Countries in this top group typically have light corporate regulation, making it easy for enterprises to form, close and operate. Governments actively encourage innovation and investment.
As in the SGI 2009, the USA is a standout leader in this criterion, with the financial crisis having had little effect on the fundamentals of its competitive, entrepreneurial economy. Denmark and New Zealand also have welcoming enterprise policy frameworks, though both struggle to create high-growth start-up companies.
Iceland, Australia and Canada have strongly encouraged innovation, though with middling success, while Switzerland competes through low corporate tax rates. In parallel with Iceland’s financial collapse have come sharply reduced interest rates.
Supporting innovation has been a policy priority in Sweden, but translation to new businesses is weak. The UK’s light-touch regulatory structure encourages activity, but R&D spending is low. Ireland’s low taxes have helped retain foreign firms despite the crisis.
Belgium’s high labor taxes and administrative complexity hampers small businesses, while Luxembourg’s attempts to reduce labor costs broke the traditional social-partner consensus.
Germany’s economy retains substantial bureaucracy, with venture capital needed to unlock a high innovation potential. The Netherlands is highly entrepreneurial, but with few new fast-growth firms, while Japan’s pro-business reforms have waned.
In this group, governments have typically sought to encourage economic activity, but administrative inefficiencies remain substantial.
Despite individually attractive policies, Austria, South Korea, Poland, Mexico and Spain all are near the OECD’s bottom in terms of the assessed ease of doing business. Under the Tusk government Poland in particular has worked to streamline this process.
The economic crisis forced a reversal of a deregulatory and privatization trend in Austria. South Korea’s sweeping anti-crisis measures helped its large, oligopolistic export sector, but smaller businesses suffered.
Portugal’s government has made significant strides in streamlining corporate regulation, but remains a deeply uncompetitive economy. Competition between individual Mexican states is making the country as a whole more competitive.
France and Spain have each passed a myriad of unfocused pro-business measures, with uncertain or even complicating effect.
In this group, enterprise policy has often had positive sectoral effects, but substantial economic distortions or imbalances remain.
Hungarian and Slovakian policymakers have successfully attracted foreign investment, but have offered insufficient support for smaller domestic firms. Increased attention to mid-level businesses in Turkey has not yet rendered them competitive on world markets, but the general business environment has improved.
Despite strong macroeconomic policy-making, Chile remains highly bureaucratic, and efforts to encourage private-sector innovation have not resulted in significant behavioral change. Italy and Greece have deeply inefficient, complicated administrations, with cumbersome regulations and poor infrastructure.