Bangladesh is ranked 96th out of 113 economies in the Global Index of Digital Entrepreneurship Systems, a new index by the Asian Development Bank (ADB).
The ADB announced the ranking in its Asian Development Outlook 2022 September update report released on Wednesday.
The Index’s main focus is on 21 developing members of the ADB, but it also covers 92 economies in other regions to compare results and classify them into five categories – Leaders, Followers, Catch-ups, Laggards and Tailenders.
Five South Asian nations, including Bangladesh, have been included in the Tailender category, meaning the countries have weak digital environments for entrepreneurs.
The index is constructed by looking at the level of digitization in eight domains – culture and informal institutions; formal institutions, regulation and taxation; market conditions; physical infrastructure; human capital; knowledge building 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 country’s overall score is only 12.5 out of 100 in the index.
Nepal is the weakest digital entrepreneurship system in the Asian group, ranking 104th globally, followed by Cambodia (101st) and Pakistan (97th).
India was the best performer in the region, ranking 75th globally, followed by Sri Lanka (82nd).
According to ADB, Singapore offers the best environment for digital entrepreneurs in the world, while 17 of the 21 developing Asian economies are at the bottom.
The Manila-based lender also said that for Asia Pacific as a whole, an insufficiently supportive culture is among the top weaknesses in fostering digital entrepreneurship.
“One example is a general lack of public appreciation for the important role entrepreneurs play in economic progress. One way to change this is to increase public awareness of entrepreneurship through education,” she added.
How Bangladesh scores on the eight pillars
With a score of 32.1, Bangladesh performed best among the pillars in physical infrastructure, followed by finance (20.1), connectivity and support (14.6), and knowledge creation and dissemination (14.5).
In contrast, the country performed worst in culture and informal institutions with a score of only 2.1, followed by market conditions (7.8), human capital (8.5), formal institutions, regulation and taxation (10).
The Asian group achieved the highest physical infrastructure score on average, indicating that countries in the region generally have high-quality digital infrastructure and the basic physical infrastructure needed to support digital entrepreneurship.
On the other hand, the regional average was worst for culture and informal institutions, indicating cultural support for digitally enabled entrepreneurship – or how people view the status and career choices of entrepreneurs, how corruption in business affects this view, and how widespread digitization is accepted – is generally low in the region.
ADB Chief Economist Albert Park said: “Digital entrepreneurship has helped economies stay afloat during the Covid-19 pandemic and it can become a major driver of growth and innovation in the post-pandemic world.”
“For this to happen there needs to be a supportive environment enabled by enabling policies and incentives. While the environment for Asia’s digital entrepreneurs has made significant strides in recent years, there is still much room for improvement,” he added.