Global Entrepreneurship Monitor 2008 ENTREPRENEURSHIP IN BRAZIL Executive Summary SPONSORSHIP Curitiba 2009 COORDINATION OF INTERNATIONAL GEM Babson

College Universidad del Desarrollo Glob al Entrepreneurship Research Association (Gera) TECHNICAL STAFF Coordination and Implementation Carlos Artur Krüger Passos Juliu s Caesar Simara Maria Felix de Souza Silveira Paulo Alberto Bastos Junior Greco Joana Paula Machado Rodrigo Gomes Marques Silvestre Consulting Project Marcos Mu eller Schlemm Authors Carlos Artur Krüger Passos Risset Denise Rinaldo Cesar de Camargo Julio Joana Paula Machado Cesar Felix Marcelo Xavier Rhea Maria Lucia Go mes de Figueiredo Paulo Alberto Bastos Junior Meza Rodrigo Gomes Marques Silvest re Sieglinde Kindl da Cunha Simara Maria Silveira de Souza Lucia Greco Yára Mazz iotti Bulgacov Field Research with Adult Population Bonilha Communications and M arketing S / C Ltda. Cover Juliana Scheller - Art Carolina Duarte - Layout Flávi o Brandão - Review and Photo Layout Thomas Eon Barreiros Maria Julia Jacubiak GEM PROJECT BRAZIL EXECUTING INSTITUTION Brazilian Institute of Quality and Productivity (IBQP) Car los Artur Krüger Passos - Chief Executive Officer Julio Cesar Felix - Chief Oper ating PARTNER INSTITUTIONS Brazilian Service to Support Micro and Small Enterpri ses (Sebrae) Paul Tarciso Okamotto - Chief Executive Officer Luiz Carlos Barboza - Technical Director Carlos Alberto dos Santos - Director of Administration and Finance Enio Pinto Duarte - Unit Manager Service Individual National Service of Industrial Learning (Senai / PR) Rodrigo Costa da Rocha Loures - Council Presid ent John Baker Lim - Regional Director of Social Services Industry (Sesi / PR) C osta Rodrigo da Rocha Loures - Regional Director Jose Antonio Perez - Chief Supe rintendent Positivo University Oriovisto Guimaraes - President Jose Pio Martins - Vice-Rector Luiz Hamilton Berton - Provost of Graduate Studies Pontifical Cath olic University of Paraná (PUCPR) Ivo Juliatto Clemente - Rector • Entrepreneurship in Brazil in February 2008 - Executive Summary WHAT IS GEM? Conceived in 1999, the Global Entrepreneurship Monitor (GEM) is the largest rese arch project on entrepreneurial activity, covering over 60 countries with interc ropping unquestionable representation in economic terms (approximately 95% of wo rld GDP) and population (more than two thirds of world population). The results of the GEM offers have been reflected and influenced in a positive way in the fo rmulation of policies, programs and institutional actions aimed at supporting th e development of entrepreneurial activity across countries. These indirect effec ts are achieved by the project from their own purposes, which are to constantly deepen the knowledge and understanding of entrepreneurship through the productio n and maintenance of data, information and indicators that reflect reality and t o enlighten the entrepreneur and the factors involved in this dynamic in each co untry in a comparative way. alignment proposed by the international coordination of GEM, the theme of Entrep reneurship Education and deserved special attention. Two important new themes in corporated into the traditional analysis conducted by the GEM research in Brazil : Intrapreneurship and uptake of innovation and technology by the population.

