Global entrepreneurship witnessed a significant shift in 2023, largely shaped by the advance of AI, the challenges posed by an inflationary economy and increasing cautiousness amongst investors. Now in our sixth year of partnership with Prodem, we are pleased to launch the 2023 Index of Dynamic Entrepreneurship (IDE) report. This comprehensive annual report serves as a benchmark to track progress in entrepreneurial ecosystems across 50 countries. Through an examination of changes in social, economic, educational, cultural and regulatory conditions that influence the formation of dynamic new firms, IDE offers a unique perspective on the relative performance of national ecosystems. Let's delve into the key findings of this year's report and what they mean for the global entrepreneurial landscape.
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The Unforeseen Leaders
The first surprising revelation from the 2023 IDE report is the emergence of new leaders in dynamic entrepreneurship. Countries previously overshadowed by the traditional entrepreneurial powerhouses – such as the United States, United Kingdom and Israel – are now clearly established as leading entrepreneurial ecosystems. While the overall stability of the top 10 performing countries is notable, this masks the impressive performances by Sweden, the Netherlands and Norway. This shift underscores the real progress can be made by countries that implement the right policies and sustain their efforts over the course of several years. In particular, the Netherlands – which was the focus of our recent Atlas Deep Dive – has risen from outside the top 10 to 2nd in the last decade.
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Key dividing lines emerge
Nevertheless, the report shows a significant drop off in performance between the top tier countries and the vast majority of countries ranked in the middle or lower. Intriguingly, the data reveals that the most significant disparities between top performing countries are: entrepreneurial human capital, Science Tech and Innovation (STI) platforms, social capital and financing. This reenforces the findings of the GEN Atlas project which is building a compendium of entrepreneurship policy case studies around similar themes.
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Unlocking the talent pipeline
In particular, the report demonstrates the central importance of having a strong pipeline of talented individuals. This critical factor explains why some developing countries (Costa Rica, South Africa, Slovakia, Malaysia, and Panama) exhibit higher entrepreneurial dynamics than others and why developed countries like Austria struggle more than would be expected based upon their overall favorable conditions. This shows why campaigns like Global Entrepreneurship Week are critical in spreading passion for entrepreneurship across the world, especially in communities that traditionally lack opportunities to participate in business creation.
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Entrepreneurship is key to sustainability
Another significant finding of the 2023 IDE report is the link between entrepreneurship and sustainability. Amid growing concerns about climate change and environmental degradation, more and more entrepreneurs are embracing a focus on sustainability. The message of the report is clear: better conditions for entrepreneurship translate into higher levels of entrepreneurial dynamics, which, in turn, result in better levels of sustainable economic development. Understanding this link is crucial in guiding policymakers to create a supportive environment for entrepreneurs. In particular, it can help them better understand the long-term benefits of innovation weighed against the short-term costs of market disruption.
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Entrepreneurial backsliding
It is worth highlighting that the report sends a note of caution to countries that take their eye off the ball. As was the case in 2022, we have seen several countries go backwards as other economic and geopolitical priorities have taken center stage and distracted policymakers from enacting pro-entrepreneurship reforms. This reaffirms the importance of continuing to bang the drum for entrepreneurship as loudly as possible.
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Scope for further research
While this year’s report makes a notable breakthrough by exploring the relationship between systemic conditions for entrepreneurship and broader social issues such as sustainability, gender equality and tolerance, the authors make clear that this is just a beginning of the dialogue. There is considerable room for further research to better establish these social and environmental links.
IDE remains a vital evidence-based tool to stimulate dialogues and inform policymaking at a national level across the world. We hope this report serves as a strategic compass that results in more people starting and scaling their businesses. This remains the central aspiration of GEN and a key step towards unleashing the full transformative potential of entrepreneurs across the world.
Read more about who leads the global ranking of systemic conditions for dynamic entrepreneurship by downloading the new 2023 report here.