At 73, India ranked among the worst in global entrepreneurial performance

When it comes to entrepreneurial performance, India ranks amongst the worst globally, according to a report published this week.

India comes in at 73rd out of 78 nations ranked in the Global Entrepreneurship and Development Index, GEDI, published by Imperial College Business School, George Mason University and the University of Pecs, on Monday.

Topping the list of the most entrepreneurial is the US followed by Australia. Britain comes in at 14th position, while China and Brazil share the 54th place alongside Venezuela and Costa Rica.

They all fall below countries such as Greece, which ranks 32nd and South Africa, which comes in at 41. India has fallen five places from its 2011 rank of 68.

One of the reasons for India's position was that though there were many self-employed people across the country, they tended to have “low growth aspirations”, says Professor Erkko Autio of Imperial College Business School, and one of the authors of the study.

“There is a lot of self employed activity but it tends to be of low quality, driven by individuals becoming self employed because they can't find high quality jobs,” he said.

The index was not meant to reflect the number of self-employed people so much as the quality of the businesses, their impact and growth potential.

Barriers in india

Professor Autio added that too much regulation and limited education opportunities also posed significant barriers in India.

“Even if people with potential start to do something impactful there is just too much red tape.”

The index uses 14 different data points from mid-2010 to measure entrepreneurial activities, aspirations and attitudes.

These range from the percentage of adults who believe starting a new business is a good career choice, to the number active in the technology sector, to venture capital availability and the ease of setting up and operating a business.

Policy tool

The architects of the index intend it as a policy tool to help countries identify their strengths and weaknesses, as well as potential bottlenecks such as a sudden ramping up of regulatory burdens once a company becomes a certain size, which might limit an entrepreneur's motivation for growing beyond a point.

Says Prof. Autio: “I would suggest that for India it's mostly about removing the bottlenecks to growth, which would involve addressing some of the regulatory obstacles that can take away growth motivation from the entrepreneurs.”

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