Is Uganda the most entrepreneurial economy on the planet? Yes, if you were to take the World Economic Forum’s and Business Insider’s word on it: https://agenda.weforum.org/2015/06/the-9-countries-with-the-most-entrepreneurs/. According to them, the US only ranks 41th globally for entrepreneurship and the UK 37th.
So what gives? Should entrepreneurs now flock to Uganda to enjoy the great entrepreneurial environment there? Or to Cameroon (4th)? Or perhaps to Angola (6th)?
Not so quickly. Turns out the ranking quoted by WEF is based on a simplistic count of self-employed individuals in the economy: the more you have people pursuing self-employment, the more ‘entrepreneurial’ the country becomes according to this ranking.
So we see WEF falling into a classic trap. Self-employment is not entrepreneurship. In developing countries, self-employment simply reflects the inability of the economy to create high-quality jobs. This is why so many people in developing economies end up selling fruit and baskets in street corners. This is not entrepreneurship.
The essence of entrepreneurship is not quantity – it is quality. Quality, in entrepreneurship, is a combination of two things: (1) the ability and innovative and growth aspirations of the entrepreneur, plus (2) the ability of the country’s entrepreneurial framework conditions to support the full realisation of the new venture’s growth potential. It is the combination of the quality of the entrepreneurs and the quality of the country’s framework conditions that drives economic development.
In developing countries, you need less entrepreneurs, not more. You need quality and ability to scale.
Someone should tell that to WEF.