Measuring Entrepreneuship in India

SBA ,USA released a new study  that analyzes entrepreneurship at the global level using a new index called the Global Entrepreneurship and Development Index (GEDI). This index captures the contextual (qualitative and quantitative) features of entrepreneurship in 71 countries.

Porter identifies a factor-driven stage, an efficiency-driven stage, and an innovation-driven stage, and he adds two transitions.The factor-driven stage is marked by high rates of agricultural self-employment. Countries in this stage compete through low-cost efficiencies in the production of commodities or low value-added products. Sole proprietorship—i.e., the self-employed—probably account for most small manufacturing firms and service firms.To compete in the efficiency-driven stage, countries must have efficient productive practices in large markets, which allow companies to exploit economies of scale. Industries in this stage are manufacturers that provide basic services. The efficiency-driven stage is marked by decreasing rates of self-employment. When capital and labor are substitutes, an increase in the capital stock increases returns from working and lowers returns from managing.The innovation-driven stage is marked by an increase in knowledge-intensive activities . In the innovation-driven stage knowledge provides the key input. In this stage the focus shifts from firms to agents in possession of new knowledge. The agent decides to start a new firm based on expected net returns from a new product. The innovation-driven stage is biased towards high value added industries in which entrepreneurial activity is important.

India scores poorly at 0.23 ,gets 53rd rank with China marginally better at rank of 40. China and India are efficiency-driven countries and are not yet fully in the innovation race.United States has a huge lead in NEW TECHNOLOGY, India is catching up fast;  the difference between the United States and China on the TECH SECTOR variable is not very large. What is interesting is that entrepreneurs in neither India nor China seems to be afraid of failure. 

However, strange are scores for start-up skills (0.08) and networking (0.03)-  are we so bad? 
Read : http://www.sba.gov/advo/research/rs370tot.pdf