OVERVIEW AND EVOLUTION OF ENTREPRENEURSHIP IN BRAZIL Brazil has occupied the 13th position in world ranking of entrepreneurship condu cted by GEM in 2008. The rate of early-stage entrepreneurs (TEA), a Brazilian wa s 12%, meaning that for every 100 Brazilians in adulthood (18-64 years) performe d some 12 entrepreneurial activity until the time of search. This rate is relati vely close to the historical average Brazilian, which is 12.72. For the first ti me since the survey began in Brazil, the country was outside the group of ten co untries with higher rates of entrepreneurship. The change is mainly due to chang e in the number of countries participating in GEM research in 2008 and does not necessarily mean a worsening on Brazil. Countries such as Bolivia, Angola, Maced onia, and Egypt held the GEM research the first time this year and took up posit ions among the ten countries with the highest rates of entrepreneurship. The TEA presented by Brazil in 2008 was close to the rates obtained by Uruguay (11.90) and Chile (13.08) and also similar to that presented by India (11.49) and Mexico (13.09). The countries of Latin America and the Caribbean were the most enterpr ising in the round of the GEM research in 2008. Bolivia took first place with a TEA of 29.8%, Peru ranked second in the ranking, with a TEA of 25.6%. At the oth er extreme of the ranking, we can observe that the last places were occupied by European countries, with Belgium,€in last place, preceded by Russia and Germany. Information on the five 1) Entrepreneurs are those whose early ventures have until 42 months of life (th ree years) for a period that literature considers capital for the survival of a business (GEM, 2006). These entrepreneurs make up a charge, known as TEA and sub divided into two types: spring, those ahead of deployment in business - search o f space, choice of sector, market survey, etc.. - That if they came to create re muneration, made for less than three months, and new, whose businesses are alrea dy in operation and generated pay for at least three months. Entrepreneurs are t hose set out in front of enterprises with more than 42 months of life. Entrepreneurship in Brazil in 2008 - Executive Summary • The GEM IN BRAZIL The Global Entrepreneurship Monitor (GEM) in Brazil in 2008, completed nine year s of uninterrupted publishing, becoming a valuable archive of information that r eveal details about the behavior of the Brazilian entrepreneur. The Brazilian In stitute of Quality and Productivity (IBQP) as the executing institution GEM Proj ect Brazil, has made efforts for research to gain greater recognition of public and private organizations and has received increasing support. Are involved in t he project: the Sebrae, chief sponsor of the research, Sesi / PR, Senai / PR Plu s and the University, as technical partnership, professionals responsible for te chnical analysis, the technical team of the Entrepreneurship Program and the cit izens of IBQP Brazilian researchers who annually receive and provide information that guide the direction of entrepreneurship in the country. 2008 EDITION The ninth edition of the GEM research in Brazil following his career, consolidat ing its position as one of the most important studies on entrepreneurship in the country. As has been said on other issues, the research methodology is improved every year and every year a new look to the entrepreneurial phenomenon is broug ht into the report. This year, in line with the 3 countries with the highest TEA and the last five countries are shown in Table 1. The difference in ASD between the first and last ranking of the GEM research in 2008 was about ten times, which shows a great heterogeneity in entrepreneurial conditions in the world (Figure 1). TABLE 1 - COUNTRIES WITH HIGHER RATES OF ENTREPRENEURSHIP AND MINORS IN THE WORL D Higher rates COUNTRIES Angola Bolivia Peru Colombia Dominican Republic Average G roup Rates Lower Denmark Russia Romania Germany Belgium Group Average 4.04 3.98

