship are: Bangkok, Buenos Aires, Chicago, Auckland, Los Angeles, Toronto, Melbourne, Sydney, New York, and Hamburg. A new initiative starting in 2008 by GEM will be a closer examination of cities and entrepreneurship to identify what the business sectors are for early stage entrepreneurs and what their characteristics (immigrants, education, age, income) might indicate.

4. Question: If you could lump it into one thing, what is the single greatest factor that keeps an individual in any part of the world from starting a business? What's the one thing that entices them to get them started?

Answer: It is hard to pick just one thing that discourages someone from becoming an entrepreneurs but perhaps the two most important are access to capital and being employed. Access to business funding is interesting because the overwhelming majority of early stage businesses are funded by the founders own money or money from family and friends, even in countries with strong programs and policies to encourage entrepreneurs. The GEM survey (through a separate survey of experts in entrepreneurship worldwide) has found that it takes a long time for individual entrepreneurs to learn and take advantage of government programs designed to encourage entrepreneurship.

A final big factor is the perception that most early-stage businesses will fail. The GEM Survey shows, by comparing the rates of early and established entrepreneurship, that in some countries the conversion rate for businesses (how many new business last longer than 42 months) can be as high as 80%. In the US, our survey estimates this to be between 45% and 60%, a much higher than is often quoted.

Being employed is a counter-intuitive finding and is strongest in low/middle-income countries. Having a job (even part-time employment) is highly correlated with perceiving lower risk levels in starting a business. One interpretation of this is that being employed allows an individual to understand the market and business better as well as coming in contact with other entrepreneurs and acquaintances who could invest some money in a new business.

If we examine motivations in high-income countries, such as the US, it is clear that individuals start a business when an opportunity is seen in an area with few competitors and fast growth. The ability to use new technology and the view that this may include globalization also appear to drive US entrepreneurs.

5. Question: How does an open international trade system -- sales to other countries -- benefit entrepreneurs?

Answer: Our survey asks early-stage business owners as well as established business owners to estimate how much of their business will be from other countries and we classify a business as being ‘global’ if at least 25% is not in their country. There is an inverse relationship between the World Bank’s classification of a country’s barriers to international trade and its rate of entrepreneurship. Also, those companies that have identified global marketing as part of their early-stage entrepreneurship, also are more likely to have plans for higher growth and higher revenues.

6. Question: Based on the GEM 2007 Executive Report findings, what does the future hold for global entrepreneurs?

Answer: Global entrepreneurship continues to grow and countries with very low rates of entrepreneurship like Japan and the Netherlands have seen increases in early-stage entrepreneurship over the last 5 years (Japan, 2.0% to 4.3% and the Netherlands, 4.0% to 5.2%). The US rate has been stable (between 10% and 12% over the last 5 years) with some gender trade-offs in growth by more women entrepreneurs starting businesses.

The World Trade Organization and the World Bank’s figures predict a growing global economy with increased open international trade. Micro-financing in low/middle-income countries is clearly responsible for some of the high rates of early stage entrepreneurship in these countries but this may also be due to an increased number of countries embracing national policies encouraging company start-ups while a reduction of red tape in some high-income countries with very low rates of entrepreneurship (i.e.; Greece and Belgium) may increase start-ups in these countries.

Just in (1/31/08): Due to our summary report featured here, we have been added to the Babson College press release.

Updated (2/6/08): Elaine Allen's podcast with BusinessWeek online about GEM. It's headlined "What Helps and Hinders Entrepreneurs."