Global Entrepreneurship and Development Index: Policy Applications

1. Global Entrepreneurship and Development Index:Policy Applications Erkko Autio, Professor QinetiQ-EPSRC Chair in Tech Transfer and Entrepreneurship

2. Integrating 3.5 Billion People in the World Economy • Perception of opportunity: Attitudes • Do people recognise opportunities for economic action and do they have the skills to address them? • Accessibility of opportunity: Activities • Are people able and allowed to access opportunities and mobilise the resources necessary for their pursuit? • Mobilisation of opportunity: Aspirations • Are people able and willing to convert the opportunity into economic value added? • These challenges are the same for both rich and poor countries, although the bottlenecks differ in different contexts

3. Attitudes Aspirations Activities Productive Entrepreneurship GEDI Definition of National Entrepreneurship • ”Entrepreneurship is the dynamic interaction of entrepreneurial attitudes, entrepreneurial activity and entrepreneural aspirations”(Acs & Szerb, 2010) • This dynamic is embedded in a given institutional framework and drives productive entrepreneurship

4. Measures National [Productive] Entrepreneurship National Entrepreneurship is the dynamic interaction between Attitudes, Activities and Aspirations In addition to outputs, GEDI covers the processes that drive the outputs GEDI exposes countries’ strengths and weaknesses relative to peers and informs on how to remedy weaknesses Attitudes Aspirations Activities Productive Entrepreneurship GEDI: Basic Features

5. Attitudes Aspirations Activities Productive Entrepreneurship Index Composition Opportunity perception Startup skills Nonfear of failure Cultural support Risk capital Internationalisation High-growth ambition New technology New products Competition Quality of human resources Technology sector Opportunity start-ups

6. Entrepreneurship Index Types • Output-based • E.g., Global Entrepreneurship Monitor’s Total Early-Stage Activity rate (percentage of working-age population currently trying to start or operating new entrepreneurial ventures) • Measures actual activity • Challenge: distinguishing between types of entrepreneurship • Process-based • E.g., World Bank Ease of Doing Business index • Focus on tangible regulations related to start-up creation • Challenge: do not inform on level and quality of entrepreneurial activity • Qualitative (policy) indices • E.g., OECD; Nordic Entrepreneurship Monitor • Ranking of specific policy areas • Challenge: linking entrepreneurial activity with institutional conditions

7. GEDI Index Construction • Aspects of the entrepreneurial process derived from the GEM data • Process measures weighted with institutional descriptors • Penalty for Bottleneck philosophy (focus on the weakest link) • Because entrepreneurship is dynamic interaction, the weakest link holds back performance Example of the Entrepreneurial Attitudes Index

8. Analysis of Nordic Countries

9. Finland Country Analysis

10. Finland Country Analysis

11. Finland vs Singapore

12. Nordic Countries vs the US

13. Advantages for Policy Design • Focuses attention on bottlenecks • Performance comparisons relative to relevant peers • In addition to bottlenecks, also indications on how much to improve

14. GEDI INDEX The Global Entrepreneurship and Development Index GEDI is a collaboration between George Mason University, University of Pécs, and Imperial College Business School, London. The GEDI Index combines Global Entrepreneurship Monitor (GEM) data with data on country-level institutional conditions to estimate a country’s Entrepreneurial Attitudes, Aspirations, and Activities. Combined, these three pillars define the entrepreneurial character of a nation. Each of the three pillars – Attitudes, Aspirations, and Activities – comprises several sub-pillars, such as Opportunity Perception, Cultural Support, Opportunity Start-Ups, Growth Aspirations and New Technology. For the GEDI method, see www.thegedi.org.

15. Will He See Opportunity?