As the home of Silicon Valley and global success stories from Apple to Uber, you'd think that if there was one ranking the U.S. was sure to top it would be a list of the most entrepreneurial countries. After all, entrepreneurship is as all American as apple pie, huge food portions, and loud talking, right? (Take it from me, an expat, we're known for all these things.)
But sorry, nope. Not if a new ranking compiled by the Wharton School, BAV Consulting, and U.S. News & World Report is to be believed. To figure out which country has earned the crown as the most entrepreneur-friendly, the team behind the project surveyed 16,500 people from around the world on 65 different national attributes.
Some complicated statistical manipulations were then done on these sub-categories (Knowledge@Wharton has the details if you're interested) to come up with the final results. What did they look like? Here's the top ten:
- United States
- United Kingdom
Well, third isn't too bad. Plus, it's important to note this is a ranking of public perception, not underlying economic fundamentals. But as Wharton marketing professor David Reibstein notes in the Knowledge@Wharton write-up of the ranking, a country's brand and reality tend to go hand in hand -- though not always, as a deeper dive into the results reveals.
How did Germany and Japan come out on top?
How did Germany grab the top spot? "Germany scored well on perceptions of all 10 entrepreneur-related attributes measured, notably earning a perfect 10 for 'well-developed infrastructure' and a near-perfect 9.8 for 'educated population,'" notes the Wharton article. Plus, "Germany has long been friendly to small- and medium-sized enterprises," and "these businesses continue to be recognized worldwide for precision manufacturing."
"When you think about Germany, you think of great engineering," Reinstein noted.
Confused as to why Japan ranked so high? So were several academics and executives involved in the study who declared themselves "somewhat surprised that Japan was perceived as entrepreneurial enough to earn second place." They guess that Japan's reputation for high-tech innovation in fields like robotics may have swayed public perception. They also note that marketing can trump actual output.
Israel, for instance, is home to a huge tech industry, but "many innovative products coming out of Israel are deliberately not identified as such due to political controversies," notes the write-up. Hence, the country's surprisingly dismal showing in 21st place.
Where could the U.S. improve?
What held the U.S. back from the top slot? Not easy access to capital or connections to the rest of the world, two categories where the country excelled. Instead, the problem seems to be a sense that America has less transparent business practices and a less skilled workforce than some global competitors.
"Reibstein believes this perception stems from the widely reported lackluster performance of American students in math and science," notes the Wharton write-up. "According to the Organisation for Economic Co-operation and Development, which sponsors the Program for International Student Assessment, the U.S. most recently placed only 35th in math and 27th in science out of 64 countries."
Does this ranking surprise you?