GEDI ranked 120 countries across the world and analysed data from more than 3,000 highly skilled individuals with start-up ideas. The data described how well each country supports entrepreneurial activity.
The US came top, followed by Canada and Australia. Sweden, Denmark and Switzerland are the top-ranked European countries. The UK fell to tenth place, below the Netherlands and Finland.
The study, carried out by researchers at Imperial College Business School, suggests that elements of Europe’s entrepreneurial ecosystem are not as well balanced as in the States.
The data marshalled information based on entrepreneurial attitudes, aspirations and activity – which they consider crucial to start-up development.
It will be a blow to some European entrepreneurs hoping to compete with Silicon Valley. Last month, BusinessBecause reported that MBAs feel Europe’s start-up scene has slipped behind the Valley. Critics argue that a lack of venture capital has hindered the region’s entrepreneurial development.
But the researchers also found that while entrepreneurial activity is innovative in the UK, Britons were less likely to choose entrepreneurship as a career path because they had a wealth of employment options available to them. UK-based entrepreneurs were reluctant take a risk and leave secure jobs.
Entrepreneurs in the US and Australia are more likely to take risks and are supported by most positive attitudes toward small businesses. The researchers said this type of positive environment provides a platform for aspiring entrepreneurs to secure financial backing.
Professor Erkko Autio, co-author of the study from Imperial, said there was a relative lack of ambition in the UK – which is holding it back from realizing its full potential.
“Enterprising people who are highly skilled should be encouraged to see setting up their own business as an exciting alternative to full-time employment. However, our report shows that many still crave the security of full-time employment,” he added.
Professor Erkko also said that entrepreneurship creates job creation and economic dynamism. “Our report pinpoints areas that the government can focus on to help aspiring entrepreneurs make the leap from the safety of a well-paid job into what they may feel is riskier territory,” he added.
The study also found that UK entrepreneurs were less inclined to grow their businesses globally, or employ large numbers of people – known as keeping a start-up “lean”.
Start-ups in the UK also came second to the US in entrepreneurial networking, according to the report, suggesting that getting support is more difficult in some parts of Europe.
This year’s GEDI index, now in its fourth edition, also compared the experience of male and female entrepreneurs for the first time. The addition reflects changing attitudes towards female entrepreneurship.
Germany, the US and Australia have a relatively high amount of female entrepreneurs, while the UK has fewer. The authors suggest that increasing female entrepreneurship could improve the UK’s – and ultimately Europe’s – global ranking.
To see the full rankings, visit: http://www.thegedi.org/research/gedi-index/
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