Entrepreneurs around the world are finding it’s easier to do business today than at any time in the last 10 years – a trend likely to result in more jobs, says the 2013 Doing Business Report jointly released by the World Bank and the International Finance Corporation (IFC) October 22, 2012.
Titled “Smarter Regulations for Small and Medium-Size Enterprises,” the Doing Business 2013 measured 185 economies on the ease of starting and operating a local business.
Simpler and streamlined business regulations, along with technological improvements such as online business registration, mean it’s easier to start a business than it was eight years ago, says Rita Ramalho, Programme Manager, Doing Business Unit at the World Bank Group.
And, “We’re seeing that friendlier business regulations – particularly simplifying them and streamlining business regulatory processes—have a positive impact on job creation,” she says.
Ramalho cites Mexico as an example and says the country’s “move to simplify business registration in the early 2000s resulted in a 5% increase in registrations and a 2.2% increase in employment.”
“Research suggests a link between simplifying the business start-up process and an increase in firm creation and job creation. We see the association that on average, the countries with more efficient business regulations as measured by Doing Business have higher growth rates,” says Ramalho.
According to the Doing Business report, developing countries’ efforts to reform business regulations in the last several years are starting to pay off. The report was first published in 2003.
“Over 10 years, smarter business regulation has been seen as supporting economic growth, and simpler business registration as promoting greater entrepreneurship and firm productivity. Lower-cost registration has improved formal employment opportunities,” it said.
The report included a case study on Rwanda, which recovered from genocide and civil war in the 1990s to be dubbed as “Africa’s new Singapore” in 2010 by UK publication, The Economist.
Rwanda is among the 30 plus economies that have created special units to focus on indicators monitored by Doing Business, such as the average time it takes to start a business, transfer property, build a warehouse, or get connected to electricity.
“Doing Business is about smart business regulations, not necessarily fewer regulations,” says Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group.
According to Lopez-Claros, the World Bank is “very encouraged that so many economies in Africa are among the 50 that have made the most improvement since 2005 as captured by the Doing Business indicators.”
Some 17 countries in Africa are among the most improved over the last eight years, according to the report.
Singapore topped the global ranking for the seventh year in a row.
Most economies measured, the report observes, have made improvements in the business climate.
It adds that since 2005, the average time to start a business has fallen from 50 days to 30–and in low -income economies the average has been reduced by half.
Poland led the top ten economies registering the biggest improvements in the ease of doing business over the last year, followed by Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.
By Ekow Quandzie