A frequent misconception is to equate increasing the number of new businesses with the enhancement of entrepreneurship. However, large numbers of new businesses do not automatically translate into rapid economic growth. Therefore the Global Entrepreneurship and Development Index (GEDI) focuses on high growth entrepreneurship as a crucial strategy for economic growth and country competitiveness. In addition, it’s important to classify countries according to their stage of economic development whether they be factor-driven, efficiency-driven or innovation-driven. Institutions dominate the first two stages of development whereas in the innovation-driven stage entrepreneurship plays a large role in economic activity. The institutional environment must adjust to different economic stages in order for productive entrepreneurship to flourish thus strengthening economic development.