Startup Nation - A global ranking of entrepreneurship ecosystems
19 January 2021
The Global Entrepreneurship and Development Institute, which is based in Washington DC, produces an occasional Global Entrepreneurship Index (GEI), which ranks nations according to 14 criteria.
The United States topped the list in 2019. Despite an alleged dent in its confidence in recent years, it remains the land of business opportunity. The UK positioned at number five, and France appears at number 14 one place ahead of Germany.
The GEI has a definite idea what entrepreneurship means when it comes to development. ‘Contrary to popular belief,’ it contends, ‘the most entrepreneurial countries in the world are not those that have the most entrepreneurs. This notion is in fact misleading. In fact, the highest self-employment rates are in low-income countries such as Zambia and Nigeria (or for that matter Brazil, South Africa and Vietnam as our graphic shows). This is because low-income economies lack the human capital and infrastructure needed to create high-quality jobs. The result is that many people sell soft drinks and fruit on street corners, but there are few innovative, high-growth startups. Nor do these street vendors represent business ownership as defined in many developed countries.’
Such judgment isn’t uncommon – other entrepreneurship indices measure speed of growth in turnover and often jobs created. This has led to some degree of controversy because digital/tech businesses normally employ fewer people than traditional manufacturing businesses. They also outsource. The mighty VW Group employs 630,000 souls whereas Apple only employs 123,000.
Focusing on improving the weakest pillar first will produce the greatest gains. Think of it like baking a cake, where each pillar is one of the ingredients. If you don’t have enough eggs, adding more flour won’t help you bake a better cake. You need to add more eggs before you start to see an improvement.