The world business environment has maintained 10 years of improvement, according to findings published by the Legatum Prosperity Index 2018. The research suggests that, across the globe, it is typically easier to start a successful business than it was a decade ago.
The prosperity index also reveals the last two years have shown especially positive increases in measures of global business environment health. The biggest increases in score were seen in the Asia-Pacific and Sub-Saharan African regions.
Legatum’s Prosperity Index was created as an annual publication 12 years ago. It seeks to measure and rank a nation’s growth and development across a range of prosperity measures, including the business environment. In 2018, 149 countries were included in the study. These 149 nations cover 99 percent of global GDP and 96 percent of the world population.
To measure the health and progress of a nation’s business environment, the prosperity index examines data related to the:
The best performing business environments globally in 2018, according to the Legatum Prosperity Index rankings, were the following countries:
This changes little from the 2017 rankings, with Singapore replacing Hong Kong in the Top 5.
However, significant progress was also seen elsewhere in the world in both 2017 and 2018, across a variety of regions and in a variety of measures.
There was positive news for Laos, where the nation’s business infrastructure saw a dramatic improvement in 2018. It was the world’s highest ‘riser’ in this measure. Data used for the prosperity index indicated overall improvement in the cost of electricity, broadband, and other utilities, and transport and logistics performance. South Africa, India and Tanzania also significantly improved their business infrastructure scores.
Access to credit assessments in the prosperity index evaluated how easy it was to obtain affordable credit to finance business ideas in 2018.
Developments in Malawi, including a new credit bureau and changes to their previous laws, meant great improvements for Malawian entrepreneurs in being able to access credit. All in all, the nation moved from 119th to 32nd in the global rankings for this factor in 2018.
Each nation’s entrepreneurial environment was also measured by the prosperity index. The ease of starting a business and getting ahead was studied through data produced from the perceptions of the business community.
In Djibouti, fees for professional licenses and business registration have been waived or reduced for new businesses. This results in a significant six-place rise from 144th to 138th.
This has been the case in Bangladesh, one of the highlighted success stories of the prosperity index. The developing nation is one of the decade’s economic success stories, despite its needing to overcome natural disasters including unprecedented flooding post-major cyclone in 2007.
Bangladesh has gone from strength to strength in terms of economic quality and business environment, according to its scores in these areas. Over the last decade, it has increased its GDP from $616 to $1517 and has consistently reduced poverty, which now stands at 14.8 percent. Bangladesh’s standard of living was ranked 28th globally in 2018 by the Legatum Prosperity Index, and its entrepreneurial environment at 38th.
Legatum Institute CEO, Baroness Philippa Stroud, writes in the introduction to the 2018 report:
This is the 12th consecutive year of the Legatum Prosperity Index and the very good news is that we see prosperity continuing to rise in the world, both over the last year and consistently over the last 11 years. More countries are becoming more prosperous and more people are living more prosperous lives.
An overall increase of more than ten per cent means that the world’s business environment is improving faster than any other measure used in the prosperity index. Faster improvements are being seen in business than in health, education and social freedom, for instance.