Entrepreneurs 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?
The Global Entrepreneurship Barometer (GEBAR) is the first ever measure for productive entrepreneurship development on a global scale. The Center for Entrepreneurship and Public Policy (CEPP) at George Mason University in Virginia developed this simple tool to help gauge how entrepreneurship is doing in the world. Similar to a barometer, GEBAR forecasts how well entrepreneurship is doing as a global engine of economic growth.
According to GEBAR, the world is currently operating at twenty-five percent of its entrepreneurial capacity “Our forecast shows that the world’s entrepreneurial weather is changing, moving from rainy to fairer weather.” says Professor Zoltan Acs, head of the GEBAR development team and professor of public policy and director of CEPP. “Twenty-five percent entrepreneurial capacity is significant given the gloomy outlook over the past few years,” Acs says. “Overall, it’s a positive development, yet if bottlenecks are addressed, capacity could reach 45 percent by 2052.”
The future depends on ‘the role of strong private sector led growth in creating jobs’
Productive entrepreneurship, that is, entrepreneurship that leads to economic growth is essential to increase prosperity amongst the world’s citizens. Moreover, removing the impediments to entrepreneurship on a global scale is critical when one takes into account the growing population. According to Jeske Hentschel, co-author of the WDR 2013: More than 620 million young people all-over the world are neither working nor studying”. More importantly, Hentschel adds, ” Just to keep employment rates constant, the worldwide number of jobs will have to increase by around 600 million over a 15-year period. ”
Annual GEBAR reports will allow us to benchmark this progress.
The calculations used for the GEBAR are complex and based on the country level scores from the Global Entrepreneurship and Development Index (GEDI). The GEDI Index is the only policy tool currently available allowing for true contextual understanding and analysis of productive entrepreneurship. It distills the complex relationship between individuals, institutions and entrepreneurship into clear and implementable results. Countries are ranked in terms of productive entrepreneurship performance, identifying strengths and indicating where improvements are needed. The GEDI Index has received global acclaim with articles appearing in The Wall Street Journal, The Economist and other international press. National policy-oriented country reports based on GEDI methodology have been presented in the USA, the UK and the Netherlands. The first edition of the GEDI book published in 2011 contained 71 countries. The 2012 GEDI index has been expanded to include 79 countries. The forthcoming 2013 GEDI index will include 118 countries.
In addition, the GEDI index uses the unique ‘Penalty for Bottleneck’ (PFB) methodology which underscores the lack of substitutability between variables that influence a country’s entrepreneurial performance. This results in a more realistic, relevant and insightful assessment of overall country performance allowing for improved policy development that fosters productive entrepreneurship development.
The GEDI index is composed of 3 sub-indices: Entrepreneurial Attitudes, Entrepreneurial Activity and Entrepreneurial Aspirations. These sub-indices are based on 14 pillars which each contain an individual and an institutional variable that corresponds to the micro- and macro-level aspects of entrepreneurship. The 28 individual and institutional variables used reflect different aspects of the entrepreneurial process and environment.
Promoting National Systems of Entrepreneurship
Further, the GEBAR underscores the importance of adopting the National Systems of Entrepreneurship (NSE) approach. NSE incorporates a holistic perspective towards entrepreneurship focusing on the interaction between the individual and the context in determining the entrepreneurial outcome.
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. For more information, contact R. Aidis ( email@example.com ).
 source: World Development Report 2013, The World Bank.