In America, it’s long been a cornerstone of national pride – entrepreneurship. Americans pride themselves on their competitiveness and ingenuity. Is this self-view still accurate?
Here’s a look at recent data from the Organization for Economic Cooperation and Development (OECD). The data provides some interesting views on entrepreneurship around the globe.
The U.S. Picture
Here’s the U.S. picture. The figure captures new enterprises since 2007, meaning 2007 is set to 100. When the index is above 100, it indicates there was a net increase in new businesses (i.e. business starts less business closures is positive). When the index is below 100, it indicates that business closures surpassed business starts. Unsurprisingly for observers of how Americans respond to economic pressure, business creation took at dip during the recession, bottoming out in the second quarter of 2009 at 95.05.
Following the recession, business creation grew fairly moderately, experiencing some slight growth flattening during parts of 2011 and 2012.
Overall, since 2007 the OECD’s New Enterprise Index for the United States stands at 105.84, meaning that net business creation is up 5.84% since 2007. That’s about 6% growth over about 8 years. Seems low, certainly much lower than population growth, but how does it compare to entrepreneurship around the globe? The next graphic has that look.Source: OECD
The International Picture According to the OECD
Before addressing the details of the OECD figures, it’s important to note that only certain countries are captured in OECD figures. Notable missing figures include China, India, and Brazil, among others. With that said, here’s the look at business creation by country since 2007.
Before looking, which country would you guess would be on top? The Americans? The Germans? Who? Interestingly, it’s the French. Since 2007, the New Enterprise Index for France is up to 161.3, meaning new business creation is up 61.3%.
In second place is the United Kingdom at 151.4, followed by Australia at 150.3, Sweden at 127.7, and Portugal at 119.5.
On the other end, Spain is down to 68.4. Joining Spain near the bottom are Finland at 79.1, Russia at 81.2, Germany at 83.2, and Italy 84.6.
The Business Cycle
Perhaps just as interesting as who is on top is how individuals in various countries responded to the recession. It’s quite clear that the French responded to the recession by individuals starting new businesses. A similar response is present in Sweden and the United Kingdom.
On the other side, in most countries business creation dropped significantly during the recession.Source: OECD
The data does not indicate that Americans, in general, have or are losing their entrepreneurial spirit. However, they are definitely lagging behind many other countries around the world.