Zoltan J. Acs George Mason University Laszlo Szerb University of Pecs Global Entrepreneurship and Development Index Launch Victoria and Albert Museum, London UK 1 March 2011 The Global Entrepreneurship and Development Index

Shaping The Future “ Making predictions is really hard, especially about the future.” Yogi Bera New York Yankees

Stages over time

In an age where human ingenuity powers growth, the question of the developing economies & their human capital becomes the largest economic and social opportunity in the history of the world

Jedi Warrior – Killer App

Purpose of GEDI GEDINDEX is a tool. The purpose of the GEDINDEX is to give the world a “tool to support sustainable growth, and increased standards of living by measuring the contextual nature of successful entrepreneurship.

Support for entrepreneurs and entrepreneurship policy appears to be gaining acceptance globally However, a real understanding of entrepreneurship & the successful implementation of policies that actually support and lead to the development of high impact firms is rare

Why is true understanding of entrepreneurship and policy rare? Entrepreneurship is a complex phenomenon with individuals, societal norms, economic, political, and educational institutions interacting around the future (the unknown) Very difficult to understand (not to mention measure)

What do we mean by entrepreneurship? High Impact Firms: Microsoft Lenovo Infosys NOT: coffee shops, home based businesses, and self- employed Some call them Gazelles, because they grow fast, employ people, growing partners/suppliers, & generally have deep impact on regional, national, or even

Global Entrepreneurship and Development Index Created to capture the multidimensional nature of entrepreneurship Employs qualitative as well as quantitative measures Uses institutional and individual variables

Global Entrepreneurship and Development Index 3 Sub-Indexes Entrepreneurial Attitudes Entrepreneurial Activity Entrepreneurial Aspiration

What the sub indexes can tell us Attitude measures society’s basic attitudes toward entrepreneurship through education and social stability. Activity measures what individuals are actually doing to improve the quality of human resources and technological efficiency. Aspiration measures how much of the entrepreneurial activity is being directed toward innovation, high-impact entrepreneurship, and globalization.

More powerful collectively Attributes in the sub-indexes, are more powerful collectively than they are individually. This makes true entrepreneurship, the killer application for sustainable economic development

More powerful collectively In an efficiency-driven economy (manufacturing) individuals need to be encouraged to be entrepreneurs and start businesses. In an innovation-driven economy (knowledge- based economy) some entrepreneurs need to create large and successful enterprise

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

ATTITUDES 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. The Attitudes sub-index combines data on Cultural Support for entrepreneurship, Opportunity Perception, Perception of Start-Up Skills, Networking Propensity, and Nonfear of Failure. For the GEDI method, see

ACTIVITY 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. The Activity sub-index combines data on Competition, Quality of Human Resources, Technology Sector orientation, and Opportunity- driven Start-Ups. For the GEDI method, see

ASPIRATIONS 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. The Aspirations sub-index combines data on Risk Capital, Internationalization, High-Growth aspirations, New Technology, and New Product Development. For the GEDI method, see

Policy Conclusions and Tool Stages of development Simple measures do not work The index tracks well Institutions and people both important People become more important as we move from factor to efficiency to innovation.

Back to the Future: the World in 2050 Surging, Shifting Populations Abundance of human capital Will we unleash the killer application: entrepreneurship? Can we use GEDIndex and others to focus investments, policies, and welcome 3 billion new global citizens to sustainable growth and improved standards of living

Questions and Comments Zoltan Acs The Global Entrepreneurship & Development Institute