Entrepreneurship Evolution in Terms of Economic Development Stages. Retrospective Analysis

By Iliescu, Elena Mihaela | Global Economic Observer, July 1, 2016 | Go to article overview

Entrepreneurship Evolution in Terms of Economic Development Stages. Retrospective Analysis


Iliescu, Elena Mihaela, Global Economic Observer


1. Introduction

Economic growth, sustainability, sustainable development, as determinant drivers of the humanity's general progress, through positive changes seen both from the point of view of the macroeconomic results and the social structure, national institutions and population behavior, represents and indispensable instrument for fighting against the current economic, social and environmental issues (social inequalities, poverty, global warming).

From this perspective, entrepreneurship as a lever to achieving these objectives, represent the main focus of policies, programs and national, regional and global strategies. This is because, the studies, based on empirical data, reflect the same conclusion: the volume, the structure, the quality and the intensity of entrepreneurial activities decisively influence the national economies' competitiveness and the increase in competitiveness represents a fundamental factor of the economic development.

If, from a theoretical point of view the positive correlation between entrepreneurship and the evolution of the economic development stage is clear and undeniable, the reality reflects the fact that, in practice, between the two there isn't always a linear relationship nor a generally valid one.

In order to illustrate the viability of this standpoint, we shall make the transition from theory to practice through a retrospective analysis of the correlation between the entrepreneurship evolution rate and the evolution of competitiveness of national economies.

Therefore, we shall analyze the indicators published in one of the most known annual reports in terms of entrepreneurship, The Global Entrepreneurship Monitor, the only one that relates also to the development stage of national economies. Considering that the reference point for grouping countries by stages of development is represented by the Global Competitiveness Report, which starting with 2008 introduced the classification of countries following Michel Porter's model, we shall analyze further on the correlation between the entrepreneurship rate and the global competitiveness index, as a determining factor of the economic development stage, along with GDP/capita.

For this purpose, the evolution of the two indicators will be analyzed, in the period 2008-2015, based on data published in the two annual reports.

2. The analysis of the correlation entrepreneurship-competitiveness

2.1. Methodological classifications

The inter-conditional relationship between the entrepreneurship rate and the global competitiveness index shall be illustrated using scatterplot diagrams created with Microsoft Office Excel 2010, considering the following technical aspects:

- to synthesize entrepreneurship evolution, it shall be analyzed considering the prism of the entrepreneurship total rate (ER), calculated as a sum between the early stage entrepreneurship rate and the consecrated entrepreneurship rate.

- to ensure the comparability of the two variables, the Global Competiveness Index, was also expressed as a percentage, as a share of the index of each analyzed country, in the total maximum score;

- considering that the analysis on development stages according to the Porter model was introduced in reports starting with 2008, the period under analysis is comprised between 2008 and 2015;

- since the GEM reports do not comprise the same countries each year and the need to include in this study only the countries for which we have available data for each year of the concerned period, the analysis is narrowed to a small sample of 30 countries.

- having in view the small number of countries included in this study and the fact that the analysis of the correlation between the two indicators is made based on the national economies development stage, I order to ensure, from a statistical point of view, a sufficient number of countries, for each group, reference is made only at the three main levels of development- factors driven economies , efficiency driven economies and innovation driven economies ( economies under transition at a superior stage, were included in the core group). …

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