Best place to start a business: UAE tops global ranking ahead of Netherlands, Finland, and Saudi Arabia

Best place to start a business: UAE tops global ranking ahead of Netherlands, Finland, and Saudi Arabia

Posted on 29 April 2022

The GEM research reveals that supporting new businesses during hard times – such as during the Covid-19 pandemic – and supporting women entrepreneurs, should be key components in a strategy to promote entrepreneurship

The UAE has outperformed the Netherlands and Finland to top the list of best countries for entrepreneurs, according to the Global Entrepreneurship Monitor’s (GEM) 2022 report, which assesses the conditions for entrepreneurs in 50 countries worldwide.

Every year, the Global Entrepreneurship Monitor (GEM) presents its comparative assessment of national entrepreneurial conditions. The aim of this is to rank countries in terms of their ability to encourage new businesses, which are of interest to policymakers and entrepreneurs alike.

The GEM 2021/22 report includes a comprehensive National Expert Survey (NES), which captures the perspectives of more than 2,000 relevant experts – at a minimum of 36 per country – across the 50 participating countries, about the conditions governing entrepreneurship in their country.

The table below shows the 13 Entrepreneurial Framework Conditions through which GEM assesses how well each country supports entrepreneurship.

High-income economies have performed better than middle- and low-income economies on the National Entrepreneurship Context Index (NECI), which summarises in one number the pooled expert assessment of each economy’s 13 entrepreneurial framework conditions (EFCs).

The UAE attained the highest NECI score of 6.8, according to the report, emerging as the best place to start a new business in 2022, followed by the Netherlands, Finland, Saudi Arabia, and Lithuania.

The UAE has the highest total score by a clear margin, having improved in 11 of the 13 framework conditions since 2020, and scoring the highest among all economies in four of them.

“This could be due to a combination of reasons, including the country hosting high-profile entrepreneurship promotion events such as Expo 2020,” the GEM report stated.entrepreneurship promotion events such as Expo 2020,” the GEM report stated.

Image: Global Entrepreneurship Monitor

Entrepreneurship depends upon the social and political conditions in which it operates. These can encourage or constrain a new business and have an impact on its growth into a more established enterprise that generates incomes and jobs, according to the GEM report.

The research highlighted the importance of the rule of law and education systems in encouraging entrepreneurship.

GEM tracks the NECI on an annual basis, and a comparison of data across 2019, 2020, and 2021 shows a general improvement in entrepreneurship conditions in most countries, despite the global pandemic.

Of the 35 countries that participated in the NES for each of the three years, the highest increases were in Saudi Arabia (from 5.0 in 2019 to 6.1 in 2021), the UAE (from 5.8 to 6.8), and the Republic of Korea (from 5.1 to 5.7).

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What can governments do to encourage entrepreneurship and boost the start of new businesses?

At least four of the 13 framework conditions are the direct responsibility of national governments.

“However, these are not the conditions typically rated highest by national experts. This is an excellent opportunity for policymakers to instigate change and promote entrepreneurship by focusing on improvements,” the GEM report stated.

It is no coincidence that the economies scoring highest for government efforts to mitigate the impact of the pandemic on new startups (Saudi Arabia), or for supporting women entrepreneurs (UAE), are also economies that have seen consistent and substantial improvements in their overall NECI scores in recent years.

Similarly, economies scoring worst on these measures also tend to have high numbers of conditions rated as insufficient: Israel (9), Turkey (11), and Iran (11).

In general, GEM research reveals that supporting new businesses during hard times – such as during the Covid-19 pandemic – and supporting women entrepreneurs, should be key components in a strategy to promote entrepreneurship, enabling it to flourish and make its full and valuable contribution to economic development and growth.

Unsurprisingly, schools would be a good place to start – education is a “low-hanging fruit” for policymakers. Of the 13 ecosystem conditions tracked, entrepreneurial education at school was rated last in 39 of the 50 economies participating in the National Expert Survey in GEM 2021.

A focus on improving these scores could be a relatively low-cost, but high-impact, means of enhancing the entrepreneurial environment, ultimately adding to jobs, and incomes, and generating high value for countries on multiple fronts.

SOURCE: arabianbusiness.com

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