The global entrepreneurship index as a benchmarking tool? Criticisms from an efficiency perspective
| Pages | 190-212 |
| DOI | https://doi.org/10.1108/JIC-09-2019-0218 |
| Published date | 25 March 2020 |
| Date | 25 March 2020 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
| Author | Edmundo Inacio Junior,Eduardo Avancci Dionisio,Bruno Brandão Fischer,Yanchao Li,Dirk Meissner |
The global entrepreneurship index
as a benchmarking tool? Criticisms
from an efficiency perspective
Edmundo Inacio Junior and Eduardo Avancci Dionisio
School of Applied Sciences, University of Campinas–UNICAMP, Limeira, Brazil
Bruno Brand~
ao Fischer
School of Applied Sciences, University of Campinas–UNICAMP, Limeira, Brazil and
National Research University Higher School of Economics, Moscow, Russia
Yanchao Li
Department of Finance, Competitiveness and Innovation Global Practice, World Bank,
Washington, District of Columbia, USA, and
Dirk Meissner
National Research University Higher School of Economics, Moscow, Russia
Abstract
Purpose –Based on an efficiency analysis of the Global Entrepreneurship Index (GEI), the purpose was to
demonstrate that the Key Performance Indicators’analysis leads to a misinterpretation of the dynamics of
National Systems of Entrepreneurship (NSEs). This might hamperthe formulation of sound initiatives in other
economies, with relevant implications for developing countries.
Design/methodology/approach –This study categorized GEI indicators into output and input indicators.
Following this procedure, each dimension was analyzed separately and then compared to each other,
consideringcountries’productivity rates. The main focus is given to the case of the US, the usual benchmark for
NSEs and leader in the GEI Index. Lastly, a taxonomy of NSEs according to their efficiency levels was
developed.
Findings –The findings of the analysis demonstrates that innovation-driven economies with lower positions
in GEI ranking often have higher productivity rates when compared to economies with higher positions in GEI
ranking. Specifically, the US appears not to be a good benchmark in terms of NSE efficiency.
Research limitations/implications–The study’s approach is limited in scope by data availability on NSEs
and the use of GEI, a representation of aggregate patterns of country-level entrepreneurial dynamics. More
refined data are needed in order to clarify some insights from this research.
Practical implications –The perception of systemic efficiency should be considered more thoroughlywhen
designing dedicated entrepreneurship-oriented policies in other countries that aim at establishing a more
vibrant entrepreneurial system while facing resource constraints.
Social implications –Simplistic views of systemic aspects may hamper the formulation of sound
entrepreneurship-oriented initiatives with particularly relevant implications for public policy in laggard
economies.
Originality/value –The value of this article relies on applied a simple metric –efficiency ratio –order than,
e.g. data envelopment analysis to portray a key issue related to the interpretation of supranational rankings
JIC
22,1
190
JEL Classification —M2, O5
Dirk Meissner’s and Bruno Fischer’s contribution to this article is based on the study funded by the
Basic Research Program of the National Research University Higher School of Economics (HSE) and by
the Russian Academic Excellence Project ‘5-100’.
Bruno Fischer acknowledges funding from the S~
ao Paulo Research Foundation (Fapesp Grant
#2016/17801-4).
Eduardo Avancci Dionisio acknowledges this study was financed in part by the Coordenaç~
ao de
Aperfeiçoamento de Pessoal de N
ıvel Superior - Brasil (CAPES) - Finance Code 001.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 11 September 2019
Revised 17 January 2020
Accepted 23 January 2020
Journal of Intellectual Capital
Vol. 22 No. 1, 2021
pp. 190-212
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-09-2019-0218
related to the entrepreneurship ecosystem make mainly by policymakers and scholarsthat is: pick the 1st one,
follow the leader.
Keywords National systems of entrepreneurship, High-impact entrepreneurship, Global
entrepreneurship index
Paper type Research paper
1. Introduction
Developed and developing economies alike face the challenge of ensuring the promotion of
economic prosperity through production expansion and renewal of established economic
actors. One way to meet these needs is via entrepreneurship support policies, especially those
related to creating higher value-added products and services originated from technological
innovation taking place at micro, small and medium-sized firms (
Acs et al, 2015). In this
regard, knowledge-intensive entrepreneurial activity is perceived as the key factor or
competitiveness of a country (Audretsch et al., 2006;H
ebert and Link, 2006;Saxenian, 1994).
Among the arguments that sustain these propositions are those related to resilience, as
innovative firms recover more quickly from economic downturns (Wymenga et al., 2011).
Also, results of entrepreneurial action can involve the creation of high-growth firms, entailing
the creation of new skilled jobs and the introduction of new products and processes (Kuratko
and Hodgetts, 2001;Schumpeter, 1934). In its turn, these impacts can be translated beneficial
shifts in market dynamics, reducing inefficiencies within the economic system (Braunerhjelm
et al., 2010).
For these reasons, the need for analytical tools capable of monitoring the performance of
entrepreneurship policies has also increased (Shane, 2009). When it comes to such
evaluations, the Global Entrepreneurship Index (GEI) (
Acs and Szerb, 2009) stands out as
a benchmarking guide for policymakers. Since 2009, GEI analyzes the complex relationships
between institutional context and entrepreneurs with a focus on the connections between
economic growth and high-impact entrepreneurship. This line of research is based on the
hypothesis that entrepreneurial activity depends on the quality of systemic interactions
within productive systems. To that end, dedicated policies must promote an institutional
environment that stimulates the sort of entrepreneurship driven by opportunity, thus
generating higher levels of socioeconomic surplus (
Acs et al., 2015;
Acs et al., 2017).
One of the key results of the GEI rankings is that the US consistently holds the position of
entrepreneurial leader in the world (2014–2017) (
Acs et al., 2015,2017;
Acs et al., 2014a,b;
Acs
et al., 2016). However, as demonstrated by Edquist and Zabala-Iturriagagoitia (2015),
international rankings often offer misguided insights based on a linear understanding of the
innovative processes and hardly take national/regional specificities into account. While
valuable, these tools consider high levels of aggregate input and output as indicators of better
performance. This approach, however, neglects the inherent relationships of these two
dimensions in defining systemic efficiency, i.e. the simple productivity assessment as the
ratio between outputs and inputs (Edquist and Zabala-Iturriagagoitia, 2015).
Building on this criticism, we address the issue of “additive”approaches as effective tools
in offering reliable benchmarks for entrepreneurship policy. Accordingly, our research
question can be stated as follows: Does the Global Entrepreneurship Index offer a consistent
guide for entrepreneurship policy benchmarking? As stated, we investigate this inquiry from a
“systemic efficiency”viewpoint. This is a particularly relevant assessment for policymaking
in the developing world, where the US is often used as the example to be followed. This
situation may end up shaping ineffective initiatives in places where critical resources are
scarce.
For our empirical exercise, we employ data provided by the GEI 2017 to assess the
productivity of the US system of entrepreneurship and discuss whether it can be taken as an
entrepreneurial benchmark for countries. Our analysis suggests that the entrepreneurial
The GEI as a
benchmarking
tool
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