The Geography of Superentrepreneurs | Newgeography.com


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Which parts of the world have produced the most successful entrepreneurs? This question is answered in the Superentrepreneur project. This project explores high-end entrepreneurship and focuses on the nearly 2,500 people around the world who have built billions of dollars in wealth by starting new businesses or growing small businesses into large, successful ventures . It’s about measuring the tip of the iceberg; If we look at super entrepreneurs, we can understand which countries are generally more conducive to free enterprise.

Overall, it is the US that leads the world when it comes to high-impact entrepreneurship. The US has 3.1 super entrepreneurs (self-made billionaire entrepreneurs) per million adults, far exceeding other major economies. For comparison, there are 1.7 super entrepreneurs per million adults in Canada and 1.1 in Oceania. China has a higher concentration of new influential entrepreneurs (0.9) compared to Europe (0.8). Given the level of economic development in Europe, this part of the world lags behind in terms of effective entrepreneurship. The lack of super-entrepreneurs reflects that Europe is still largely betting on old fortunes rather than new ones created by new companies.

At the same time, there is a European entrepreneurial paradox. The paradox is that half of the countries in the top 10 list with the most super-entrepreneurs per capita are in Europe – while Europe as a whole has a relatively limited concentration of super-entrepreneurs. Singapore has the highest concentration of super entrepreneurs in the world, followed by Switzerland, one of Europe’s leading knowledge economies. Cyprus, Sweden, Ireland and the UK are four other European economies that make the global top 10. Cyprus is a small country with a favorable tax system, Sweden is Europe’s top spendr on research and development, and Ireland’s free approach to business has attracted many tech companies – not least from the US – to the fast-growing island nation. The UK is the most entrepreneurial of Europe’s major economies.

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But the other major European economies like France, Germany, Italy and Spain have few super entrepreneurs. Eastern European countries lack the scale and market development to produce many super entrepreneurs. Therefore, even compared to China, Europe has a lower concentration of entrepreneurs with high impact per million adults. Still, Europe has a higher standard of living than China, but the difference is that much of the wealth in Europe is old, while much of the wealth in China was established in the past generation.

Super-entrepreneurs are pushing for various forms of innovation in the companies they create. The main benefit to society is job creation, as one more super-entrepreneur per million adult residents is associated with 0.88 percentage points lower unemployment. The effect is strongest for the broad middle class with medium education. For those with a college education and perhaps additional professional training, but no college or university degree, one more super entrepreneur per million adults is associated with 1.1 percentage point lower unemployment.

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Sometimes the self-employment rate is used as a measure of entrepreneurship. However, the two concepts are very different. The global trend is that less economically advanced countries have many self-employed but few super-entrepreneurs. In India, for example, 76 percent of adults are self-employed and only 0.1 in a million adults are super entrepreneurs. In the US, on the other hand, 6 percent of the adult population is self-employed, while there are 3.1 super entrepreneurs per million people. In countries with well-functioning market economies, entrepreneurs create jobs for large groups of people, while in countries with restrictions on free enterprise, many become self-employed out of necessity.

Most super-entrepreneurs are men, and only 5 percent of the nearly 2,500 super-entrepreneurs worldwide are women. Up to 8 percent of Chinese high-impact entrepreneurs are women. Africa and Central and Latin America have few super entrepreneurs, but a fairly high proportion of them are women. In the US, 4 percent of super-entrepreneurs are women, compared to less than 3 percent in Europe and Canada. In Oceania, all super entrepreneurs are men. The pattern we’re seeing is that parts of the world that are open to entrepreneurship in female-dominated fields like education, healthcare, and elder care are those where many women are becoming self-made billionaires.

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We find that numerous policies are positively associated with the promotion of super-entrepreneurs. Strengthening property rights, making corporate governance easier, reducing taxes on profits and capital gains, and improving knowledge levels in schools are the changes needed for countries to have more high-end entrepreneurs. Again, it’s about measuring the tip of the iceberg. Countries striving to attract more super-entrepreneurs generally need to embrace pro-business policies. While this will result in some new super-entrepreneurs, it will also result in many new mid-sized companies thriving. Fostering high-end entrepreneurship is linked to job growth and technological development. Even for those countries that are already doing well, there are good reasons to continue with business-friendly policies.


Authors:
Nima Sanandaji, Director of the European Center for Entrepreneurship and Policy Reform
Klas Tikkanen, Chief Operating Officer of Nordic Capital
Kristoffer Melinder, Managing Partner of Nordic Capital

Mission statement: World map via Wikimedia.



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