Super entrepreneurs

Analysing the Forbes Magazine’s list of the world’s richest people (1996 to 2010), the London-based Centre for Policy Studies identified nearly 1,000 super entrepreneurs (people who earned, not inherited or were given their wealth, and their worth had to be at least $1 billion) from 53 countries.

The top five countries with the most super entrepreneurs per capita were: Hong Kong, Israel, the US, Switzerland and Singapore.

Most interestingly, the centre’s report also identified the main characteristics of the economies that create more super entrepreneurs. Providing these characteristics may give some input towards a more successful reform of the business environment.

Nations that espouse and produce super entrepreneurs have high standards of education; their universities endow graduates with elite university degrees and superior skills. Hence, to have super entrepreneurs, there is need to improve the education system, especially higher education.

Such countries should also have robust and stable legal structures. 

The report showed that countries with a well-established legal tradition produce more super entrepreneurs.  This should not surprise anyone because almost all research emphasises the importance of a modern, stable and transparent legislative environment.

The third characteristic is low taxation; governments can boost the birth and growth of enterprises by lowering the tax burden.

High capital gains tax is especially harmful to the development of super entrepreneurs. Jordan needs to ponder this fact before passing new taxation. It should also look into it when considering a new investment promotion law. 

The fourth most important element or underpinning for creating super entrepreneurs is the ease of doing business, which can be easily discerned from the IFC’s Doing Business Report. 

A country that constantly improves its rank in this report signals to the world its intent to cultivate and enlarge its entrepreneurial stock and the number of super entrepreneurs per capita.  The four traits are easy to implement if one were to watch out for them. 

They are not for those who are in a rush and keep getting ahead of themselves; improving the position of a country in any of the four categories has to take time.

In fact, a country would be lucky to do it in 20 years. Typically, countries take something like 30 years to move up in a notable manner to become hubs for super entrepreneurs.

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