ADVANCED ECONOMIES LOSING GROUND IN ENTREPRENEURSHIP

Babson College and Global Entrepreneurship Monitor researchers partner with World Economic Forum for economic study

Page Content 1

Geneva, Switzerland – Many advanced economies are missing out on the full benefits of entrepreneurship owing to insufficient ambition, innovation, or number of entrepreneurs, according to a report launched by the World Economic Forum and the Global E​​ntrepreneurship Monitor. Chile and Colombia score best.

The Leveraging Entrepreneurial Ambition and Innovation report provides analysis and recommendations for policymakers to maximize the impact of entrepreneurs in their economies, comparing countries on key variables of entrepreneurship.

 

For the first time, Leveraging Entrepreneurial Ambition and Innovationcombines two unique data sets: the World Economic Forum Global Competitiveness data is the largest and most comprehensive assessment of the business environment of 144 economies globally; the Global Entrepreneurship Monitor’s Adult Population Survey is the largest and most comprehensive assessment of entrepreneurial activity across 70 economies globally. The insights from the analysis of 44 of those economies in this report offer a new perspective on the relationship between entrepreneurial activity and entrepreneurship. Endeavor provided the interviews for the report.

To advance growth and innovation, key stakeholders need to reframe the debate on entrepreneurshi​p, says Donna Kelley, professor of entrepreneurship at Babson College, and co-author of the report for the Global Entrepreneurship Monitor: “There is a need to focus entrepreneurship policies​ and initiatives on those entrepreneurs who advance the greatest change in society.”

“Entrepreneurship is not just about the number of entrepreneurs available. The amount of innovation and ambition matter as much,” said Michael Drexler, head of investors industries at the World Economic Forum. “Building on this insight, a paradox arose from our research: the most advanced economies typically have less early-stage entrepreneurial activity, and many of them lack in either ambitious or innovative entrepreneurship, too. That means they miss out on much of the positive impact entrepreneurs can have on their economy.”

Only Colombia and Chile perform highly across all the dimensions of entrepreneurship examined in the report. This indicates their entrepreneurs are placed to create growth, jobs, and innovative offerings. All other countries miss out on at least one variable.

 

  • Dynamic economies such as those of Israel, Ireland, and Taiwan have a large share of highly ambitious entrepreneurs who anticipate fast growth, but they show only average or lower rates of early-stage entrepreneurial activity. 
  • A large number of Latin American countries, including Brazil, Ecuador, Mexico, and Peru, have high rates of early-stage entrepreneurial activity, but only a small portion of their entrepreneurs are ambitious or innovative. 
  • Most highly competitive European economies including those of Germany, SwitzerlandSwedenFinlandNorway, as well as those of Greece, Italy, Portugal, and Spain don’t have many entrepreneurs, and even fewer ambitious and innovative ones.

 

Leveraging Entrepreneurial Ambition and Innovation proposes key recommendations for how entrepreneurship policy can improve, including calling on policymakers to situate policy within the entrepreneurial context of their economy; being specific about the objectives for entrepreneurship policy; and differentiating appropriately between levers affecting different kinds of entrepreneurs.

Read the full report (pdf) »

About World Economic Forum

The World Economic Forum is an international institution committed to improving the state of the world through public-private cooperation in the spirit of global citizenship. It engages with business, political, academic, and other leaders of society to shape global, regional, and industry agendas.

Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is independent, impartial, and not tied to any interests. It cooperates closely with all leading international organizations.

About the Global Entrepreneurship Monitor

The Global Entrepreneurship Monitor (GEM) was initiated in 1999 as a joint venture of Babson College and the London Business School.

Starting with 10 participating countries, the project has expanded to include 69+ countries. GEM is the largest and most developed research program on entrepreneurship in the world. GEM is unique because, unlike most entrepreneurship data sets that measure newer and smaller firms, GEM studies the behavior of individuals with respect to starting and managing a business. GEM nations are members of an exclusive research project that provides access to the collective knowledge of some of the world’s most renowned researchers and institutions involved in entrepreneurship research. At a time in history when individual entrepreneurial activity may hold the key to transforming the global economy and discouraging ingrained economic disparity in countries with minimal economic opportunity, GEM data has influenced national economic policies and continues to expand its collaborative role. ​​​​​​​​​​​​

About Babson College

Babson College is the educator, convener, and thought leader for Entrepreneurship of All Kinds™. The College is a dynamic living and learning laboratory, where students, faculty, and staff work together to address the real-world problems of business and society—while at the same time evolving our methods and advancing our programs. We shape the leaders our world needs most: those with strong functional knowledge and the skills and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in a common purpose to create economic and social value. As we have for nearly a half-century, Babson continues to advance Entrepreneurial Thought and Action® as the most positive force on the planet for generating sustainable economic and social value.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Geneva, Switzerland – Many advanced economies are missing out on the full benefits of entrepreneurship owing to insufficient ambition, innovation, or number of entrepreneurs, according to a report launched by the World Economic Forum and the Global E​​ntrepreneurship Monitor. Chile and Colombia score best.

The Leveraging Entrepreneurial Ambition and Innovation report provides analysis and recommendations for policymakers to maximize the impact of entrepreneurs in their economies, comparing countries on key variables of entrepreneurship.


By Michael Chmura, mchmura@babson.edu, 781-239-4549 | 01/08/2015 09:00