Global Entrepreneurship and Development Index:
Policy Applications
Erkko Autio, Professor
QinetiQ-EPSRC Chair in Tech Transfer and Entrepreneurship
Integrating 3.5 Billion People in the World Economy
 Perception of opportunity: Attitudes
• Do people recognise opportunities for
economic action and do they have the skills
to address them?
 Accessibility of opportunity: Activities
• Are people able and allowed to access
opportunities and mobilise the resources
necessary for their pursuit?
 Mobilisation of opportunity: Aspirations
• Are people able and willing to convert the
opportunity into economic value added?
 These challenges are the same for both
rich and poor countries, although the
bottlenecks differ in different contexts
Erkko Autio
GEDI Definition of National Entrepreneurship
 ”Entrepreneurship is the dynamic interaction of entrepreneurial
attitudes, entrepreneurial activity and entrepreneural aspirations”
(Acs & Szerb, 2010)
 This dynamic is embedded in a given institutional framework and
drives productive entrepreneurship
Attitudes
Aspirations
Activities
Productive
Entrepreneurship
Erkko Autio
GEDI: Basic Features
Measures National [Productive]
Entrepreneurship
National Entrepreneurship is the
dynamic interaction between
Attitudes, Activities and Aspirations
In addition to outputs, GEDI covers
the processes that drive the outputs
GEDI exposes countries’ strengths
and weaknesses relative to peers
and informs on how to remedy
weaknesses
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Attitudes
Aspirations
Activities
Productive
Entrepreneurship
Index Composition
Opportunity perception
Startup skills
Nonfear of failure
Cultural support
Attitudes
Risk capital
Internationalisation
High-growth ambition
New technology
New products
Aspirations
Activities
Productive
Entrepreneurship
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Competition
Quality of human resources
Technology sector
Opportunity start-ups
Entrepreneurship Index Types
 Output-based
• E.g., Global Entrepreneurship Monitor’s Total Early-Stage Activity rate (percentage
of working-age population currently trying to start or operating new entrepreneurial
ventures)
• Measures actual activity
• Challenge: distinguishing between types of entrepreneurship
 Process-based
• E.g., World Bank Ease of Doing Business index
• Focus on tangible regulations related to start-up creation
• Challenge: do not inform on level and quality of entrepreneurial activity
 Qualitative (policy) indices
• E.g., OECD; Nordic Entrepreneurship Monitor
• Ranking of specific policy areas
• Challenge: linking entrepreneurial activity with institutional conditions
Erkko Autio
GEDI Index Construction
 Aspects of the entrepreneurial process derived from the GEM data
 Process measures weighted with institutional descriptors
 Penalty for Bottleneck philosophy (focus on the weakest link)
• Because entrepreneurship is dynamic interaction, the weakest link holds back
performance
Example of the Entrepreneurial Attitudes Index
Individual
variables
Institutional
variables
Pillars
(Indicators)
OPPORTUNITY
x
MARKETAGGLOM
= OPPORTUNITY
PERCEPTION
SKILL
x
EDUCPOSTSEC
= STARTUP SKILLS
NONFEAR
x
BUSINESS RISK
= NONFEAR OF
FAILURE
KNOWENT
x
INTERNETUSAGE
= NETWORKING
CARSTAT
x
CORRUPTION
= CULTURAL
SUPPORT
xi,j = min yi(j) + ln(1 + yi,j – min yi(j))
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xi,j = after penalty value of the entrepreneurship feature j of country i
yi,j = normalised value of the original entrepreneurship feature j of country i
Analysis of Nordic Countries
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Finland Country Analysis
Global Entrepreneurship and
Development Index
Entrepreneurial Attitudes
Sub-index
1.00
1.00
0.90
0.90
0.80
0.80
0.70
0.70
0.60
Finland
0.60
Finland
0.50
0.50
0.40
0.40
0.30
0.30
0.20
0.20
0.10
0.10
0.00
0.00
0
10,000
20,000
30,000
40,000
50,000
60,000
GDP Per Capita in Purchasing Power Parities PPP
0
20,000
30,000
40,000
50,000
60,000
GDP Per Capita in Purchasing Power Parities PPP
Entrepreneurial Aspiration
Sub-index
Entrepreneurial Activity
Sub-index
1.00
1.00
0.90
0.90
0.80
0.80
0.70
0.70
Finland
0.60
0.60
0.50
0.50
0.40
0.40
0.30
0.30
0.20
0.20
0.10
0.10
0.00
Finland
0.00
0
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10,000
10,000
20,000
30,000
40,000
50,000
60,000
GDP Per Capita in Purchasing Power Parities PPP
0
10,000
20,000
30,000
40,000
50,000
60,000
GDP Per Capita in Purchasing Power Parities PPP
Finland Country Analysis
Weaknesses
0.80
0.70
0.60
0.50
0.40
0.30
0.20
QUALITY OF
HUMAN
RESOURCE
0.56
0.16
0.00
0.00
OPPORTUNITY
PERCEPTION
0.48
Erkko Autio
0.10
RISK CAPITAL
Entrepreneural EntrepreneurialEntrepreneurial
Aspiration
Activity
Attitudes
0.90
EntrepreneuralEntrepreneurialEntrepreneurial
Aspiration
Activity
Attitudes
1.00
Strenghts
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
CULTURAL
SUPPORT
OPPORTUNITY
STARTUP
NEW
PRODUCT
0.90
0.88
0.76
0.86
1.00
Finland vs Singapore
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Nordic Countries vs the US
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Advantages for Policy Design
 Focuses attention on bottlenecks
 Performance comparisons relative to relevant peers
 In addition to bottlenecks, also indications on how much to improve
Erkko Autio
GEDI INDEX
The Global Entrepreneurship and
Development Index GEDI is a collaboration
between George Mason University,
University of Pécs, and Imperial College
Business School, London. The GEDI Index
combines Global Entrepreneurship Monitor
(GEM) data with data on country-level
institutional conditions to estimate a
country’s Entrepreneurial Attitudes,
Aspirations, and Activities. Combined, these
three pillars define the entrepreneurial
character of a nation.
Each of the three pillars – Attitudes,
Aspirations, and Activities – comprises
several sub-pillars, such as Opportunity
Perception, Cultural Support, Opportunity
Start-Ups, Growth Aspirations and New
Technology.
For the GEDI method, see www.thegedi.org.
Will He See Opportunity?
Erkko Autio