Entrepreneurship, the high-impact type that creates jobs, societal wealth, and improvements in standards of living, can be found at a variety of levels that may differ according to the level of development in a given country. In a factor-driven (agricultural economy) the focus needs to be on entrepreneurial attitudes in the population. In an efficiency-driven economy (manufacturing), individual entrepreneurs need to be encouraged to be entrepreneurs and start businesses. In an innovation-driven economy (knowledge-based economy) some people need to create very large and successful businesses.
A third important aspect of development is the roles of institutional and individual variables. While institutional improvement is vital for factor-driven countries to advance to the next level of development, the enhancement of individual characteristics is increasingly critical for innovation-driven economies.
The UK Context
Using GEI it is possible to identify the entrepreneurial strengths and weaknesses of the UK economy, and the bottlenecks that hold back the UK’s performance relative to other advanced economies. During the recent period of economic downturn, conditions for productive entrepreneurship deteriorated slightly (in line with most other countries). Using the GEI it is possible to identify the UK’s weakness in Aspirations and Attitudes which suffered more from the financial crisis relative to other countries. The UK’s strength is in Activities such as opportunity start-up, competition and non fear of failure.
The UK also suffers more from bottlenecks than equivalent countries but by prioritising policy related to Risk Capital, Process Innovation, High Growth, Product Innovation and Internationalisation, the UK may make significant gains relative to others.
Using the GEI, therefore, it is possible to identify areas of weakness and recommend policy actions to promote countries entrepreneurial strengths. Below you can download the 2012 academic launch report.