In 2013 the Chilean government inaugurated a series of entrepreneurship policy reforms to make it easier to start and run a new business in the country. As part of this, a new online platform was launched that allowed aspiring entrepreneurs to start a business in just one day, in one step and at zero cost.
The move had a dramatic impact on the entrepreneurship landscape in the country – driving new business registrations up by more than 50% in one year. Typically, it had taken 3-5 weeks to start a company at a cost of roughly $650.
The idea was not novel. Chile had borrowed it from another country on the other side of the world – New Zealand – and had adapted it to their own purposes. And that, says Mike Herrington, Executive Director of the Global Entrepreneurship Monitor (GEM), is exactly the motivation behind the publication of the GEM Policy Briefs – the latest batch of which were released this February.
The 2017 GEM Policy Briefs highlight and analyse policy initiatives that have had a significant and measurable impact on improving entrepreneurship activity in selected countries around the world. The latest report features 37 countries each with its own unique policy lesson. “It is hoped that other countries can learn from the success of these initiatives, not necessarily by copying them but by adapting them to their own environment, exactly as Chile did with such success,” said Herrington.
“Effective implementation of policy of course depends on acknowledging and taking into account the particular context of specific economies (including the development profile, national culture, and political and social dynamic). Entrepreneurship ecosystems vary greatly across development levels as well as geographic regions.”
Policy successes documented in the 2017 report vary from an R&D tax credit scheme for businesses doing research and development in Norway, which helped increase the number of businesses investing in R&D in that country, to a programme in Malaysia offering loans to small retailers to modernise their stores and to fund business support interventions to, for example, improve supply chain and business processes. As a result of this intervention, 77% of participants reported increasing their revenue with 45% experiencing a revenue increase of more than 40%.
In Turkey, a tax exemption scheme offering angel investors an up to 100% tax deduction on their investments into Turkish start ups saw the amount invested into early-stage companies grow by more than 200% in the first half of 2015, compared to the same period in 2014.
“These stories provide us with a vivid understanding of the power of policy in fostering innovation and entrepreneurship and creating jobs,” said Herrington. “A key goal of the GEM survey and policy briefs is to provide academics, educators, policy makers and practitioners with the evidence which will enable them to put into place precise, practical and targeted policies to strengthen the ecosystem that supports the efforts and ambitions of entrepreneurs.”
For 18 years, the GEM project has been collecting, analysing and interpreting data across the world on the perceptions, aspirations and intentions of entrepreneurs – as well as gathering data on what helps and hinders entrepreneurship in participating countries. By monitoring this information both at a country level and globally, GEM provides a unique data set that allows organisations and policy makers to obtain insights into the entrepreneurial patterns that prevail both in their own country – and around the world – and make evidence-based decisions on entrepreneurial policy.