The USA’s #15 result in the Global Entrepreneurship Monitor (GEM) National Entrepreneurship Context Index (NECI) underscores opportunities to improve the overall entrepreneurial environment in the country. This is among the findings published in the GEM 2022/2023 Global Report entitled Adapting to a New Normal, released today in collaboration with Babson College.
GEM defines the entrepreneurial context of a particular economy in terms of 13 different characteristics, labelled the Entrepreneurship Framework Conditions (EFCs):
- Entrepreneurial Finance: there are sufficient funds for new startups
- Ease of Access to Entrepreneurial Finance: and those funds are easy to access
- Government Policy — Support and Relevance: policies promote and support startups
- Government Policy — Taxes and Bureaucracy: new businesses are not overburdened
- Government Entrepreneurial Programs: quality support programs are widely available
- Entrepreneurial Education at School: schools introduce entrepreneurial ideas
- Entrepreneurial Education Post-School: colleges offer courses in how to start a business
- Research and Development Transfers: research is easily transferred into new businesses
- Commercial and Professional infrastructure: quality services are available and affordable
- Ease of Entry — Market Dynamics: markets are free, open and growing
- Ease of Entry — Burdens and Regulations: regulations encourage not restrict entry
- Physical Infrastructure: good-quality, available and affordable
- Social and Cultural Norms: encourage and celebrate entrepreneurship
The NECI results are based on the scores of the Framework Conditions for each of the 51 economies participating in GEM. At least 36 experts, often more, are selected for their expertise by the GEM National Team and approved by GEM to assess statements that make up the scores. As the same questions are asked in all economies, scores can be compared across countries.
The United States continued to score high for Physical Infrastructure and for Social and Cultural Norms, giving a favourable view of entrepreneurship. The United States scored better than sufficient on the new COVID recovery topic in the questionnaire.
Conditions scored less than sufficient include Government Policy and Programmes; Research and Development Transfers; and Entrepreneurial Education at School. For Research and Development Transfers, the United States ranked 25th of the 51 economies participating and in the bottom half of economies for all three government-related conditions.
In the previous report, the USA’s overall score was 11th overall. The drop of four places from the previous year could be attributed to the difficult economic conditions, including the highest inflation rates in 40 years.
“High inflation rates add uncertainty for entrepreneurs, as they must consider the impact of price increases on everything from customer demand to resource procurement,” said Jeffrey Shay, Entrepreneurship Professor at Babson College, a GEM USA team leader and one of the 10 co-authors of the report.
“The EFCs are derived from more than two decades of GEM research, experience and knowledge,” said Aileen Ionescu-Somers, GEM Executive Director. “The state of the EFCs can encourage and enable, or discourage and constrain, both the new start and any subsequent growth and development. The quality of the EFCs is directly influenced by governmental policy, and therefore GEM’s NECI can be a useful strategic tool for policy decision makers that are seeking to cultivate entrepreneurship, build a robust entrepreneurship ecosystem and empower entrepreneurs.”
Access the full report at https://www.gemconsortium.org/reports/latest-global-report.
Global Entrepreneurship Monitor (GEM) is a consortium of national country teams, primarily associated with top academic institutions, that carries out survey-based research on entrepreneurship around the world. GEM is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs! GEM’s Adult Population Survey (APS) provides analysis on the characteristics, motivations and ambitions of individuals starting businesses, as well as social attitudes towards entrepreneurship. The National Expert Survey (NES) looks at the national context in which individuals start businesses.
In numbers, GEM is:
- 24 years of data
- 3,600,000+ GEM Adult Population Survey interviews since 1999
- 173,000+ respondents in the 2022 Adult Population Survey
- 2,000+ expert interviews for the 2021 GEM National Expert Survey
- 120+ economies since 1999
- 370+ specialists in entrepreneurship research (GEM National Team members)
- 300+ academic and research institutions
- 200+ funding institutions
- 1,000+ publications in peer reviewed journals
GEM began in 1999 as a joint project between Babson College (USA) and London Business School (UK). The consortium has become the richest resource of information on entrepreneurship, publishing a range of global, national and 'special topic' reports on an annual basis. www.gemconsortium.org.
About Babson College
Babson College prepares and empowers entrepreneurial leaders who create, grow, and steward sustainable economic and social value everywhere. We shape the entrepreneurial leaders our world needs most: those with strong functional knowledge, skills, and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in organizations of all types and sizes. An international leader in entrepreneurship education recognized globally by U.S. News & World Report, our undergraduate, graduate, executive programs, and partnership opportunities are tailored to the needs of our world.
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