This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.
Author: Sreevas Sahasranamam, Lecturer in Entrepreneurship and Innovation, University of Strathclyde, Aileen Ionescu-Somers, Executive Director and GEM 2021/2022 Global Report Author, Global Entrepreneurship Monitor, Stephen Hill, Emeritus Professor and GEM 2021 Lead Author/ Global Report 2022, Sohar University, Oman & Alicia Coduras Martinez, National Expert Survey Coordinator, GEM
- The Global Entrepreneurship Monitor’s report 2022 assesses the conditions of entrepreneurs in 50 countries around the world.
- This year, the United Arab Emirates, the Netherlands and Finland topped the list of best countries for entrepreneurs.
- Governments can encourage entrepreneurship by helping start-ups in emergencies such as the pandemic and by supporting women entrepreneurs.
Entrepreneurship depends on the social and political conditions in which it operates. These can encourage or constrain a new business and impact its growth into a more established business that generates income and jobs. For example, research has highlighted the the importance of the rule of law and education systems by encouraging entrepreneurship.
Each year, the Global Entrepreneurship Monitor (GEM) presents its comparative assessment of national entrepreneurial conditions. The aim is to rank countries according to their ability to encourage business creation. The results should be of interest to both policy makers and entrepreneurs.
the GEM Report 2021/22 includes an in-depth national survey of experts (NES). The NES gathers the views of more than 2,000 relevant experts (a minimum of 36 per country) in the 50 participating countries, on the conditions governing entrepreneurship in their country.
The table below presents the 13 entrepreneurial framework conditions through which the GEM assesses the extent to which each country supports entrepreneurship. GEM produces its National Entrepreneurial Context Index (NECI) by averaging the scores of these 13 conditions.
Not surprisingly, high-income economies perform better than middle- and low-income economies on NECI scores. The United Arab Emirates (UAE), with the highest NECI score of 6.8, emerges as the best place to start a new business in 2022, followed by the Netherlands, Finland, Saudi Arabia and Lithuania.
The United Arab Emirates has the highest total score by a clear margin, having improved in 11 of the 13 framework conditions since 2020, and scoring the highest of any economy in four of them. This could be due to a combination of reasons, including the fact that the country hosts high profile entrepreneurship promotion events like Expo 2020.
Meanwhile, in Lithuania, a series of policy initiatives focusing on entrepreneurship over the past two decades (e.g. social enterprise law). The table below illustrates the overall ranking of countries based on NECI scores, both in terms of the highest and lowest country rankings.
The best countries for entrepreneurs in 2022
The GEM tracks the NECI on an annual basis, and a comparison of data for 2019, 2020 and 2021 shows a general improvement in conditions for entrepreneurship in most countries, despite the global pandemic. Of the 35 countries that participated in the NES for each of the three years, the largest increases were recorded in Saudi Arabia (from 5.0 in 2019 to 6.1 in 2021), the United Arab Emirates (from 5.8 to 6.8) and the Republic of Korea (from 5.1 to 5.7).
There are only two economies whose NECI scores fell for both years: Qatar (5.9 to 5.5) and Luxembourg (5.2 to 4.9). The table below compares the NECI scores each year for the 35 countries.
What can governments do to encourage entrepreneurship?
At least four of the 13 framework conditions fall under the direct responsibility of national governments. However, these are not the conditions generally rated highest by national experts. This is a great opportunity for decision makers to drive change and promote entrepreneurship by focusing on improvements.
It is no coincidence that the economies that perform best in terms of government efforts to mitigate the impact of the pandemic on new start-ups (Saudi Arabia) or to support women entrepreneurs (UAE) are also economies that have seen consistent and substantial improvements in their overall NECI scores in recent years.
What is the World Economic Forum doing about the gender gap?
World Economic Forum measures gender gaps since 2006 in annual report Global Gender Gap Report.
The Global Gender Gap Report tracks progress in closing gender gaps at the national level. To turn these ideas into concrete actions and national progress, we have developed the Closing the Gender Gap Accelerators model of public-private collaboration.
These accelerators were convened in ten countries from three regions. Accelerators are established in Argentina, Chile, Colombia, Costa Rica, Dominican Republic and Panama in partnership with the Inter-American Development Bank in Latin America and the Caribbean, Egypt and Jordan in the Middle East and North Africa, and Kazakhstan in Central Asia.
All National Accelerators, as well as Knowledge Partner countries demonstrating global leadership in closing gender gaps, are part of a larger ecosystem, the Global Learning Network, which facilitates the exchange of ideas and knowledge. experiences via the Forum platform.
In 2019, Egypt became the first country in the Middle East and Africa to launch a Closing the Gender Gap Accelerator. While more women than men are now enrolled in university, women make up just over a third of professional and technical workers in Egypt. Women in the labor force are also less likely to be paid the same as their male colleagues for equivalent work or to move into leadership positions.
In these countries, CEOs and ministers work together over a three-year period on policies that help to further reduce the economic gender gaps in their countries. This includes extended parental leave, subsidized child care and removing unconscious bias in recruitment, retention and promotion practices.
If you are a business in one of the Closing the Gender Gap Accelerator programs countries you can join the local member base.
If you’re a business or government in a country where we don’t currently have a Closing the Gender Gap Accelerator, you can contact us to explore the possibilities of creating one.
Similarly, the lowest-scoring economies on these measures also tend to have a high number of conditions deemed insufficient: Israel (9), Turkey (11) and Iran (11). Overall, GEM research finds that supporting new businesses during difficult times – such as during the COVID-19 pandemic – and supporting women entrepreneurs should be key elements of an entrepreneurship promotion strategy. , allowing it to flourish and make its full and valuable contribution. to economic development and growth.
Unsurprisingly, schools would be a good place to start – education is a ‘low hanging fruit’ for decision makers. Of the 13 ecosystem conditions tracked, school-based entrepreneurial education was ranked last in 39 of the 50 economies participating in the 2021 GEM National Expert Survey.
Focusing on improving these scores could be a relatively low-cost, but high-impact way to improve the entrepreneurial environment, ultimately adding jobs and income, and generating value. high for countries on several fronts.