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As economies compete to facilitate business and innovation, the United States retains its position as the country offering most favorable conditions for entrepreneurs to launch and grow businesses.
The 2017 Global Entrepreneurship Index says the United States tops rankings with a GEI score of 83.4, which though a slight drop from its last year’s score of 86.2, means it stays considerably ahead of other major economies.
The Index is an annual reading of the health of the entrepreneurship ecosystems – including resources and infrastructure – in countries and ranks their performances against each other to determine how the countries fare domestically and internationally.
According to the report, released by Global Entrepreneurship Network and the GEDI Institute, the United States is followed by (in order): Switzerland (78.0), Canada (75.6), Sweden (75.5), Denmark (74.1), Iceland (73.5), Australia (72.5), the United Kingdom (71.3), Ireland (71.0) and Netherlands (67.8) – indicating other countries are focused on improving their conditions and rankings.
Authors of the report with say “improving conditions to help entrepreneurs create new companies could add $22 trillion to the global economy,” a statement said.
China, the second largest economy after the United States has a score of 36.3 and moved rapidly up 12 spots to 48th ranking. Neighboring India, a key emerging economy, had the largest 29 spots jump and is now placed 69th with a score of 25.8.
“China and India are strengthening their entrepreneurial ecosystems and creating billion dollar startups while Malaysia, Iceland and the Baltic states are emerging as digital entrepreneurship leaders,” said Zoltan Acs, co-author of the report and university professor at the Schar School of Policy and Government at George Mason University, according to a statement.
.“While institutional variables still need to be strengthened in emerging economies—where individuals are running ahead of policymakers—in developed countries individuals need to be shaken up. In other words, not enough people in developed countries—including the United States—are starting productive high-growth businesses.”
The GEI determines 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, the Institute explained.
These measurements then help distinguish self-employment and replicative entrepreneurship from the innovative, productive and rapidly growing entrepreneurial ventures that drive real economic growth.
“The GEDI methodology collects data on the entrepreneurial attitudes, abilities and aspirations of the local population and then weights these against the prevailing social and economic ‘infrastructure’ – this includes aspects such as broadband connectivity and the transport links to external markets. This process creates 14 ‘pillars’ which GEDI uses to measure the health of the regional ecosystem,” the Institute says on its website.
The latest methodology this year included four new components of the digital entrepreneurship ecosystem: Digital Citizenship, Digital Governance, Digital Marketplace and Digital Business.
“This is just the tip of the iceberg of the digital disruption revolution unfolding,” said Jonathan Ortmans, president of the Global Entrepreneurship Network, according to a statement released last week.
“The promise of jobs, economic growth and the optimism and hope that entrepreneurs bring to government efforts to create opportunity and prosperity for their citizens, has generated an extraordinary increase in attention from all levels of government in empowering their entrepreneurial ecosystems.”
