At the Global Entrepreneurship Congress (GEC) in Bahrain, GEN and Startup Genome released a preview of the 2019 Global Startup Ecosystem Report (GSER). Included in that report are preliminary findings from Startup Genome’s first global policy audit, based in part on the Startup Nations Atlas of Policies (SNAP) database.
After collecting policy data from dozens of countries and ecosystems, Startup Genome looked at where governments do the most when it comes to entrepreneurship policy. Which policy actions are most frequently taken to help entrepreneurs? What areas of policy are most neglected?
The table below — from the forthcoming 2019 GSER — shows the results. Policy actions are taken most frequently, and with the most intensity, to increase funding or access to capital for entrepreneurs. This includes actions such as tax credits for investors, public co-investment plans, loan guarantees, and so on.
Following funding/access to capital, the next categories with the most policy actions are SSOP Support and Immigration. Startup support organizations and programs (SSOPs), such as accelerators, are frequently the recipients of direct government funding or are established by the government. On immigration, many governments have created pathways to attract foreign entrepreneurs or employees — this includes startup visas as well as direct recruitment programs.
At the bottom end of the table, areas with the least policy actions taken by governments are: Bankruptcy, Diversity & Inclusion, and Procurement. This doesn’t mean that action was absent. Indeed, GEC host Bahrain adopted a new Reorganization and Bankruptcy Law in 2018 that modernized the country’s insolvency framework for businesses.
Yet the analysis by Startup Genome found unclear results in terms of the impact of various policy actions. There was, for example, no relationship between certain types of policy actions and ecosystem performance.
The only positive relationship found was between policy actions to increase access to finance and subsequent levels of early-stage funding for startups.
This is encouraging, but it also highlights the fact that government policy actions to support entrepreneurs tend to fall into the most straightforward category of support. Allocating money for a new fund of funds is not necessarily easy — but it is relatively easier than reforming bankruptcy.