3.77 3.49 2.85 3.63 39 40 41 42 43 138,000 583,000 1,950,000 3,298,000 167,000 1 ,227,200 29.82 25.57 24.52 22.71 20.35 24.59 1 2 3 4 5 1,192,000 4,358,000 6,571 ,000 1,342,000 1,012,000 2,895,000 TEA 2008 (%) POSITION (43 countries) ESTIMATE OF ENTREPRENEURS tion of the world. The economic clout of the G-20 and the large population that is give you a high degree of legitimacy and influence in driving the economy and the global financial system. From the viewpoint of entrepreneurial activity, th e choice of G-20 as a point of analysis is on the relevance of this group of ent repreneurs in total. This group represents 81.24% of people undertaking in the w orld. Table 2 provides information about members of the G-20 that participated i n GEM research in 2008. FIGURE 1 - EARLY ENTREPRENEURS (TEA) by Country - 2008 SOURCE: Research GEM 2008. To put the Brazilian entrepreneurial activity internationally, the team GEM Braz il opted to use the G-20 as analytical approach this year. This choice was motiv ated by the position of Brazil as current president of the G-20. The G-20 is for med by the Finance Ministers and Central Bank presidents of 19 countries: South Africa, Germany, Saudi Arabia, Argentina, Australia, Brazil, Canada, China, Sout h Korea, France, India, Indonesia, Italy, Japan, Mexico, Russia, Turkey, United Kingdom and United States. The European Union also is a member, represented by t he rotating president of the European Union Council and President of the Europea n Central Bank. Thus, the G-20 brings together important industrial and developi ng countries from all regions of the world. Together, member countries represent around 90% of global GDP and 80% of international trade (including intra-EU tra de) and two thirds of the popuSOURCE: Research GEM 2008. With respect to the G-20, did not participate in the GEM research in 2008 the fo llowing countries: Australia, Canada, China, Indonesia, Saudi Arabia and Europea n Union (which is technically not a country but has a seat at the G-20). The abs ence of China in this year's survey is relevant,€because the estimate of last ye ar its share was more than half of all entrepreneurs in the world (GEM 2007, p. 29). The countries represented by the G-20 present a trait that is also found in the whole set of countries in the GEM research in 2008. The countries considere d more developed had lower rates of entrepreneurship that the developing countri es in the group with relatively minor. The United States is the exception, as it is developed, but has similar rates of entrepreneurship in countries of the sta ge of develop• Entrepreneurship in Brazil in April 2008 - Executive Summary development intermediary, such as Brazil. The G-20 has an average of 8.4 TEA, wh ile the overall average is 10.5 GEM research. Argentina is the country with the highest TEA among members of the G-20, with a rate of 16.5, then comes Mexico, 1 3.1. Brazil is the third most entrepreneurial country in the group. Russia is th e country with the lowest TEA among all members of the G-20. TABLE 2 - G-20 COUNTRIES OF RESEARCH PARTICIPANTS GEM COUNTRIES Argentina Brazil India Mexico United States Africa South Korea Turkey Greece United Kingdom France Germany Italy Japan Russia Countries G-20 GEM SOURCE: Research GEM 2008. terprising ways and that on average between 2001 and 2008 the Brazilian is 75.6% more enterprising than the others. FIGURE 2 - CHANGES IN THE RATE OF EARLY ENTREPRENEURS (TEA) BRAZILIAN IN COMPARI SON WITH THE AVERAGE OF THE PARTICIPATING COUNTRIES FOR 2001 The 2008 GEM

TEA 2008 (%) 16.54 13.09 12.02 11.49 10.76 9.99 9.86 7.76 5.96 5.91 5.64 5.42 4. 62 3.77 3.49 8.42 10.48 POSITION (43 countries) 7 11 13 15 16 18 19 23 33 34 35 36 38 41 42 ... ... ESTIMATE OF ENTREPRENEURS 4,006,000 8,412,000 14,644,000 76,045,000 20,546,000 3 ,286,000 673,000 2,006,000 2,705,000 2,274,000 2,221,000 4,267,000 1,703,000 1,9 50,000 3,298,000 148,036,000 186,202 .000 SOURCE: Research GEM 2008. Evolution of entrepreneurial activity in Brazil Brazil continues with an ASD than the average of countries seen by the GEM resea rch, which was 10.48%. By analyzing the historical average of Brazil in relation to the average of other countries participating in GEM research, the average Br azilian TEA 2001 to 2008 is 12.72%, against an average of TEA only 7.25%. This r einforces that Brazil is a country of high capacity inOver the past eight years, the Brazilian economy experienced macroeconomic stabi lity, which is spreading throughout the Brazilian productive economic system. Th is improvement is evidenced by the participation of enterprises in the nascent e ntrepreneurship in Brazil. In the period 2001-2008, there was a reversal in the proportion of nascent entrepreneurs in relation to new entrepreneurs, as shown i n Figure 3. In 2001, Brazil had 65% of nascent entrepreneurs for 35% of new entr epreneurs, and 