Malawi has scored poorly on the 2017 Global Entrepreneurship Index (GEI) ranking on position 130 out of 137 global economies.
The report was released Monday by the Global Entrepreneurship and Development Institute.
Malawi only managed to score above Guinea, Burkina Faso, Bangladesh, Mauritania, Sierra Leone, Burundi and Chad on the index. Neighbouring Zambia is on position 96 on the index ahead of Tanzania on 118 and Mozambique on 123.
United States remains the country with the most favourable conditions for entrepreneurs to start and scale new businesses but with a slowly narrowing gap as other countries increase their support.
The 2017 GEI provides key information for policymakers and government leaders worldwide to strengthen their digital ecosystems and promote high-growth, high-impact entrepreneurship.
The index measures a country’s entrepreneurial ecosystem by combining individual data such as opportunity recognition, startup skills and risk acceptance, with institutional measures, including urbanisation, education and economic freedom.
These measurements help distinguish self-employment and replicative entrepreneurship from the innovative, productive and rapidly growing entrepreneurial ventures that drive real economic growth.
The authors estimate that improving conditions to help entrepreneurs create new companies could add $22 trillion to the global economy.
“China and India are strengthening their entrepreneurial ecosystems and creating billion dollar startups while Malaysia, Iceland and the Baltic states are emerging as digital entrepreneurship leaders,” Zoltan Acs said. Acs is the co-author of the report and University Professor at the Schar School of Policy and Government at George Mason University.
He said while institutional variables still need to be strengthened in emerging economies— where individuals are running ahead of policy makers — indeveloped countries individuals need to be shaken up.
“In other words, not enough people in developed countries— including the United States—are starting productive high-growth businesses,” Acs said.
Indigenous Businesses Association of Malawi President Mike Mlombwa said more needs to be done to promote entrepreneurship in the country.
Among other things, Mlombwa called for deliberate policies to encourage locals to participate in business.
“Business is what drives the economy. Most developed countries are prosperous because they have vibrant entrepreneurs who are deliberately and effectively supported by their respective countries. With the necessary support, we can make it,” Mlombwa said.
The top of the rankings were dominated by countries in the innovation-driven stage of development. Switzerland is second on the list top countries with a score of 78.0, with Canada (75.6), Sweden (75.5), Denmark (74.1), Iceland (73.5), Australia (72.5), the United Kingdom (71.3), Ireland (71.0) and Netherlands (67.8) completing the top 10.