Ács, Zoltán J., Autio, Erkko, & Szerb, László. (2014). National Systems of Entrepreneurship: Measurement Issues and Policy Implications. Research Policy, 43(3), 476-494.

1. Entrepreneurship’s Role in Economic Development:
   • Entrepreneurs are vital for economic development, introducing change and challenging established industries.
   • Economic benefits of entrepreneurship include innovation, job creation, productivity, technology transfer, and knowledge spillovers.
   • There is a consensus on the importance of entrepreneurship, necessitating accurate measurements for policy-making.
2. Challenges in Defining and Measuring Entrepreneurship:
   • Defining entrepreneurship is complex, with various interpretations like self-employment, entrepreneurial orientation, or opportunity perception.
   • Measuring entrepreneurship, especially at the national level, is challenging due to definitional ambiguities and lack of conceptual grounding in existing measures.
   • The article critiques the lack of a systemic treatment of entrepreneurship in major economic theories and national innovation systems literature.
3. Systemic Approach to National Entrepreneurship:
   • The authors advocate for treating entrepreneurship as a systemic phenomenon at the national level.
   • They draw parallels with the National Systems of Innovation literature, emphasizing the need to consider infrastructures, policies, and institutions.
   • A systemic approach is crucial for understanding entrepreneurial performance in countries and for designing effective policies.
4. Proposing a Method for Measuring National Systems of Entrepreneurship:
   • The paper reviews existing measures of national entrepreneurship, identifying their features, strengths, and limitations.
   • It proposes the concept of ‘National Systems of Entrepreneurship’ and discusses its systemic characteristics.
   • The authors suggest a method for characterizing National Systems of Entrepreneurship, focusing on interactions between individual- and country-level indicators and the existence of bottleneck factors.
5. Development of the Global Entrepreneurship and Development Index (GEDI):
   • The paper introduces the Global Entrepreneurship and Development Index (GEDI) to measure national entrepreneurship systems.
   • GEDI comprises sub-indices reflecting attitudes, ability, and aspirations, and incorporates individual pillars reflecting various aspects of entrepreneurship.
   • The GEDI is a comprehensive tool that considers population-level processes, institutional context, and the interaction of system components.

More about GEDI

Inputs of GEDI

1. Individual-Level Data: GEDI incorporates data related to individuals’ entrepreneurial attitudes, abilities, and aspirations. This includes factors like perceived opportunities, skills, fear of failure, networking potential, and cultural perceptions of entrepreneurship.
2. Institutional Variables: These are factors that create the contextual environment within which individuals operate. They include market size, urbanization, educational systems, technological absorption capabilities, and economic and political institutions.
3. Sub-Indices and Pillars: The index is constructed from various sub-indices (like attitudes, ability, and aspirations) and individual pillars (like opportunity perception, startup skills, risk acceptance, networking, cultural support, etc.). Each pillar is a combination of individual-level data and national-level institutional or contextual data.

Rationale for Selection

1. Capturing the Entrepreneurial Ecosystem: The GEDI is designed to offer a holistic view of the entrepreneurial environment in a country. It goes beyond just measuring entrepreneurial activity (like new business creation) and includes factors that influence the likelihood of such activity and its potential impact.
2. Systemic Approach: Recognizing entrepreneurship as a system, GEDI integrates various components that interact with each other. This approach acknowledges that entrepreneurship is influenced by a complex mix of individual capabilities and wider socioeconomic factors.
3. Identifying Strengths and Weaknesses: By breaking down the entrepreneurial ecosystem into multiple components, GEDI can pinpoint specific areas where a country excels or needs improvement, guiding policy and strategic decisions.

Results from GEDI

1. Country Rankings: GEDI provides a ranking of countries based on their overall entrepreneurship score. This helps in comparing the entrepreneurial performance of different nations.
2. Identification of Bottlenecks: The index helps in identifying specific areas (bottlenecks) that are holding back a country’s entrepreneurial performance. For instance, a country might score high in opportunity perception but low in startup skills, indicating a specific area for policy intervention.
3. Policy Implications: The results from GEDI are useful for policymakers to understand the complex interplay of factors that contribute to the entrepreneurial climate in their country. It provides a data-driven foundation for crafting policies that enhance entrepreneurship.
4. Academic and Research Insight: For researchers, GEDI offers a comprehensive framework to study entrepreneurship at a macro level, encouraging a systemic understanding of the phenomenon.

