By Trilby Rajna, Editor, Approved Index
New research reveals an unlikely set of countries leading the way in the global entrepreneurship race, with the UK and US far off the pace…
Mention the word entrepreneur and the mind conjures up images of Bill Gates and Steve Jobs, tech giants, revolutionaries and billion pound empires. Entrepreneurs are lauded as national heroes, commanding admiration and respect from all levels of society and held up as an example of someone living their dreams and overcoming adversity. However, depending on where you are in the world, entrepreneurship might take on a very different face. In western countries, entrepreneurs may be advocates for lavish lifestyles and excess, but for most people, starting a business is simply a tool for survival.
You rarely associate the term entrepreneur with the corner shop owner, the fruit and veg seller or the person selling knick knacks at a local street market, but by definition, that’s exactly what they are. An entrepreneur is someone who starts a business taking on some form of financial risk, and financial risk is all relative. This helps explain why many of the countries ranking at the top of Approved Index’s latest analysis – which investigates the most entrepreneurial countries around the world – were not the ones you might expect.
The research estimates entrepreneurship as the percentage of an adult population who own or co-own a business that has paid salaries for more than three months, but less than 42. Although you might have guessed a country like the US would rank as most entrepreneurial, the analysis revealed an unexpected winner in Uganda.
With an entrepreneurship rate of 28 per cent, Uganda ranks in first place with almost double the entrepreneurship rate of Thailand, who comes in second place with 16 per cent.
Uganda’s title of most entrepreneurial country is especially surprising due to its recent violent past. Idi Amin’s reign of terror left the country in physical and economic turmoil but with fast population growth, which has led to an uncharacteristically young population facing financial hardship. It’s estimated that 77 per cent of Ugandans are below the age of 30 and 64 per cent of those who are aged 18-30 are unemployed. Although this is unfortunately not a dissimilar story to much of sub Saharan Africa, Uganda has a particularly harsh environment for youth.
But resilience must be in Uganda’s blood. Around the country, it would be difficult to ignore the entrepreneurial spirit and colour alive in street markets and small establishments. These may be launched out of necessity, but their inspired creativity is admirable.
From fresh food, to trinkets, to cobblers, honey makers and hand crafted furniture – you will find everyone is selling something.
High unemployment and survival are certainly core drivers for Uganda’s entrepreneurial environment, but that’s not to say there is no force beyond that. Government and non-government organisations aimed at training and supporting entrepreneurs and boosting the economy are springing up with great success. This, coupled with the newly laid fibre optic cables, has allowed the whole country to come online, connecting even rural villages to a world of resources. Uganda seems to be making lemonade out of the tough economic circumstances they have been dealt and they are doing so with creative flair.
It is not uncommon for times of difficulty to propel creativity and innovation and this appears to be a theme throughout the data; all the top 10 most entrepreneurial countries are developing nations. In fact, Australia is the first developed country to appear on the list and arrives at position 26.
Whether developed or not though, most entrepreneurs are not launching a business to achieve a life of luxury.
More often than not people turn to it in a time of need as a last resort. However, there are far more comforts at risk in richer countries, where assets are owned and a level of lifestyle becomes expected. For most people in the west, starting a new business would be a chance to be your own boss and potentially make good money, but for people in developing nations, it brings essential income which can be used for providing food and shelter for your family. When a comfortable lifestyle can be achieved by working for an established organisation, it is no wonder we, in developed nations, think twice about risking everything to begin our own venture.
The analysis raises an interesting question regarding what entrepreneurship really is and what are its drivers. It boils down to perspective. In the UK and the US, we view entrepreneurship as a way to achieve financial freedom, but to most of the world it is a method for combatting hardship and poor economic conditions. It becomes representative of necessity rather than aspiration and is pushed by a desire to make a basic living. However, these businesses are still making positive contributions to the economy and society as a whole, creating jobs and opportunity. Therefore, what this analysis does perhaps teach us is that hardship can be a real catalyst for creativity and that probably many more of us are capable of going it alone and starting our own venture than we think.