If you were to start a business, how well would you thrive? Is your government supporting you well? Starting a business could really be difficult especially in developing countries where governments provide little support to ensure businesses thrive.
In Nigeria, for example, registering a business could take as long as two to three months compared to 48 hours in the United Kingdom. After registering, the operating costs are high. Poor electricity, the high cost of financing, amongst other things, could literally frustrate startups to shut down.
The high rate of unemployment worldwide has generated a need for rapid interventions. South Africa’s 2016 third quarter unemployment rate was 27.1 percent–it’s highest in thirteen years.
According to the International Labour Organization (ILO), in 2015, global unemployment stood at 197.1 million. The ILO estimates the number will have risen by 2.3 million by the end of 2016.
The only solution to this global epidemic is entrepreneurship. However, for entrepreneurship to thrive a viable entrepreneurship ecosystem has to be created to make businesses function well.
Africa’s youngest billionaire, Ashish J Thakkar through his foundation, Mara Foundation, launched an index to assess countries and their performance on how well they have helped entrepreneurs thrive.
The index–Ashish J Thakkar Global Entrepreneurship Index–measures entrepreneurial environments around the world. The index evaluates 85 countries against a set of criteria that spans policy, infrastructure, education, entrepreneurial environment and finance. Ventures Africa had an exclusive interview with Rona Kotecha, Executive Director at Mara Foundation on an overview of the index.
Ventures Africa: What initiated the development of the Ashish J Thakkar Global Entrepreneurship Index?
Rona Kotecha: The Ashish J Thakkar Global Entrepreneurship Index 2016 is the brainchild of serial entrepreneur, Ashish J Thakkar, who started his first business at the age of 15. Together with his family, he came to understand first-hand the challenges faced by young entrepreneurs around the world and wanted to do something positive to address this.
After launching Mara Mentor–a mentoring app for entrepreneurs–in 2011, we at the Mara Foundation felt there was a real lack of understanding of entrepreneurial environments around the world and a worrying disconnect between policy makers and young business leaders. With the Ashish J Thakkar Global Entrepreneurship Index, we hope we have created a useful tool for the public and private sectors and entrepreneurs to help bridge that knowledge gap.
VA: Is there a particular reason for selecting the five metrics currently in use? Are you increasing the number of metrics in future reports (possibly a measure for consumer acceptance)?
RK: The index assessed 85 countries overall across 5 broad pillars – Policy, Infrastructure, Education, Entrepreneurial Environment and Finance. Each of these pillars contains 3-5 sub-indices within them. These sub-indices were collated from a variety of sources such as UN and WTO statistics. We are actively seeking feedback from our readers and may look to increase or decrease the number and focus of the sub-indices in future reports. The index would be updated annually.
VA: Does Mara Foundation intend to partner with governments to help stimulate a better entrepreneurial environment, which would improve ranking?
RK: We would like to work with governments to identify the actionable policy recommendations within the Index in order to foster better entrepreneurial environments and improve overall rankings within the Index.
VA: What is the prospective plan for the Global Entrepreneurship Index Rankings? Are you expanding the number of countries to be surveyed on the index?
RK: The rankings are there to assess each country’s entrepreneurial environment and to share learnings from the higher ranked countries. The goal is not to ‘name and shame’ the worst performers – rather, we want to focus on learning from the best-in-class and ascertain how we can adopt these benchmarks in other markets. Over time, we hope to expand the number of countries included in the Index, subject to quality data being available.
VA: Is Mara Foundation going to focus only the index or expanding towards aiding policy creation and implementation?
RK: We would like to focus on the Index and assist governments to identify the policies that need to be created and implemented.
VA: Africa’s countries ranked low on the Index especially in the area of infrastructure. What is your view on the future of entrepreneurship in Africa? How do you think African countries can improve their rankings on the index? What specific recommendations would you proffer to African countries?
RK: One of the main barriers to Africa’s economies and entrepreneurs is the lack of infrastructure, especially access to electricity. There is simply not enough power for the needs of its population and its businesses. Where supply exists, it is often sporadic and unreliable.
That aside, African countries show huge potential not only for entrepreneurship in general but especially entrepreneurship among women. The majority of women in sub-Saharan African countries are employed, far higher than the OECD average.
As in all 85 countries, but especially those surveyed in Africa, making the five Pillars work together in harmony is critical, and will require the initiative and action of senior policy makers both within each country and at a cross-border level in order to fully succeed.
