On Thursday 19th of January the World Bank Doing Business Report 2017 was launched in Sweden at a seminar hosted by the Swedish Entrepreneurship Forum and the Royal Swedish Academy of Engineering Sciences. Keynote speaker was Augusto Lopez-Claros, the Director of the Global Indicators Group at the World Bank and in charge of the Doing Business Report. Watch the web broadcast here.
Doing Business is a global ranking of business regulations and their enforcement across 190 countries. The index covers 11 different indicators on the conditions for starting and running a business. Focus lies on the formal sector, rules and laws together with other factors affecting small and medium sized companies’ everyday reality. This year’s report shows an improvement in 137 countries and 248 reforms to better the business climate has been made globally. The measuring is relative which means that a country could drop in the overall ranking despite substantial reforms. To complement this view, a measure called distance to the frontier, is included.
– By using the distance to the frontier you can compare your country to the top performing countries, thus even if the country drops in the general ranking it can still have made improvements towards best practice, said Lopez-Claros.
Augusto Lopez-Claros pointed to the innovations of this year’s report in Doing Business: This year’s report include several dimensions of inequality and, for the first time, a gender perspective is applied on a few indicators. As a matter of fact, 43 countries have laws discriminating women and hampering their business opportunities. To correct for this gender bias, countries lose points in the ranking. This year, the report also includes a more extensive review of taxation and an embryo of a twelfth indicator addressing procurement.
Finally Lopez-Claros mentioned Europe and Central Asia, the region that by far has made the largest improvements. Lopez-Claros explains this by a reform momentum spurred by the European Union. To gain EU-membership, countries have made substantial economic reforms focusing on business and economic stability. In addition, even after entrance to the EU the reforms have continued by the new countries now faced with competition from already existing EU countries.
– Despite the crisis the EU continues to be a very effective motor for economic reforms.
The moderator Björn O Nilsson, CEO IVA, followed up Lopez-Claros’ presentation with a question about how the index is financed.
– First and foremost it is paid by the World Bank itself, but we wouldn’t be able to do it without our extensive network of 12 000 volunteers around the world who helps us with data collection and insights about country specific conditions, Lopez-Claros said.
In the following panel discussion Johan Eklund, Managing Director of the Swedish Entrepreneurship Forum, pointed out how useful this index is. He also highlighted that we have to consider the risk of comparing Sweden with countries with such diverse development levels. In total ranking Sweden does well (ninth place) but we should only compare ourselves to countries at the top.
– Sweden must compare itself only to top performers, and, in that light, we are quite mediocre.
Leif Johansson, Chairman of AstraZeneca, Ericsson and President of IVA, underlined how Doing Business shows that the EU-project, despite crises, have been enormously successful to strengthen the business environment and the overall economy.
– The EU deserves credit for this, we have come far since the Second World War.
Indexes like Doing Business are instrumental in our work, Lena Sellgren, Chief Economist of Business Sweden, said. For example, we use them to map competition, prioritize markets and as a guide for Business Sweden’s offices around the world.
– International rankings also strengthen Swedish self confidence on markets abroad.
Also, Leif Johansson pointed to the practical use, indexes can be used to determine where investments should be placed. Furthermore he highlighted how economic growth and reform actually improves for everybody.
– Economic reform is not a zero-sum game, improved business environment and increased competition strengthens the whole world economy.
The Chairman of the Swedish Parliament’s Committee on Industry and Trade, Jennie Nilsson (Social Democratic Party), agreed on the importance of indexes like Doing Business. She stressed how Sweden continually improve weak areas such as access to finance and regulatory burdens.
– We prioritize reforms that improve the business climate, but are we doing it well and fast enough? It’s a race to the top.
Augusto Lopez-Claros concluded by mentioning that the index unfortunately at the moment doesn’t include a labor market indicator, something they hope to reintroduce.
– If the labor market indicator returns, it’s very likely that Sweden will fall in the ranking.