World Operating at 25% Entrepreneurship Capacity
Mark Marich @markmarich
United States of America
Nov 15, 2012
The following post was submitted by Ruta Aidis, senior fellow at the School of Public Policy at George Mason University near Washington, DC
As the world celebrates Global Entrepreneurship Week with its thousands of activities in 130 countries, we sometimes wonder exactly how well entrepreneurship is doing around the world. Are we making real progress? While we have some very good indicators of the weather tomorrow--like the temperature and the barometer to tell us if it’s going to be cold and raining--nothing like this simple measure exists in the world of entrepreneurship. This is important because as we look into the future towards the world in 2050 there are storm clouds on the horizon like population explosion, global warming, urbanization and the lack of opportunity that will reduce the level of productive entrepreneurship in the future.
The Center for Entrepreneurship and Public Policy (CEPP) at George Mason University in Virginia has developed a simple tool to help gauge how entrepreneurship is doing in the world. Entrepreneurs, as we know, create jobs, bring innovations to market and promote economic growth. All things the world needs more of. Is entrepreneurship spreading around the globe, how fast and are entrepreneurs getting better or worse?
So how is the world doing? Are we sailing on stormy seas or is the evening sky clear and calm indicating a beautiful day ahead? The Global Entrepreneurship Barometer (GEBAR) measures entrepreneurship all over the world and turns that into one number for us to easily understand if entrepreneurship is getting better or worse from year to year. The inaugural launch of the GEBAR is to coincide this year with Global Entrepreneurship Week. Twenty five years ago before the Berlin Wall fell the world was operating at a very low level of entrepreneurship. With the exception of a few countries in the West, for example, the United States, the UK, and New Zealand, almost no one was actively pursuing productive entrepreneurship in the rest of the world. And for sure in India, China, Brazil and Russia almost no one was engaged in productive entrepreneurship.
Entrepreneurship was stormy as most activity was not productive. Today the world is changing as the barometric pressure is rising. Twenty five years after the falloff the Berlin Wall the world today is transitioning from a managed economy to a more entrepreneurial society. During Entrepreneurship Week events will be kicked off in 130 cities around the world to pitch the best ideas. We are in between a stormy past and a sunny future.
This change is measured by the GEBAR. The world today is operating at 25 percent of its productive entrepreneurship capacity. This corresponds to a period of change on the Barometer between good and bad weather, between good and bad entrepreneurship. Acs comments, since ‘in the past, the entrepreneurial weather was more overcast and rainy’. For the GEBAR, rainy, stormy weather indicates higher levels of unproductive entrepreneurship such as rent seeking and contraband activities which interfere with and undermine national economic growth and prosperity.
The GEBAR over the coming years will be able to tell us in real time if the global economy is engaged in, more or less entrepreneurship, and if all the efforts to create a more prosperous world, are actually paying off. We would expect the level of entrepreneurship over the years to climb from what we today can call ‘changing’ to ‘fair’ and ‘sunny’ over the next decade or two. The GEBAR used data from over 130 countries, includes over 90 percent of the worlds population and scores of indicators as well as ongoing surveys of millions of people. The data is then analyzed by sophisticated computer programs to come up with a single number.
The international team measuring GEBAR is led by Dr. Zoltan J. Acs, at George Mason University and includes a world class team of economists, statisticians, as well as management and development experts at leading universities across the globe. The team works closely with leading research centers and international agencies around the world to help policy makers build vibrant comunities.
The George Mason School of Public Policy’s Center for Entrepreneurship and Public Policy (CEPP) focuses on the relationship between Entrepreneurship Development and Comparative Public Policy in a global context. At CEPP, we use the Global Entrepreneurship Barometer (GEB) and the Global Entrepreneurship and Development Index (GEDI) as tools for analyzing the impediments to productive entrepreneurship development and economic prosperity through tailor made country specific reports, presentations, regional analysis and consultancies.