Washington, D.C. – Data released today in the 2016 Global Entrepreneurship Index (GEI) provides key information for policymakers and government leaders worldwide to strengthen their entrepreneurial ecosystems and promote high-growth, high-impact entrepreneurship, including insights for regional development.
The Global Entrepreneurship Network and the GEDI Institute released the Index today in preparation for Global Entrepreneurship Week (GEW) celebrations (Nov. 16-22). Findings from the Index will drive policy discussions at events around the world during GEW, to help countries and their cities develop best practices and sustainable plans.
“To be entrepreneurial, a country does not necessarily need the most entrepreneurs. They need the best,” said Zoltan Acs, the founder and president of the GEDI Institute. “We must look to the countries with entrepreneurship-rich ecosystems to discover best practices and strengthen the world’s entrepreneurship ecosystem.”
The GEI not only ranks more than 130 countries on their entrepreneurial ecosystems but also provides a framework for understanding how those countries measure up against neighboring ecosystems. The report indicates that countries in different regions have vastly different issues that need to be addressed for entrepreneurial growth. The Index identifies those regional issues and also provides examples of model systems – like Denmark in Europe – for others in the area to follow.
The report indicates the Asia-Pacific region should increase export-focus among entrepreneurs, Europe needs to help individuals perceive entrepreneurship opportunities and that the Middle East and North Africa should reduce overall business risk. North America needs to improve entrepreneur visibility in their communities, and South and Central America, as well as the Caribbean, must invest to develop new technology from within the region. The report also shows that Sub-Saharan Africa needs to support post-secondary education.
The GEI measures a country’s entrepreneurial ecosystem by combining individual data such as opportunity recognition, startup skills and risk acceptance, with institutional measures, including urbanization, education and economic freedom. These measurements help distinguish self-employment and replicative entrepreneurship from the innovative, productive and rapidly growing entrepreneurial ventures that drive real economic growth.
“It is vitally important to recognize and study benchmark countries, their policies and initiatives,” said Jonathan Ortmans, president of the Global Entrepreneurship Network. “This Index provides practical guidance to help policymakers really have an impact, not just copy what is happening on the other side of the world.”
This is first time quality of life components have been factored into the report, and the Index indicates there is a positive correlation between robust entrepreneurial ecosystems and quality of life factors.
The report looked at GDP, income equality, economic freedom and peace. The most correlation was found between the entrepreneurial ecosystem rankings measured against digital evolution and environmental performance factors.
The United States topped the rankings again this year, with a GEI score of 86.2. Canada placed second (79.5) and Australia came in third (78.0), and was first in the Asia-Pacific region. The top 10 countries for 2016 show a pattern similar to last year’s – they are high-income and mostly European nations. Australia was followed by (in order) Denmark, Sweden, Taiwan, Iceland, Switzerland, the United Kingdom and France.
The United Kingdom fell in ranking this year, moving from fourth to ninth place. This was primarily driven by declines in four individual level variables over a three year period – education level among entrepreneurs, competitors, new products and exports. Because the scores in the highest range are so close, small changes in score from one year to the next can produce a relatively large shift in ranks among the top 10.
Top regional leaders included the United States in North America, Australia in the Asia-Pacific region, Denmark in Europe, Chile in South and Central America/the Caribbean, and South Africa in Sub-Saharan Africa.