Digital entrepreneurship system: Bangladesh 96th among 113 economies

Bangladesh has ranked 96th among 113 economies in the Global Index of Digital Entrepreneurship Systems, a new index by the Asian Development Bank (ADB).

The ADB revealed the ranking in its September update report of the Asian Development Outlook 2022 released on Wednesday.

The primary focus of the index is upon 21 developing members of the ADB, but it also covers 92 economies in other regions to benchmark results and place them in five categories – leaders, followers, catchers-up, laggards, and tailenders.

Five South Asian nations, including Bangladesh, got listed in the "tailenders" category, which means the countries have weak digital environments for entrepreneurs.

The index is prepared by looking at the level of digitalisation in eight areas – culture and informal institutions; formal institutions, regulation, and taxation; market conditions; physical infrastructure; human capital; knowledge creation and dissemination; Finance; and networking and support.

Bangladesh is the fourth weakest among the 21 ADB member economies, with its very poor performance in three areas – culture and informal institutions, market conditions, and human capital. The overall score of the country is only 12.5 out of 100 in the index.

Nepal is the weakest digital entrepreneurship system among the Asia group, ranked 104th globally, followed by Cambodia (101st) and Pakistan (97th).

India has performed best in the region as it placed in 75th position globally, followed by Sri Lanka (82nd).

ADB said Singapore offers the global best environment for digital entrepreneurs while 17 of the 21 developing Asian economies placed toward the bottom.

The Manila-based lender also said, for Asia and the Pacific as a whole, an insufficiently supportive culture is among the biggest weak spots when it comes to nurturing digital entrepreneurship.

"One example is a general lack of public appreciation for the vital role that entrepreneurs play in economic progress. One way to change this is to improve the public perception of entrepreneurship through education," it added.

How Bangladesh performs in the eight pillars

With a score of 32.1, Bangladesh performed best in the physical infrastructure among the pillars, followed by the finance (20.1), networking and support (14.6) and knowledge creation and dissemination (14.5).

Meanwhile, the country performed worst on the culture and informal institutions with a score of only 2.1, followed by the market conditions (7.8), human capital (8.5), formal institutions, regulation, and taxation (10).

The Asia group scored highest on average for physical infrastructure, indicating that countries in the region generally have high-quality digital infrastructure and the basic physical infrastructure required to support digital entrepreneurship.

On the other hand, the regional average was the worst for culture and informal institutions, suggesting cultural support for digitally enabled entrepreneurship – or how people view entrepreneurs' status and career choice, how corruption in the economy affects this view, and how widely digitalization is accepted—is generally low in the region.

ADB Chief Economist Albert Park said, "Digital entrepreneurship helped economies stay afloat during the Covid-19 pandemic, and it can become a major engine of growth and innovation in the post-pandemic world."

"For this to happen, there needs to be a supportive environment enabled by conducive policies and incentives. While the environment for Asia's digital entrepreneurs made substantial strides in the past couple of years, there's still a lot of room for improvement," he added.