The enterprise environment in Africa and the Middle East has improved dramatically and more markedly than anywhere else in the world over the past 10 years, a study has shown.
The report, published by Barclays Wealth and the Economist Intelligence Unit, revealed entrepreneurs’ perceptions of how business environments have evolved across the globe.
Respondents, including almost 1,000 entrepreneurs and a panel of business experts, assessed business environments on a number of factors, such as the regulatory framework and availability of talent, and looked at how these have changed over the past 10 years.
Coming top of the Enterprise Environment Index, the Middle East and Africa were deemed to have the most noticeably improved prospects for international expansion and potential for innovative ideas, which in turn makes these areas more attractive to entrepreneurs and investors. This was attributed to factors such as liberalisation, privatisation and the development of financial hubs over the past decade.
Asia Pacific also saw a significantly improved environment for entrepreneurship, although the most notable improvements surrounded options for selling a business and raising finance. These changes were partly attributed to the blossoming stock markets and a record number of IPOs in India and China.
Gerald Aquilina, head of international private banking and vice chairman at Barclays, commented: “While some regions like Europe and North America are established and have set a benchmark, attractive growth patterns have emerged in the Middle East and North Africa. These regions are setting a dynamic pace and it’s clear that entrepreneurs are taking advantage of this.”
The study also pointed to a number of cultural factors that have contributed to the fruition of enterprise in these regions, with developments such as the increasing recycling of oil wealth into education leading to more start-ups in these areas and leading to entrerpeneurship becoming more widely recognised and celebrated.
"The mindset and positive approach to starting and building a business is the culmination of a concerted effort to promote enterprise in these regions," added Aquilina. "Over the next few years, we should expect these cultural, political and economical shifts to continue shaping the entrepreneurial landscape, creating more opportunities for individuals and investors."
On the contrary, Europe was perceived as undergoing the least dramatic change. The cost of doing business and regulatory constraints were also said to have worsened and to be stifling European enterprise. In spite of the credit crisis, North America was still regarded as the most-improved region for the prospect of raising finance.
Aquilina said: "Now that we are in the middle of heavy economic volatility, we anticipate that entrepreneurs will not only be tested, but that many will also thrive. For some businesses the playing field has levelled out and there is already less conpetition, lower costs and the opportunity to create new ideas."
© Crimson Business Ltd. 2008