2008 is 24% of nascent entrepreneurs for 76% of new entrepreneurs . In this sense, entrepreneurial activity shows an increase in duration that sig nificantly helps the entire economy from the point of view of activity as the in come. Entrepreneurship in Brazil in 2008 - Executive Summary • 5 FIGURE 3 - EVOLUTION OF THE PROPORTIONS OF INITIAL Entrepreneurship, Nascent and new entrepreneurs OF BRAZIL FOR A 2008 2001 TABLE 3 - OPPORTUNITY FOR ENTREPRENEURSHIP RATE SOURCE: Research GEM 2008. TABLE 4 - RATE OF NEED FOR ENTREPRENEURSHIP COUNTRIES SOURCE: Research GEM 2001-2008. Need for Rate (%) 10.15 8.59 8.02 7.99 7.28 0.57 0.54 0.46 0.26 0.21 POSITION (43 countries) 1 2 3 4 5 39 40 41 42 43 ESTIMATE OF ENTREPRENEURS 2,720,000 343,000 1,367,000 472,000 97,000 224,000 1,0 00 49,000 15,000 7,000 Major Rates Colombia Peru Bolivia Angola Lower Rates Jamaica Netherlands Belgium Denmark France Iceland The motivation for starting an entrepreneurial activity is a theme relevant to t he GEM research, especially to better understand the nature of entrepreneurship in developing countries. The rate of entrepreneurship by opportunity reflects th e "positive side" of entrepreneurial activity across countries. This portion of entrepreneurs is one that began its activity to improve their living conditions by watching an opportunity to undertake. The five countries with highest and low

est rates of opportunity entrepreneurship are in Table 3. The other extreme of e ntrepreneurial activity is one in which people undertake in the face of a necess ity. In this case, there is entrepreneurship as "a tool for development." It may be noted also that, in this regard, the most advanced countries do not even hav e one inhabitant in every 100 who start some entrepreneurial activity out of nec essity.€The five countries with the highest rate of entrepreneurship out of nece ssity and five with lower rates are summarized in Table 4. SOURCE: Research GEM 2008. Worth highlighting the fact that the first time in the series of research GEM Br azil affects the ratio of two entrepreneurs by opportunity for every entrepreneu r by necessity, a fact to be celebrated as the first step of a long ladder of de velopment. This walk leads to Brazil to achieve such reasons as those seen in th e U.S. (6.86 for each entrepreneurial opportunity for entrepreneurs by necessity , • Entrepreneurship in Brazil in June 2008 - Executive Summary de) or France, which has the highest proportion among the members of the G20, by 8.35 entrepreneurial opportunity for every one of necessity. Considering only t he entrepreneurs seeking to start their activity to achieve greater independence or increased income, the so-called Genuine Opportunity, the proportion of this type of motivation for Brazil rose 38.5% in 2007 to 45.8% in 2008 , which repres ents an increase of 18.96%. This motivation is certainly the one most desired by the public and planners responsible for fostering entrepreneurial activity. new in relation to selected countries (Figure 4): only 1.7% of the initial ventu res using technologies available for less than a year. The Latin American countr ies that stand with the highest rates of use of new technologies are Chile and C olombia with 33% and 18% of the initial ventures. In the countries of BRIS, Indi a has a ratio of 28%, and South Africa, 25% of enterprises that use new technolo gies. FIGURE 4 - TECHNOLOGICAL POTENTIAL OF ENTERPRISES IN SELECTED COUNTRIES Characteristic of enterprises Two basic aspects are examined in this topic: the potential of technological dev elopments, combining product knowledge by consumers at the age of technology, an d market power, matching number of competitors and expected exportação2. Both th ose groups are analyzed by comparing the conditions in Brazil with regard to Lat in American countries participating in GEM 2008 and a group of countries formed by Brazil, Russia, China, India and South Africa (BRICS3), emerging today compet e in international markets. Among the countries that carried out the GEM researc h in 2008, Brazil is presented with one of the lowest rates of new product launc hes (unknown to the consumer) and use of technologies available for less than a year on the market. Only 3.3% of entrepreneurs say their products are considered new or unknown by those who are its customers, thus revealing a striking featur e in the initial Brazilian enterprises, ie they do not represent the