by Case Lane

In the summer of 2020, global travel is largely off limits for most people, but there are other ways to travel around the world.

The global pandemic situation has prompted many people to begin considering the need to create an additional stream of income through an online business. But how many people live in a country that fully supports their intentions.

Researchers use different measures to determine an answer to this question. Studies ask: who is entrepreneurial or who isn’t…and what about whole countries? 

Can the entrepreneurial receipt-ability of entire people be determined? And if yes, what would be the factors? Why would some people be considered more entrepreneurial than others?

And if you are or are not in one of these countries, what does it say about your chances for starting a business?

If you’ve read my book Life Dream, you know I’ve observed entrepreneurial behavior all over the world that supports my belief that the entrepreneurial strain runs through our human DNA.  So when smart people come up with their fancy lists defining who is and is not entrepreneurial, I wonder where are the world’s most entrepreneurial countries and why were they selected for the title?

Defining World’s Most Entrepreneurial

When you look at a shanty town or slum, an informal residential area of poor people who are living perhaps in wood or mud huts or cardboard boxes, you might think…these are poor people and there’s not much going on…

…But when you look closely, you might see an incredible depth of activity that can only be described as entrepreneurial.

So what really are the world’s most entrepreneurial countries?

A quick check online reveals there are many lists ranking the world’s most entrepreneurial countries along defined terms.  In this article, I’m going to review two that stood out because they reach two different conclusions. Their conflicting results speak volumes about who are the entrepreneurs in the world.

One list comes from the Global Entrepreneurship Index from the Global Entrepreneurship and Development Institute (GEDI) in Washington, DC.

The index uses 14 pillars to rank entrepreneurship, based on concepts like attitude, ability, transportation infrastructure, broadband and similar factors.

At a glance, the list appears…unimaginative.  The emphasis, and credit, for entrepreneurship appears to be awarded to the dollar value created by companies in advanced economies, not the more global entrepreneurship definition of delivering value to solve a problem.

The other list comes from Latona’s analysis of the report from Global Entrepreneur Monitor (GEM).  And not only did they create a different list of top countries, but also the factors used to determine entrepreneurial tendencies might not even be considered relevant by typical entrepreneurs.

The Entrepreneurial Factors

The GEM list has six fascinating questions. Consider how an aspiring entrepreneur in your culture might respond to these prompts.

GEM asked 18 – 64 year olds whether ‘fear of failure’ would prevent them from starting a business.  The assumption, I assume, is that a population that answers ‘yes,’ they are too afraid of failure to start a business, would have a hard time encouraging aspiring entrepreneurs. 

But would not a true aspiring entrepreneur, by definition, answer ‘no’ to that question because the true entrepreneur overcomes fears and starts a business with confidence. In other words, the question might be ‘yes’ for the typical population, but ‘no’ for anyone who would ever consider becoming an entrepreneur.

The next question was about entrepreneurial intentions – who was planning to start a business within 3 years.

One result which stood out was Switzerland. The wealthy country ranked #2 on the GEDI list of world’s most entrepreneurial. But in the GEM survey just 7% of Swiss answered ‘yes’ to entrepreneurial intentions questions. The country scored .87 (less than 1 point) out of 10 on this question.

This result reflects the concern raised at the beginning of this article. A wealthy industrial country may not be entrepreneurial on measures that count for the future, like the ability to nurture sustained entrepreneurship.

As always with numbers, be wary of statistics, surveys and lists.

Weighing Innovation

The GEM list also weighted the questions, further indicating the factors they considered important to an entrepreneurial culture.

One question alone, on innovation, represented 40% of the country’s entrepreneurial value, the heaviest weight awarded in the overall score.

But the wording of the question uniquely defined innovation as the percentage of those involved in total early-stage entrepreneurial activity (TEA) who indicate that their product or service is new to at least some customers AND that few/no businesses offer the same product.

That is an extraordinary measure to quantify. How many people can really answer ‘yes’ to that question? If an entrepreneur introduces a product or service adaptation with features that do not exist elsewhere, and puts their own unique perspective, and singular approach into the creation of the product or service, does it count as new or old?

Where is ‘same’ product defined? At the macro level, almost everything can fit somewhere. If you start creating t-shirts with cool sayings on them, the product is a t-shirt which is not new, but your cool sayings are your differentiator. And it is that difference that makes for your success as an entrepreneur.

However, it appears that the weight of the ‘yes’ answer to that question helped define the overall list.  The three countries with the highest percentage of ‘yes’ where Chile, India and Luxembourg  – who ranked 1, 2 and 5 on the overall list. 

If innovation, being first and new, is considered the hallmark of entrepreneurship, then those who demonstrate that intention come out ahead.

The Important but Unavailable Factors

Another question was around the availability of financing, and the last one was on the inclusion of entrepreneurship in basic school education.  Those are two factors that the most famous entrepreneurs’ stories do not really cultivate.  Most countries do not include entrepreneurship in their basic education, and many successful entrepreneurs boot-strapped their way to initial success.

The rating for those two questions were not yes-no but an index number.

The ‘What Will People Say Question’

Another index question, which was left out of the final score was:  The extent to which social and cultural norms encourage or allow actions leading to new business methods or activities that can potentially increase personal wealth and income.

Amazingly that loaded question could in fact be the basis for the entire answer on any country’s score. The question should carry weight in many cultures.

Many successful entrepreneurs talk about how they were discouraged from pursuing their business ideas, and made to feel that they were doing something wrong. But their perseverance, and desire, to step away from the status quo, and pursue their own vision, ultimately led them to defy their culture and take the next step.

Since the story of getting past the backlash is one of the most common entrepreneurial stories, one that transcends cultures and locations, it could be argued that experience is the only qualifier for entrepreneurship, anywhere in the world.

The World’s Most Entrepreneurial Countries?

Given the factors used to create the GEM list and GEDI list, only three countries appeared on both: Canada, Ireland and the United States.  If you live in one of those three countries, you might be feeling a little more relaxed about your entrepreneurial chances across a variety of measures. 

In fact, Ireland ranks in the same place, at #8 on both lists!

The rest of the GEDI list is all economically advanced countries, and the rest of the GEM list is 5 out of 7 developing countries.

So what does it all mean?

Entrepreneurs exist everywhere in the world.  And the factors that make an entrepreneur vary across every possible variable. Except the one common reality…

…If you have business ideas in your head, and you are ready and willing to do the work to create a product or service that delivers value.  Then you’re an entrepreneur.

The GEDI list is:

1. United States

2. Switzerland

3. Canada

4. United Kingdom

5. Australia

6. Denmark

7. Iceland

8. Ireland

9. Sweden

10. France

The GEM list

1. Chile

2. India

3. Guatemala

4. Canada

5. Luxembourg

6. Angola

7. United States

8. Ireland

9. Turkey

10. Austria

Summary

Reviewing just two of the many lists that attempt to define entrepreneurial tendencies in national populations, you would have to concede – it depends on who you ask and how you ask…

• You can count the availability of roads and high-speed internet or
• You can count the variety of new ideas or public school courses
• But in total what counts is the ability to create new businesses and add value to the economy
• Countries that do that are the true entrepreneurial champions.