Bangladesh ranked 84th out of 100 economies on the Entrepreneurship Index 2021 released by the New York-based CEOworld magazine on Sunday.
It was ahead of Pakistan, which ranked 99th, but lagged far behind India (9th). Sri Lanka ranked 80th on the index.
Shams Arefin, a research associate and deputy secretary of research and development at Dhaka Chamber of Commerce and Industry, told The Business Standard the biggest problem for Bangladeshi entrepreneurs is access to finance.
In most cases, they rely on their relatives or their own savings to start a business, he said.
"The concept of venture capital or equity investment for entrepreneurs has not developed here yet. On the other hand, the cost of doing business has increased," said Shams.
Explaining further, he said, "For example, registration fees have increased. Taxation structure is not friendly enough for new entrepreneurs as they have to pay tax returns even if they do not make profits."
"The governments in other countries procure from small and medium enterprises (SMEs) on a compulsory basis. The Bangladeshi authorities are also considering doing so."
Shams also pointed out that industry-oriented skills are not taught in our education system.
"To be an entrepreneur, new ideas are needed. Also, to make new products, new ideas are needed. And finally, launching a new product needs industry gap analysis and industry-oriented skills."
The United States topped the index and was recognised as the world's most entrepreneurial country, followed by Germany and the United Kingdom.
Bangladesh usually ranks poorly on global business and entrepreneurship league tables. In the World Bank Group's Doing Business 2020 study released in October 2019, its ranking rose to 168th from 176th in the previous year.
The study said Bangladesh would need to accelerate its business reform pace to further improve its regional and global competitiveness.
The CEOworld magazine's entrepreneurship index evaluated 100 economies – that collectively account for 95% of global gross domestic product – across six key indicators: innovation, competitiveness, labour skills, infrastructure, access to capital, and openness for business.
Bangladesh's overall score was only 12.99 out of 100.
The index was based on a detailed global survey of 120,000 participants – conducted between 19 October and 24 December last year – by the CEOworld magazine in partnership with the Global Business Policy Institute (GBPI).
In January last year, the Global Entrepreneurship and Development Institute released the Global Entrepreneurship Index 2019, and Bangladesh ranked 132nd among 137 countries on it.
Also, in November that year, Bangladesh ranked at the bottom among 58 economies on the Mastercard Index of Women Entrepreneurs for 2020, meaning the country was the toughest place for female business owners.
To make the entrepreneurship index, the CEOworld magazine put together a panel of experts to go over data points culled from various sources, such as the Economist Intelligence Unit, the World Economic Forum, the Organisation for Economic Cooperation and Development, and the World Bank.
It noted that the rankings should not be viewed as the most important aspect when choosing a place to build a business, and that the rankings are the result of a rigorous analytical exercise.