Editor’s note: This is part 1 of a two-part series on the insights from the 8th edition of the World Bank’s Entrepreneurship Database. Read part 2.
Entrepreneurship continues to shape economies by introducing new ideas, driving productivity and creating jobs. Entrepreneurship is a core lever in the WBG’s jobs agenda because new and growing firms are the main engines that translate investment and market opportunities into net new jobs and better-quality employment. These engines are driven by “creative destruction” – a concept pioneered by Joseph Schumpeter and re-introduced into the economics mainstream by 2025 Nobel Prize winners Philippe Aghion and Peter Howitt – whereby new firms outcompete and displace established ones while new industries render old ones redundant. Yet, the pace and scale of new business creation and exit differ markedly across countries and over time. Understanding where entrepreneurship is thriving and where it is lagging offers valuable insights into broader economic dynamism and resilience.
The World Bank Group’s Entrepreneurship Database provides a global lens on these trends. Built from administrative data collected directly from business registries and national statistical offices, the database tracks formal entrepreneurial activity across 188 economies from 2006 to 2024. Since its release, it has offered the only consistent, comparable measure of new business creation worldwide.
Focusing on the formal sector, the database measures new business entry density – the number of newly registered limited liability companies (LLCs) per 1,000 working-age adults each year – as well as closed business density, defined as the number of deregistered LLCs per 1,000 working-age adults per calendar year.
Here are the main insights from the 8th edition of the World Bank Group’s Entrepreneurship Database.
Entrepreneurial activity has been on the rise globally over the past two decades, as evidenced by a 50% increase in the number of newly registered limited LLCs per 1,000 working-age adults – from 2.9 in 2006 to 4.3 in 2024 (Figure 1). The Entrepreneurship Database shows how entrepreneurial activity reacts amidst economic downturns. During the 2008 financial crisis, there was an initial decline in business creation followed by an increase in business closures in the following years. With the Covid-19 pandemic, there was a pause in business creation in 2020 but business entry at the global level increased in subsequent years. Business closures on the other hand saw a modest dip in 2022 thanks to temporary government support programs but have trended upwards since then. A closer look shows that income level plays a central role in shaping entrepreneurial dynamics.
During the Covid-19 pandemic, high-income economies experienced a small decline in business entry, with new business density falling from 6.1 in 2019 to 5.8 in 2020, followed by a strong recovery, reaching about 7.2 new LLCs per 1,000 working-age adults in 2021. Upper-middle-income economies display a similar pattern, declining from 3.4 in 2019 to 3.1 in 2020 before rebounding to 4.2 in 2021. Lower-middle-income economies show steadier but more modest growth, with business creation increasing from 0.5 in 2006 to 1.7 in 2024, despite temporary slowdowns during crises. In contrast, low-income countries exhibit limited volatility but remain largely stagnant at low levels of formal entrepreneurship.
As shown in Figure 2, stark differences in entrepreneurial activity persist across income groups in 2024. High-income economies record new business density rates roughly ten times higher than those of low-income countries, underscoring enduring structural gaps in formal business creation. The absolute gap remains wide, highlighting the persistent challenges low-income countries face in scaling entrepreneurial activity.
Entrepreneurship levels are influenced by a wide range of factors, one of which is the quality of business regulations. Reforming the business environment to facilitate the process of starting a business is a policy tool that promotes new business creation globally. As shown in Figure 3, economies with greater score on Business Entry – measured by the Business Ready 2025 report - had higher levels of new business creation in 2024. Ultimately, fostering entrepreneurship requires complementary policies that affect an individual’s choice in starting a business such as improving access to finance, training in personal initiative and soft skills, as well as access to markets and inputs.
Explore data for all 188 economies in the Entrepreneurship Database.
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