Economic Frontiers: The Ascendance of Entrepreneurship in the East

The Global Entrepreneurship Monitor (GEM) survey has crowned the United Arab Emirates (UAE) as the premier destination globally for initiating a new venture for the third consecutive year. This accolade underscores the UAE’s concerted drive towards cutting-edge technology and economic diversification away from oil, spearheaded by government initiatives. Notably, four of the top five countries in the GEM rankings hail from the Middle East or Asia, with India securing second place, Saudi Arabia third, and Qatar clinching the fifth spot, with Lithuania being the sole exception in fourth place. This pattern underscores a discernible eastward shift in the entrepreneurship landscape over the past half-decade, closely paralleling the evolving economic center of gravity worldwide.

The UAE’s ascent to the top position has been marked by consistent progress, elevating from fifth place in 2019 to the pinnacle of the rankings. Concurrently, Saudi Arabia has surged from 17th to third place, while India has vaulted from sixth to second, rebounding from pandemic-induced setbacks.

Amidst this rise of eastern economies, factors such as heightened governmental support for entrepreneurial endeavours, an increased focus on entrepreneurship education, and cultural shifts towards embracing business activities have been instrumental. In the UAE, initiatives like Projects of the 50 have introduced priority visas for entrepreneurs and outstanding students, particularly in burgeoning fields like artificial intelligence and digital currencies. Moreover, leveraging events such as Expo 2020, the Emirates has positioned itself as an attractive business destination by instituting regulatory reforms, including the allowance of 100% foreign ownership of companies since 2021. Similarly, Saudi Arabia’s Vision 2030 prioritizes entrepreneurship as a key component of economic diversification, with initiatives aimed at fostering start-up growth and facilitating access to finance, especially for female entrepreneurs.

In India, the New Education Policy of 2020 underscores a renewed emphasis on innovation, complemented by nationwide initiatives like the Atal Tinkering Lab, which cultivates a spirit of inquiry and design thinking among students. Additionally, popular television shows like Shark Tank have ignited conversations around entrepreneurial concepts, further fostering a culture conducive to business creation.

The contrasting fortunes of western economies in the GEM rankings over the past five years have been conspicuous. Former stalwarts such as Switzerland, the Netherlands, Norway, and the United States have witnessed a decline in their standings, attributed partly to challenges stemming from inflationary pressures and higher interest rates post-pandemic. Notably, the UK, ranked 21st five years ago, has marginally slipped to 22nd place.

While western economies retain an edge in business services, eastern counterparts exhibit a pronounced focus on consumer-centric sectors like retail, hospitality, and personal services. However, the dominance of consumer-oriented businesses underscores the imperative for fostering business services, which offer higher margins, scalability potential, and formidable barriers to entry, critical for sustained economic growth.

Furthermore, entrepreneurship education emerges as a pivotal yet neglected facet across many economies, with 31 out of 49 countries rating it as the weakest aspect in the GEM survey. The cultivation of skills such as creativity, innovation, and a growth mindset through entrepreneurship education is essential in navigating a landscape defined by rapid technological disruptions.

In essence, as the dynamics of global entrepreneurship undergo a seismic transformation, the primacy of fostering conducive ecosystems, nurturing entrepreneurial talent, and promoting innovation becomes paramount for nations aspiring to thrive in an increasingly competitive global economy.