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Entrepreneurs – stuck on the starting blocks?

10 June 2010

Innovation is sometimes thought of solely in terms of new inventions. But, as the OECD’s Andrew Wyckoff explains, it’s much more than that – Apple’s iPod was innovative, not because it contained much in the way of new technology but because of clever design and shrewd marketing.

That sort of innovation can drive economic growth. As the OECD’s Innovation Strategy demonstrates, there are real obstacles to overcome in many countries first.

Barriers to entrepreneurship

Underlying data (xls)

Some of these concern entrepreneurship – barriers that make it hard for people to set up new businesses or get a foothold in a market. As the chart below shows, these barriers are highest in Turkey and lowest in the United Kingdom. Each country’s score is based on three areas:

  • Administrative burdens on start-ups: Basically, the speed and ease of setting up a new firm. This has been getting easier in many countries, but on average worldwide it still takes eight procedures and 36 days to start a business.
  • Barriers to competition: Covers things like regulations that block newcomers from providing telecoms, electricity, gas and postal services, and rules that may encourage monopolies and cartels.
  • Complex regulations: licences, permits and the simplicity of procedures, etc.

The good news for entrepreneurs is that these barriers have fallen in most OECD countries, though some countries still have a long way to go.

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