Singapore most enterprising Asian economy: study

By Chuang Peck Ming

The Business Times
March 23, 2011

SINGAPORE - Singapore is better known for the multinational corporations that dominate its economy, than for entrepreneurs. Especially compared with Asian economies such as Hong Kong and Taiwan, Singapore is believed to lag far behind when it comes to entrepreneurship. Studies and surveys of the subject have only encouraged this view.

But new research claiming to offer a more accurate picture has concluded otherwise. Zoltan Acs of George Mason University in the United States and Erkko Autio of the Imperial College Business School in the United Kingdom have in their global study produced a Global Entrepreneurship and Development Index (GEDI) showing Singapore as the most enterprising among key Asian economies.

GEDI places Singapore 15 in a ranking of 71 of 'the most important countries in the world', when it comes to savviness in risk-taking, spotting and seizing opportunities, and starting and growing businesses. Singapore is ranked above South Korea (20), Hong Kong (23), Japan (29), Malaysia (31), China (40), Indonesia (46), India (53), Thailand (56) and the Philippines (70).

It also ranks higher than Israel (21), which has some of the world's most vibrant high-technology industries, and developed economies like Germany (16), France (18) and Italy (27).

Mr Acs and Mr Autio find economic development more or less goes hand in hand with enterprise, so it's not surprising that the top spots in the GEDI rankings are taken by developed economies - Denmark at No 1, Canada No 2 and the US No 3.

Uncle Sam falls behind its Canadian neighbour because it has a bad 'entrepreneurial attitude', according to the scholars.

Four of the five Nordic countries are in the top 10, which suggests that welfare states are not necessarily unfriendly to enterprises. The four exclude Finland - the country that produced Nokia - which is ranked 13th.

Past studies of entrepreneurship have tended to focus more on quantity rather than on quality - they have surmised that the more start-ups there are in a country, the more entrepreneurial it is. Regardless of whether they are street hawkers or founders of multibillion dollar businesses such as Facebook - they are all lumped together. This approach suggests that a country becomes less enterprising as it grows richer.

GEDI builds on many of the early studies but pays more attention to qualitative aspects of entrepreneurship, zooming in on high-impact entrepreneurs and high-growth businesses. It sees countries roughly going through three stages of economic development - a factor-driven stage, an efficiency-driven stage and an innovation-driven stage.

GEDI defines entrepreneurship as 'a dynamic interaction of entrepreneurial attitudes, entrepreneurial activity and entrepreneurial aspiration that vary across stages of economic development'.

While not minimising the big role MNCs play in Singapore's economy, GEDI's rankings show that the government's efforts in pushing for greater entrepreneurship have paid off.

Singapore has done particularly well in 'entrepreneurial aspirations', where it is ranked 3rd among the 71 economies, and 'entrepreneurial activity' (9th).

In taking its businesses global, Singapore scored high in entrepreneurial ambitions. It also did fine in growing businesses, adopting new technology and introducing new products.

Singapore got top marks for providing opportunities for startups, having a lively technology sector and developing and attracting talent in fostering entrepreneurial activity.

Singapore's ranking in 'entrepreneurial attitude' however is pretty low at 35. It also falls short in the availability of venture capital, a key ingredient in the growth of entrepreneurship.

For full text: http://business.asiaone.com/Business/News/Story/A1Story20110322-269472.html.