introductio n of innovations in markets where they operate, and do not offer customers somet hing different. Worth highlighting the fact that entrepreneurs' initial Latin Am erican countries (Chile, Argentina, Uruguay and Peru) are among those most belie ve their products are considered unknown to consumers: 36.4% of Chilean entrepre neurs, 30% of Argentines and Uruguayans and 29% of Peruvians (Figure 4). With re spect to countries in the BRIS, Russia and South Africa have rates of new produc t launches for all consumers above 20% and is also among the top ten in this ran king, considering all the countries surveyed by the GEM 2008. Only India, among the selected countries, has low participation of new products launched in the ma rket (10%), although the proportion is far higher than that of Brazil (3%). Braz il also has the lowest proportion of use of technologies

SOURCE: Research GEM 2008. It is worth mentioning that the axis of New Product represents the percentage am ong the early entrepreneurs who claim that the products of their enterprise will be considered unknown for all of your potential customers. That is, the lower t his rate, unless the products are 2) It should be noted that because of the GEM methodology household survey carri ed out among the adult population, the results for these variables are the expre ssion of perceptions and expectations of individuals surveyed and classified as entrepreneurs. There are, therefore, objective data of the reality of enterprise s. 3) In the 2008 cycle of GEM research, China did not participate, so the revie ws are restricted to the other four countries: Brazil, Russia, India and South A frica, the group now called here BRIS. Entrepreneurship in Brazil in 2008 - Executive Summary • 7 considered a novelty for the customers.€Axis New Technology refers to the percen tage of entrepreneurs who claim to use technologies and processes available for less than a year on the market. With regard to market power of enterprises, it c an be seen in Figure 5 that most of the countries reviewed have early-stage entr epreneurs who say that their ventures will be inserted in an environment of inte nse competition, ie the lower the proportion of entrepreneurs who answer "no" wh en asked about the number of competitors who own or possess. In this question, U ruguay stands out, because almost 17% of Uruguayan entrepreneurs say their busin esses do not have competitors. In Brazil, this proportion is around 7%. Brazil i s the country whose projects have a lower expectation of exports (0.5% of the ve ntures are created with the expectation that more than 75% of consumers are from the external market). Among the countries surveyed, South Africa is what has ve ntures with greater expectations for exports: almost 10% expect that over 75% of consumers are based on an insert foreign trade. FIGURE 5 - POTENTIAL MARKET OF SELECTED COUNTRIES IN 2008 When doing a general analysis of the characteristics of Brazilian enterprises fo r launching new products to market, number of competitors, age of technology and process and expected exports and job creation, it established the following cla ssification: non-innovative entrepreneurs entrepreneurs who have an intermediate capacity for innovation and innovative entrepreneurs (Table 1). The table also shows the proportions of each category for all traits analyzed, from which we ca n deduce that in any of the characteristics considered the presence of minority entrepreneurs are innovators. TABLE 1 - CHARACTERISTICS OF TWO BRAZILIAN ENTREPRENEURS OF INNOVATION VENTURES Characteristic of Entrepreneur Development Potential (%) Do not Nobody believes Innovative New Product knowledge Many competitors 83.5 65.0 Age Number of compet ing technologies and processes more than 5 years 85.7 84.8 Other foreign consume r Up to 5 job creation Employment 78.3 13.8 7.9 27.8 1 to 5 years up to 50 have 12.7% of external customers 14.7 5 to 20 jobs 7.2 1.7 Less than a year have more than 50 0.4% of consumers outside the Over 20 competitors Fewer jobs 13.1 3.4 N o competitor capacity for some New Innovation Intermediary for all New Innovativ e Export expectations SOURCE: Methodology GEM. Financing Entrepreneurship in Brazil The Brazilian entrepreneurs in 2008 showed an appreciable growth in the use of f inancial resources to open their businesses. The average value was R $ 29,000.00 , almost twice the average recorded in the period 2002 to 2007.

