As millions of people begin to participate in Global Entrepreneurship Week celebrations in 165 countries, a new report shows the United States remains the country with the most favorable conditions for entrepreneurs to start and scale new businesses but with a slowly narrowing gap as other countries increase their support.
The 2017 Global Entrepreneurship Index (GEI) provides key information for policymakers and government leaders worldwide to strengthen their digital ecosystems and promote high-growth, high-impact entrepreneurship. The authors estimate that improving conditions to help entrepreneurs create new companies could add $22 trillion to the global economy.
“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. “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 top of the rankings were dominated by countries in the innovation-driven stage of development. The United States topped the rankings again this year, with a GEI score of 83.4 – a slight drop from its score of 86.2 the previous year. It was 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).
India (25.8) enjoyed the largest jump in the rankings, moving up 29 spots from last year to land in 69th. Tunisia (40.5) had the second largest jump, from 62nd to 42nd. China (36.3) moved up 12 spots to 48th.
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.
This year, it included four new components of the digital entrepreneurship ecosystem: Digital Citizenship, Digital Governance, Digital Marketplace and Digital Business.
The report was released by Global Entrepreneurship Network and the GEDI Institute so that findings from the Index can drive policy discussions at events around the world during Global Entrepreneurship Week.
“This is just the tip of the iceberg of the digital disruption revolution unfolding,” said Jonathan Ortmans, president of the Global Entrepreneurship Network. “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.”
Other interesting observations from the report include:
- The big surprise is the rise of Switzerland to 2nd place, primarily driven by the aspiration index with very strong scores in high-growth firms, product innovation and process innovation.
- Three of the five Nordic countries, Denmark, Iceland, and Sweden, are in the top ten.
- Taiwan, the highest Asian country, is in 16th place, and Singapore is 24th, which virtually ties it with Japan.