While your demographic location has easy access to getting credit, considerably steady electricity supply, less hassle in dealing with construction permits, easy trading across border, likelihood to resolving insolvency faster, regular taxes payment, and the rest four ranking metrics used by World Bank, yours, as a country, can as well rank quite high when it comes to Ease of Doing Business.
A quite high ease of doing business ranking indicates that an economy is quite conducive to the starting and operation of a local firm. The rankings are determined by sorting and weighing the aggregate scores on 10 topics some of which are listed earlier, profiling almost 200 countries on the planet accordingly, year in, year out.
Citing a certain report of the U.S. Bureau of Labor Statistics which claims that roughly 20% of small businesses fail within their first year of establishments, and then about 50% are already out of existence by 5th years of creation, this report stemming out of US might be too good to even be true for less thriving economies/continents where those metrics for ranking are sort of poor and largely unencouraging.
Why do businesses fail? Aside from internal problems, businesses and establishments not being some isolated entities from the prevailing situations of a country get affected also by policies, political sway, and name-it situational happenings obtainable in a geographical location, called a nation.
So it is fair to admit that all things being equal, by statistics, a business founded in France (Europe) has about double the chance of surviving the first year of establishment compared to Democratic Republic of Congo (Africa) because those 10 determining metrics are more positive in the former than the latter. Reasons are so obvious to tell, at least for the now.
With an interest to probe ranking of countries according to how supporting when it comes to starting and running a business from 2016 till present, here is a link of a report to an interactive report showing how countries and continents compare, I put together in that regard.
- The land of the Kiwis, New Zealand, has remained the most business friendly over the past 5 years, while Somalia has remained the least in supporting business. Oh Somalia?!
- Europe ranked the highest among the continents on average with most business friendly conditions and Africa the very least. It might not be too hard to tell while Africa is the least, no thanks to warmongering, inter-tribal conflicts, consistent power outage, stunted credit facility, and so on.
- While Bill Gates quipped years back that we tend to overestimate what we can do in one year, but underestimate what we can achieve in a decade (paraphrased), according to this 5 years report (half a decade), nothing humongously substantial has changed: the best has remained the best, while the worst has continued to almost maintain the status quo in their business-support system.
- An exception to observation 3 above pertaining to Africa is Kenya: Something is happening in Kenya which has seen it vacate position number 10
5 years ago to being ranked 4th in 2020; whereas Ghana ranked 11th half a decade ago, is now 17th on the chart.
In the meantime, Nigeria, the most populous black nation, ranked in another recent report by Bloomberg as largest economy in Africa has not made a major leap but rather dancing in the region of twenties (Year 2020 the best so far, ranked as 21st)
- Singapore (in Asia) is giving New Zealand (in Oceania) a run for her money. The elevating consistency Singapore has been exhibiting is undeniable and
will likely topple New Zealand in a matter of a year or two, going by projection of data, as the world capital country for ease of running business.
The purpose of analysis among others is to lay bare the state of things in the now, how things were, and how things could be using predictive analytics if necessary. For instance, countries with rather poor rating in getting credit, getting electricity, paying taxes, protecting minority investors, are by default going to be very low-ranked while the reverse will be for highly ranked countries which hold promises for starting and smooth-running of businesses.
I will conclude by saying that data analytics is good, if it drives some action. Will countries with consistently low ranks be concerned with their positions which discourage foreign direct investment? The answer is in 5, 10 years from now.
Report (Dashboard) Link here.