Pillar 11: Business dynamism

Pillar 11: Business dynamism

What does it capture? The private sector’s capacity to generate and adopt new technologies and new ways to organize work, through a culture that embraces change, risk, new business models, and administrative rules that allow firms to enter and exit the market easily.

Why does it matter? An agile and dynamic private sector increases productivity by taking business risks, testing new ideas and creating innovative products and services. In an environment characterized by frequent disruption and redefinition of businesses and sectors, successful economic systems are resilient to technological shocks and are able to constantly re-invent themselves.

 

11.01 Cost of starting a business

Expressed as a percentage of the economy’s income per capita. | 2017

The costs include all official fees and fees for legal or professional services if such services are required by law or commonly used in practice. Fees for purchasing and legalizing company books are included if these transactions are required by law. Although valueadded tax registration can be counted as a separate procedure, value-added tax is not part of the incorporation cost. More details of the methodology can be found at http://www.doingbusiness. org/Methodology/Starting-a-Business.

Source: The World Bank Group.

 

11.02 Time to start a business

Number of calendar days needed to complete the procedures to legally operate a business. | 2017

The measure captures the median duration that incorporation lawyers or notaries indicate is necessary in practice to complete a procedure with minimum follow-up with government agencies and no unofficial payments. If a procedure can be sped up at additional cost, the fastest procedure, independent of cost, is chosen. More details about the methodology can be found at http://www.doingbusiness.org/Methodology/Starting-a-Business.

Source: The World Bank Group.

 

11.03 Insolvency recovery rate

Recorded as cents on the dollar recovered by secured creditors through judicial reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. | 2017

The calculation takes into account the outcome, whether the business emerges from the proceedings as a going concern or the assets are sold piecemeal. Then the costs of the proceedings are deducted (1 cent for each percentage point of the value of the debtor’s estate). Finally, the value lost as a result of the time the money remains tied up in insolvency proceedings is taken into account, including the loss of value due to depreciation of the hotel furniture. More details about the methodology can be found at http://www.doingbusiness.org/Methodology/ResolvingInsolvency.

Source: The World Bank Group.

 

11.04 Insolvency regulatory framework

Score on an index that measures the adequacy and integrity of the legal framework applicable to liquidation and reorganization proceedings. Scores range from 0 to 16, with higher values indicating insolvency legislation that is better designed for rehabilitating viable firms and liquidating nonviable ones. | 2017

The index is calculated as the sum of the scores on the commencement of proceedings index, management of debtor’s assets index, reorganization proceedings index and creditor participation index. Source: The World Bank Group. 11.05 Attitudes toward entrepreneurial risk Response to the survey question “In your country, to what extent do people have an appetite for entrepreneurial risk?” [1 = not at all; 7 = to a great extent] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

11.06 Willingness to delegate authority

Response to the survey question “In your country, to what extent does senior management delegate authority to subordinates?” [1 = not at all; 7 = to a great extent] | 2017– 2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

11.07 Growth of innovative companies

Response to the survey question “In your country, to what extent do new companies with innovative ideas grow rapidly?” [1 = not at all; 7 = to a great extent] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

11.08 Companies embracing disruptive ideas

Response to the survey question “In your country, to what extent do companies embrace risky or disruptive business ideas?” [1 = not at all; 7 = to a great extent] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.