GEDI Country Rankings

Table 4 ranks countries according to their GEDI index value. The maximum index value is 100 and minimum 0. For each country we also indicate the GDP per capita (PPP). Innovation-driven Nordic and Anglo-Saxon countries are in the front ranks. According to GEDI, the US is ranked as first, suggesting the highest national potential for entrepreneurship among the sample countries. The US is followed by Australia. Also Scandinavian countries are ranked high: Sweden, Denmark, Finland, Iceland, and Norway are each in top fifteen.

Table 4. GEDI 2012 country ranking.

Rank	Country	GDP PC	GEDI	Rank	Country	GDP PC	GEDI
1	United States	43,063	82.5	45	South Africa	9860	40.4
2	Australia	35,669	77.9	46	Montenegro	10,711	39.5
3	Sweden	35,134	73.7	47	Lebanon	12,592	38.9
4	Denmark	32,333	72.5	48	Barbados	17,564	38.5
5	Switzerland	39,344	70.9	49	Argentina	15,501	38.4
6	Taiwan	35,604	69.5	50	Mexico	12,617	38.2
7	Finland	31,810	69.3	51	Greece	20,922	37.8
8	Netherlands	36,599	69.0	52	Tunisia	8442	37.2
9	United Kingdom	32,723	68.6	53	Costa Rica	11,156	37.2
10	Singapore	53,266	67.9	54	Namibia	6453	36.8
11	Iceland	34,029	67.5	55	Macedonia	9323	36.2
12	France	29,819	67.2	56	Botswana	14,639	35.6
13	Belgium	32,649	66.5	57	Thailand	8459	35.5
14	Norway	47,547	65.1	58	Panama	14,320	34.8
15	Chile	15,848	65.1	59	Dominican Republic	8794	34.3
16	Germany	34,766	64.6	60	Indonesia	4272	34.3
17	Austria	36,259	64.0	61	Serbia	9683	34.0
18	Ireland	36,755	61.8	62	Russia	15,177	33.2
19	Puerto Rico	17,300	61.7	63	Jordan	5298	31.7
20	Israel	26,720	59.7	64	Nigeria	2294	31.6
21	Estonia	18,722	59.0	65	Jamaica	7839	31.4
22	Slovenia	24,320	52.7	66	India	3341	31.3
23	Colombia	9124	49.8	67	Bolivia	4552	31.1
24	Lithuania	18,776	49.6	68	El Salvador	6093	31.0
25	Poland	18,297	49.1	69	Kazakhstan	11,973	30.6
26	Latvia	15,946	48.4	70	Brazil	10,264	30.4
27	United Arab Emirates	42,293	48.3	71	Trinidad & Tobago	22,966	30.4
28	Portugal	20,962	46.9	72	Morocco	4475	29.5
29	Spain	26,545	46.9	73	Ecuador	8393	29.3
30	Korea	27,991	46.7	74	Algeria	7339	29.1
31	Hong Kong	44,770	46.6	75	Angola	5262	28.7
32	Slovakia	21,257	46.6	76	Philippines	3803	28.5
33	Japan	31,425	46.1	77	Zambia	1475	28.4
34	Uruguay	13,821	45.3	78	Bosnia and Herzegovina	7356	27.8
35	Turkey	13,737	44.7	79	Venezuela	11,613	26.4
36	Romania	11,443	44.6	80	Ghana	1765	26.3
37	Czech Republic	23,763	44.6	81	Egypt	5795	25.2
38	Hungary	17,033	44.5	82	Iran	10,462	24.2
39	Malaysia	14,775	44.1	83	Malawi	777	20.9
40	Saudi Arabia	21,430	43.5	84	Guatemala	4396	20.7
41	China	7958	41.6	85	Ethiopia	981	19.8
42	Peru	9429	41.3	86	Uganda	1165	19.3
43	Italy	26,328	40.9	87	Pakistan	2491	18.7
44	Croatia	16,148	40.9	88	Bangladesh	1623	13.8

Source: Per capita GDP in PPP 2012 or latest available data, in 2005 constant international dollars, World Bank (Hong Kong data is from IMF and Puerto Rico data is from CIA).

It is noteworthy that the top of the list is populated by high-income economies. This reflects the importance of the quality of institutions for national entrepreneurial potential. For comparison, if raw start-up rates only were examined, the list would be topped by low-income countries.