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SA ranks 46th in global entrepreneurship index

Johannesburg – South Africa ranked 46th in terms of its entrepreneurial environment in the Global Entrepreneurship Index for 2016.

South Africa scored 230 points on the index. The Ashish J. Thakkar Global Entrepreneurship Index 2016 looks at 85 countries.

The entrepreneurial environment in these countries are assessed across five pillars: policy, infrastructure, entrepreneurial environment, education and finance. The indices for these pillars were collected from a various sources, including the United Nations and World Trade Organisation statistics.

South Africa scored number 35 for policy, 42 for infrastructure, 51 for education, 36 for entrepreneurial and 66 for finance. Singapore topped the list with 395 points, followed by New Zealand with 394 points and Denmark with 388 points.

Namibia was the top performer for the African continent, ranking at number 42 with 241 points. This was followed by Rwanda with 240 points. Botswana came in at position 44 with 232 points. Zambia came in at number 55 with 214 points.

The Democratic Republic of the Congo (DRC) performed the worst, scoring 94 points.

“Entrepreneurial growth is key to reducing unemployment and powering growth globally,” the report stated.

The aim of the index is to highlight which countries are performing well and which ones could improve.

Findings revealed that countries with the right policies and infrastructure to support entrepreneurial behaviour are likely to succeed. Europe performed well in this area as it has policies put in place by government that encourages entrepreneurship. New Zealand scored the highest with 96 points. Poor performers include Venezuela, Zimbabwe, and the DRC.

In terms of infrastructure, the Netherlands and Singapore both achieved the top places.

Infrastructure supportive of entrepreneurship includes having a stable supply of energy, a functioning transportation system, access to the internet, and a population connected with mobile phones, stated the report. Digital infrastructure is key to entrepreneurial growth.

African countries, though, have narrowed the gap in terms of digital infrastructure, said the index.

The education pillar assesses the country’s education system, as it has a bearing on the country’s ability to produce entrepreneurs. New Zealand was the top performing country in this regard scoring 92 points. South American countries particularly performed well in this pillar.

The entrepreneurial environment pillar looks at conditions in society that entrepreneurs have to face. 

Among factors assessed are the attitude and perceptions of entrepreneurship, as well as the availability of new technology and ideas and if equal opportunities are available to all. Scandinavian countries performed well here. Sweden topped the list, followed by Finland and Norway.

The finance pillar looks at a country’s ability to provide a supportive financial environment for entrepreneurs to raise capital. It further looks at whether markets are monopolistic.

Singapore topped the list again. African countries such as Zambia, South Africa and Rwanda performed well here.

“Low tax rates and access to finance are vital to encouraging investment and nurturing young start-ups,” stated the report.

Challenges for African entrepreneurs

Given the younger population in Africa, the continent is expected to become an entrepreneurship hub.

“However, Africa is not yet meeting its entrepreneurial potential,” the report stated.

Among the challenges impacting entrepreneurs is the political stability, underdeveloped infrastructure, poor education and under-diversified economies.

“Infrastructure and education are the pillars in which Africa is particularly weak,” the report stated.

This is mainly due to a lack of electricity and technology such as telecommunications and internet access which is dependent on energy.

Top performing African countries


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