Source: GEM 2008. • Entrepreneurship in Brazil in August 2008 - Executive Summary Draws attention to the GEM research cycle in 2008 that one quarter of the entrep reneurs said that the amount needed to start their business was over $ 30,000.00 . In the period 2002 to 2007, this proportion does not exceed 16% and in 2007 fa lls to 14% (Table 5). TABLE 5 - RESOURCES NEEDED TO START A BUSINESS - Nascent using new technologies and on their perceptions new products or services will im prove your life. The investigation showed respondents statements relating to eac h of the above information, and each person was asked to say how much you agree or disagree with them. Table 6 shows a comparison between the profile of entrepr eneurs and non-entrepreneurs in the Brazilian population. TABLE 6 - ABSORPTION OF INNOVATIVE PRODUCTS second respondent - BRAZIL - 2007 Purchase products or services that are not new to the market ANSWERS Entrepreneu rs Entrepreneurs Established Initials will experience first products or services that use new technologies not Entrepreneurs Entrepreneurs Established Initial p roducts or new services will improve your life Not Established Entrepreneurs Ent repreneurs 42.0 26.7 10 8 8.0 12.5 4.3 5.6 60.3 24.4 5.6 Initial Totally agree Partially agree Neither agree nor disagree 33.0 30.7 13.5 7.6 15.1 54.8 23.4 5.0 6.3 10.5 39.9 29.0 6.0 7.1 18.0 36.0 31.1 14.0 6.8 12.2 52.5 25.8 7.1 4.2 10.4 41.5 31.7 5.5 4.4 16.9 37.7 27.9 17.1 6.3 11.0 SOURCE: Research GEM 2008. Partially Disagree Strongly Disagree Nascent entrepreneurs are also respondents as to the origin of resources. Just o ver half (51.4%) stated that all resources come from the entrepreneur himself. R egarding the amount invested,€the entrepreneur employs an average of R $ 17,000. 00, a figure much higher than that recorded in previous years (2002-2007) in whi ch the average funds invested was R $ 8,500.00. In 2008, the entrepreneur proved to be much more optimistic about the prospect of return on your investment than in previous years. 34% of nascent entrepreneurs believe that within ten years w ill get as a return 20 times the amount invested. In 2007, this percentage was 1 2.5% and in 2006, 21.6%. SOURCE: Research GEM 2007. Market: uptake of innovation This year, researchers at the IBQP present for the first time, information about the consumption preferences of the Brazilian population by new products and ser vices. Data were collected in 2007 to determine whether individuals will buy new products or services on the market if they will experience first products or se rvices

It is interesting that the proportion of individuals who believe that new produc ts and services can improve their lives is greater than the proportion of people who are willing to try them. In turn, the proportion of Brazilians willing to e ffectively acquire new products and services is less than the two mentioned abov e. This is consistent with the profile of the Brazilians when it comes to innova tive behavior, ie, although a good portion of the population identifies the impo rtance of new products and services do not always move quickly to absorb them. T here is a significant portion of individuals who expect to see the results of th e adoption of innovations over the early adopters and then effectively adopt new products and services. Intrapreneurship The action to encourage employees to engage in innovation activities in the orga nization is known as corporate entrepreneurship or Intrapreneurship. In this res earch, we understand how intraemEmpreendedorismo in Brazil in 2008 - Executive S ummary • 9 the burdensome that entrepreneurs who, in the last two years, became involved wi th new business activities such as generation of new products or services and pa rticipation in the creation of new establishments and / or subsidiaries to enter new markets and new combinations of product-market . The development of new bus iness activities, in turn, comprises two basic stages: the development of ideas that includes, for example, search for information, discussion of new business a ctivity and submission of new ideas for their own management. The second stage r efers to the planning and operation, which includes, for example, promoting a ne w idea itself, the preparation of a business plan, marketing, or look for anothe r source of funding and organizing a work team. Therefore, it is Intrapreneurshi p in this research, a person employed full time as a leader who was involved in both stages of developing new business activities. All this considered, we can s ay that, according to data from the GEM research in 2008, 0.6% of Brazilian adul ts develop activities that allowed them to be classified as Intrapreneurship. quarter of Brazilian entrepreneurs. The rate of entrepreneurship in the age grou p 55-64 years in 2008 is 3%, lower than the average for the period 2001-2008 (5. 