Entrepreneurship looms large in the rhetoric of politicians and members of the international development community. Countless initiatives around the world aim to encourage entrepreneurship and all GBSN member schools offer entrepreneurship programs. Ernst&Young (EY) have just published an “Entrepreneurship Barometer” which compares policies of the G20 countries that have a bearing on entrepreneurship. Surveys that include many low-income countries as well are generated annually by the Global Entrepreneurship Monitor, which offers seventeen years of data. They sort countries by characteristics such as access to funding, entrepreneurship culture, tax and regulation rgimes, education and training and overall support. The GEM also surveys attitudes to entrepreneurship of some 2,000 adults in each country. Together, EY and GEM offer a vast amount of information, which I invite you to navigate.
What I find interesting are the huge differences in rankings between the two surveys for 2013. Looking for example at “Entrepreneurial Culture” (EY) and “Cultural and Social Norms” (GEM), There is hardly any agreement for example on the intensity of entrepreneurial culture in various countries. See how countries covered in both surveys are ranked:EY Entrepreneurship Culture
GEM Cultural and Social Norms
The disconnect between the two surveys are undoubtedly due in large part to differences in definitions of what constitutes “culture”. Therefore extreme caution is needed when considering rankings. One of the key GEM indicators “Total Early-Stage Entrepreneurial Activity”, known as TEA. It assesses the percent of working age population both about to start an entrepreneurial activity, and that have started one in recent years. Here are the countries at the top and the bottom of the list in 2015:
5. Burkina Faso
And in descending order:
This suggest to me that many individuals who are starting an enterprise do so out of necessity rather than because of promising opportunities offered by the business environment in which they must operate. Indeed, Europe and the US top the list of countries where entrepreneurs are driven by opportunity, while they rank lowest for necessity-driven entrepreneurship. This is consistent with the extreme dearth of “formal sector” jobs in most of the developing world, where entrepreneurship, no matter at how small a scale, is often the only way for most individuals to make a living.
Guy Pfeffermann is the Founder & CEO of the Global Business School Network