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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
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16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Small Business Administration (SBA)

Office of Advocacy

 

Global Entrepreneurship and the United States [September 2010]

http://www.sba.gov/advo/research/rs370tot.pdf

[full-text, 62 pages]

 

[excerpt]

This paper looks at the performance of the United States on the Global Entrepreneurship and Development Index (GEDI), which captures the contextual features of entrepreneurship. The index builds on and improves earlier measures by capturing quantitative and qualitative aspects of entrepreneurship. It measures entrepreneurial performance in 71 countries over three sub-indexes, 14 pillars, and 31 individual and institutional variables. The United States appears among the top entrepreneurial economies and ranks third on the GEDI. It performs very well on the aspirations sub-index but lags somewhat on the attitudes and activity sub-indexes. At the pillar level, the United States is strong in startup skills, competition, and new technology but weak in cultural support, tech sector, and high-growth business. U.S. performance appears be stronger on institutional variables than on individual variables. The United States’ apparent weakness in the tech sector and its lack of cultural support for entrepreneurship, coupled with lack of high-growth business can be traced to a number of sources. Chief among these are the changing political environment and international volatility, the bursting of the tech sector bubble of the 1990s, the recent recession, and the improving performance of other counties. However, despite some drawbacks, U.S. performance on the index remains strong.

 

Table of Contents

1. Executive Summary ....................................................................................................3

2. Introduction .................................................................................................................3

2.1. Assessing Entrepreneurship ..................................................................................4

2.2. Stages of Development ..........................................................................................6

2.3. Purpose and Structure ............................................................................................8

3. The Global Entrepreneurship and Development Index ..............................................9

3.1. The Sub-Indexes ..................................................................................................10

3.2. The Weighting System ........................................................................................13

4. The Relative Position of the United States on the GEDI ..........................................14

5. Relative Position of the United States at the Pillar Level .........................................22

6. The U.S. Position at the Variable Level ...................................................................28

7. Public Policy Suggestions .........................................................................................33

8. Conclusions ...............................................................................................................37

9. References .................................................................................................................39

10. Appendix A: Data Construction ...............................................................................45

11. Appendix B: Country Rankings ................................................................................54

 

List of Figures

Figure 1: Entrepreneurship and Stages of Economic Development ....................................8

Figure 2: Structure of the Global Entrepreneurship and Development Index (GEDI) ......11

Figure 3: U.S. Position on GEDI and Sub-Indexes ...........................................................17

Figure 4: Change in the GEDI and Sub-Indexes for the United States, 2002-2009 .........19

Figure 5: U.S. Entrepreneurial Attitudes Sub-Index Pillar Values, 2006-2009 .................20

Figure 6: U.S. Entrepreneurial Activity Sub-Index Pillar Values, 2006-2009 ..................21

Figure 7: U.S. Entrepreneurial Aspirations Sub-Index Pillar Values, 2006-2009 .............22

Figure 8: Strengths and Weaknesses at the Pillar Level ....................................................25

Figure 9: U.S. Position on the Pillar Level ........................................................................26

Figure 10: Comparison of the United States, China, and India .........................................27

Figure 11: Comparison of the European Union, the United States, and the Rest of the World ...............................................................................................................28

Figure 12: Comparative U.S. Position on the Institutional Variables of the GEDI ...........29

Figure 13: U.S. Position on Individual Variables ..............................................................30

Figure 14: Mapping the Sub-Indexes onto Stages of Development ..................................34

 

List of Tables

Table 1: U.S. Summary Statistics and Global Index Rankings .........................................15

Table 2: Global Entrepreneurship and Development Index (GEDI) Rankings .................16

Table 3: U.S. Scores at the Pillar Level and Comparative Standing .................................23

Table 4: U.S. Scores at Variable and Pillar Levels and Comparative Standing ................32

Table 5: Policy Emphasis for Economies at Different Stages of Development ................35

Table A.1. Description of Individual Variables Used in the GEDI ...................................45

Table A.2. Description and Source of Institutional Variables used in the GEDI ..............46

Table A.3. Description of the Applied Variables and Pillars of the Entrpreneurial Attitude Sub-Index ...........................................................................................49

Table A.4. Description of the Applied Variables and Pillars of the Entrepreneurial Activity Sub-Index ...........................................................................................50

Table A.5. Description of the Applied Variables and Pillars of the Entrepreneurial Aspiration Sub-Index .......................................................................................51

Table A.6. Countries Included in the GEDI: Size of the Sample by Year ........................52

Table B.1: The Global Entrepreneurship Sub-index Country Scores and Ranks ..............54

Table B.2: Entrepreneurial Attitudes Sub-Index and Pillar Scores by Country ................56

Table B.3. Entrepreneurial Activity Sub-Index and Pillar Scores by Country ..................58

Table B.4. Entrepreneurial Aspirations Sub-Index and Pillar Scores by Country .............60

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