5%). The middle-aged adults, which in 2001 accounted for 10.5% of Brazilian entr epreneurs, today represents only 3.4% (Figure 7). FIGURE 6 - EARLY ENTREPRENEURS IN THE COUNTRIES OF LATIN AMERICA AND BRIS BY AGE GROUP IN 2008 Characteristics Entrepreneur Aiming to reveal a little more of the particular segment of the entrepreneurial population, we chose to prioritize only the initial entrepreneurial activities, both young adult and middle-aged businessman. Brazil occupies the third position in world ranking in terms of participation of young entrepreneurs (25%), surpas sed only by Iran (29%) and Jamaica (28%). Observe that, in selected countries, b oth in Latin America as the BRIS stand by the strong participation of youth in e ntrepreneurship, but with lower stakes to Brazil (Figure 6). Moreover, Brazil ha s one of the lowest participation rates of adult middle-aged (55-64 years) in En trepreneurship (3%), placing it at the forty position among the 42 countries sur veyed. Regarding Latin America, Chile, where 13% of entrepreneurs are located in this age group has the fourth position in this ranking. Another important infor mation is that India is the country that has the lowest participation of this gr oup in your entrepreneurial dynamics (2%). In relation to the young, the rate of entrepreneurship in 2008 was 15% higher than the average 2001-2008 (11.9%), rep resenting approximately SOURCE: Research GEM 2008.

Discontinuity An important element to analyze the dynamics of an entrepreneurial country is th e rate of discontinuance of projects. This rate is expressed as the percentage o f adults who answered affirmatively the following question: "Over the past 12 mo nths, you sold, closed, left some business which he owned?" In 2008, there was a significant reduction in the rate of people discontinued its participation in a ny new development, when compared with the value obtained in 2007 from 6,5% in t hat year to 3.5% in 2008. In the ranking of discontinuance rate, Brazil occupies the 23th position in 2008 (Figure 8), contrasting with the 9th place obtained i n 2007. 10 • Entrepreneurship in Brazil in 2008 - Executive Summary FIGURE 7 - EVOLUTION OF COMPARATIVE RATE OF ENTREPRENEURS BY EARLY 2001 THE AGE GROUP FOR 2008 remains active after the exit of the entrepreneur, not configuring therefore the mortality of the enterprise. Among the reasons that lead the individual to disc ontinue a venture, as in 2007, appear prominently the financial problems related to the venture (low profitability and low acquisition of resources), although i n 2008 there has been a decrease in the incidence of reason "profitability" of a pproximately 40% in 2007 to less than 25% in 2008. Interestingly, the increasing incidence of why other work, reaching almost 14% of mentions. This fact corrobo rates the official data that showed a good performance in the generation of post work in Brazil during the period in question. Characteristics of the relationship network (network) in the Brazilian entrepren eurship SOURCE: Research GEM 2008. FIGURE 8 - DISCONTINUITY OF BUSINESS BY COUNTRIES - 2008 The emphasis of this item is to obtain analytical knowledge of Brazilian entrepr eneurs who "hear" in the course of his entrepreneurial activity, more specifical ly over the past 12 months. Of course, when the question is put to the nascent e ntrepreneurs, the answer is obtained indicates that in this entrepreneur who was seeking grants for information and guidance for the opening of its new developm ent. Regarding the stage of development, it is noted (Table 7) that the nascent entrepreneur is much more eager to advise the new entrepreneur or established. A lthough the quest for guidance is more present among nascent entrepreneurs, it i s noteworthy that the "target" of the search for guidance counselors are still f ocused on "non-professional", ie relatives, friends and spouses, and others in w hich are identified entrepreneurial experiences compatible with the needs of ent erprises that wish to create. One can consider the demand for small entities tha t provide service-oriented business, around 16% for nascent entrepreneurs, less than 4% for new and just over 5% among established. SOURCE: Research GEM 2008. Education and training The purpose of this topic is to evaluate the role of education and training in t he training of entrepreneurs. To this end, we examine the educational system at all levels of education, and infrastructure of public and Entrepreneurship in Brazil in 2008 - Executive Summary • Importantly though, in almost 40% of cases in which the entrepreneur closes one entrepreneurial activity, entrepreneurship 11

