When working with businesses, government regulators and statistical agencies are well aware that they must use the utmost care in the use of the data which businesses report to them.  Beyond basic promises to survey respondents or other legal issues, much of this concern has to do with encouraging responsiveness and honesty in data collection by government from businesses.  Yet, I believe there are some good reasons to thnk that past some grace period, say twenty years (maybe longer for legal reasons), that the actual risk associated with fully disclosing data reported by businesses diminishes.  Businesses change.  The economy changes.  Each year, the data depreciate in private potential value.  I would argue the public value of the data depreciates quickly initially but could potentially increase substantially if the data eventually became public record.

When I awoke this morning I wasn’t thinking on this topic but then I saw the summary report of a meeting the National Academies held examining the data needs necessary to avoid systematic financial risk.  One large strand of debate in the proceedings concerns the need for expanded data access by regulators and what data should actually be public.  Current rules and regulations don’t allow different regulatory agencies to see data about specific companies across the spectrum of collection mechanisms.  This is not a situation unique to financial regulation.

While I am not an expert on systematic risk and very little of the event had much language which would seem to impact entrepreneurship measurement directly, I was struck at how I’d come across the themes laid out in the report time and again in one form or another. 

• Business data are never disclosable. 
• Masking of the microdata (even from government regulators) diminishes the actual utility of the data. 
• Data are collected for immediate regulatory and reporting purposes.

I don’t have immediate answers here but I am inspired in this area by the work of David Kirsch at the University of Maryland to believe that more is possible.  David is an economic historian by training and an entrepreneurship scholar by our good luck.  What David seems to recognize more than anyone I have ever met is the potential threat to future academic research if the current laws and regulations surrounding business data remain intact.  Specifically, David recognizes the many incentives that businesses today have to destroy most records concerning the company and not to archive things for posterity and research.  While archiving of data and making data collected by the government public eventually are two very different things, to me these concepts get to a larger need for proactive legal and curatorial management of business data for future generations of study.

While private databases multiply in their availability, there will always be a need for additional historic detail about businesses that can only come from honest answers to government officials or rich archival data from firms. 

The University of Michigan has released the fourth wave of data for the Panel Study on Entrepreneurial Dynamics 2, which is following 1,214 nascent entrepreneurs working on starting a business in the United States during 2005.  The Codebook contains basic distributions of how the nascent entrepreneurs responded in the aggregate to questions in the baseline and first three follow-ups.   The PSED is useful for examining the start-up process across a nationally-representative set of industries and variety of topics.  The data are publicly available for download at no cost and without registration. 

Incidentally, I will be participating in a workshop along with the principal investigators on the PSED at the 2010 Academy of Management meetings (information below). 


Chair: Paul D Reynolds; George Mason U.; 
Presenter: Per Davidsson; Queensland U. of Technology; 
Presenter: Teresa Virginia Menzies; Brock U.; 
Presenter: Yuli Zhang; Nankai U.; 
Presenter: Vyacheslav Dombrovsky; Stockholm School of Economics, Riga; 
Presenter: Jolanda Hessels; EIM / Erasmus School of Economics; 
Presenter: Gry Agnete Alsos; Nordland Research Institute; 
Presenter: Mikael J Samuelsson; Stockholm School of Economics; 
Presenter: Richard Curtin; U. of Michigan, Ann Arbor; 
Discussant: Howard Aldrich; U. of North Carolina; 
Discussant: David Audretsch; Indiana U., Bloomington; 
Discussant: Mahesh P Bhave; Alliant International U.; 
Presenter: Rolf Sternberg; U. of Hannover; 
Presenter: E.J. Reedy; Kauffman Foundation; 

Understanding the origins of new businesses, the firm creation process, has been dramatically affected by the implementation of longitudinal studies of the start-up process (Davidsson, 2006). National projects in nine countries share the same research protocol and a conscious effort has been made to harmonize many details of these projects. The teams in all countries continue to make progress either in collecting additional follow-up data—as in Australia, China, Germany, Latvia, Netherlands, Sweden and the second U.S. project [PSED II]—or completing additional analysis and assessments of the existing data sets—as in Canada, Norway, and the original Netherlands, Sweden and U.S. projects [PSED I]. The Kauffman Firm Survey [KFS], designed to provide tracking of post firm birth ventures is harmonized with U.S. PSED II. This workshop will provide an update of the developments over the past year among these complementary projects, providing a guide to those teams in additional countries that may wish to implement their own panel studies. Following commentaries on the contributions of these projects to understanding business creation and unexplored opportunities, there will be an opportunity for an open discussion of future directions for this research paradigm.