Private, independent of the formal education system, mechanisms such as facilita tors or limitation of entrepreneurial activities, particularly in countries of p otential economic growth, of BRIS, presented by significant opportunities for ne w business. TABLE 7 - THE SECOND STAGE OF RELATIONSHIP NETWORK OF ENTREPRENEURS IN BRAZIL 2008 STAGE (%) consulted with: Friends or relatives Other relatives partner Your spou se or your parents a supplier A customer Someone with experience in what you do Someone with experience in business colleagues of the current work Someone who i s starting a business colleague of Old A work counter a possible investor A form er chief A chief now a company with which you collaborate A service-oriented bus iness a bank Someone from another country A lawyer A researcher or inventor A co mpany with which you compete 1 Initial Nascent Entrepreneurs Entrepreneurship New Total (TEA) Established 52.6 54.4 53.6 48.4 40.4 49.5 47.7 46.2 50.9 36.8 26.3 38.6 50.9 47 , 4 38.6 33.3 22. 8 21.1 28.1 10.5 12.3 10.5 15.8 12.3 14.0 3.5 8.8 8.8 40.2 37.5 18.5 27.2 20.1 1 7.9 19.6 9.8 12.0 8.2 5.4 8.2 6.5 6.5 3.8 3.3 1.6 4.9 2, 2 1.6 42.2 37.1 29.5 29 .5 26.6 24.9 23.6 15.2 14.4 11.0 10.6 8.9 8.0 7.2 6.8 5 , 1 4.2 4.2 3.8 3.0 41.9 28.3 18.6 26.6 20.8 20.1 23.7 7.5 14.3 11.5 5.4 5.8 3.2 6.8 5.4 5.7 3.2 5.7 4.3 1.8 pending the formal education). When considering the non-entrepreneurs, this rise s to 94%. Given the recent integration of entrepreneurship education in educatio nal institutions of the country, the majority of Brazilian entrepreneurs sought other types of organizations to develop the entrepreneurial skills necessary for his craft. Among the most sought alternatives, were business associations such as trade associations, chambers of commerce, federations of industries, Sebrae, SENAC, SESC and Senai, among others. This scenario shows a late and slow capacit y of national educational institutions to adapt their curricula to new needs of the labor market. In the small proportion of the population (7%) who have ever e ngaged in activities related to the opening of business, we realize that organiz ations outside the governmental sphere were the most sought after (Table 8). TABLE 8 - PARTICIPATION IN ACTIVITIES REGARDING THE OPENING OF BUSINESS OFFERED BY OTHER ORGANIZATIONS NON-EDUCATIONAL AT IVIDADE S RE LACI NADAS ABE TO RA FOR RTU NE ness strategies Asso cia tion em p resarial Agen Go vernamental Making use ad or atu r al or Anterio SOURCE: Research GEM 2008. Attendees share (%) 68, August 16, September 15, 2 Note 1: The percentage present in the table represent the proportion of entrepre neurs who respond positively to advice about effectively obtained from each of t he items presented. SOURCE: Research GEM 2008. The survey data show that GEM Brazil 2008 - despite the fact that entrepreneursh ip is a subject of interest in the fields business, politicians and academics be cause of its importance to the economic development of a country - many of natio nal entrepreneurs, the equivalent of 90% not participated in activities related to the opening of business at any time or throughout their formal educational tr aining on levels of primary, secondary and higher education, whether through par ticipation in such activities in various educational modalities (indeOther alternatives of training to develop entrepreneurial activities that have b een declared by Brazilian entrepreneurs include informal learning developed in f

ree time, for example, by reading books or material available on the Internet (3 4.1%), or other source of education and training (5.3%). Distance education is s till little explored option for capacity building and training, accounting for o nly 8% of respondents. • Entrepreneurship in Brazil in December 2008 - Executive Summary