This article covers the best practices and needs for reform in entrepreneurship

Entrepreneurship

Entrepreneurship is the act of being an entrepreneur, which can be defined as "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". This may result in new organizations or may be part of revitalizing mature organizations in response...

 policies in Saudi Arabia

Saudi Arabia

The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...

.

Entrepreneurship enjoys high level of support in Saudi Arabia, according to Jonathan Ortmans. The Kingdom has been leading in the Arab region in terms of regulatory reforms related to entrepreneurship. According to the latest report of Doing Business

Doing Business Report

The Doing Business Report is a study elaborated by the World Bank Group since 2004 every year that is aimed to measure the costs to firms of business regulations in 183 countries in 2010...

 (DB), the country ranked 13th globally and maintained its position in the first place in the region on the ease of doing business

Ease of Doing Business Index

The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights...

. Saudi Arabia’s consistent improvement in DB's six indicators propelled it to its latest ranking from 35th since 2004, using French law as a model in revising its policies. In the latest World Economic Forum

World Economic Forum

The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....

 (WEF) Global Competitive Index

Global Competitiveness Report

The Global Competitiveness Report is a yearly report published by the World Economic Forum. The first report was released in 1979. The 2011–2012 report covers 142 major and emerging economies....

 (GCI 2010-2011), it moved up by seven places from 28th to 21st place which resulted in a strong and solid institutional framework, efficient markets, and sophisticated businesses places. Real activity (real GDP) in Saudi Arabia was expected to grow at 3.4 percent in 2010 and 4.5 percent in 2011. Enactment of a new foreign investment law, establishment of the Saudi Arabian General Investment Authority

Saudi Arabian General Investment Authority

The Saudi Arabian General Investment Authority was created by the Saudi Government on April 10, 2000 as part of measures geared towards formalizing the process of economic liberalization. SAGIA is responsible for managing the investment environment in the Kingdom...

 (SAGIA) as well as privatizations of public companies in recent years have encouraged investments in the country.

However, businesses still face difficulties, enforcement of contracts and labor issues within the regulatory system in the country. Based on a Global Entrepreneurship Monitor (GEM) survey conducted from May to October 2009, among the factor-driven economies in the region, Saudi Arabia had the lowest total entrepreneurial activity (TEA) rate, only 4.7% of the adult population (18–64 years old) were actively involved in the start-up

Startup company

A startup company or startup is a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets...

 of a new business or owned a young business of less than three and half years old. A study by Michael Porter

Michael Porter

Michael Eugene Porter is the Bishop William Lawrence University Professor at Harvard Business School. He is a leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally...

 in 2008 noted that Saudi Arabia could built a competitive economy and diversify beyond natural resources if it was willing to take a strategic approach, make multiple improvements in its business environment, truly open up competition and entrepreneurship in the private sector, and embark on a sustained effort to equip Saudi citizens with new skills, attitudes and mindsets.

For-profit companies

Best practices:

• In 2006, Saudi Arabia made it easier to start a business by simplifying processes at its Ministry of Commerce and cut registration time from 64 days to 39. The Saudi Arabian General Investment Agency (SAGIA) finalized agreements with 17 government agencies to remove impediments and introduce incentives for businesses. SAGIA also launched its “10/10” project targeting the top ten by 2010. The reform continued in 2007, the time for start-up dropped from 39 days to 15 days by eliminating layers of bureaucracy. Procedures at its Ministry of Commerce were sped up, publication requirements were merged and social security registration with the Chamber of commerce was automated. The reforms cut 6 procedures for forming a new company from 13 to 7 and the cost from 59% of income per capita to 32%. The commercial registration fees with its Ministry of Commerce were reduced by 80%, reducing the time to start a business by two days. It eliminated the requirement to publish the summary Articles of Association
  Articles of Association
  The Continental Association, often known simply as the "Association", was a system created by the First Continental Congress in 1774 for implementing a trade boycott with Great Britain...
  
   in the local newspaper. Instead, they need to be published only in the official gazette, at a cost of just 1,500–3,000 riyals. Saudi Arabia continued to simplify regulation formalities, in 2009 one-stop system
  One stop shop
  One Stop may refer to:* One Stop, the smallest store format of TescoOne Stop Shop is a term used by many local authorities in the United Kingdom to describe the facility they offer for their residents to discuss and arrange services with officers of the authority...
  
   was created at the Ministry of Commerce for business registration and permits. It combined all registration procedures for local limited liability companies.
• In June 2007, Saudi Arabia made the most dramatic reform in the ease of doing business by scrapping the high minimum paid in capital
  Paid in capital
  Paid in capital refers to capital contributed to a corporation by investors through purchase of stock from the corporation . It includes share capital Paid in capital (Paid-in capital or Contributed capital) refers to capital contributed to a corporation by investors through purchase of stock...
  
   that used to be $124,464 and the fifth largest minimum capital requirement in the world, equivalent to 1057% income per capita
  Per capita income
  Per capita income or income per person is a measure of mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate and dividing it by the total population...
  
  . Since its reform, the total number of annual business registered increased by 81%.
• Saudi Arabia expedited the process of dealing with construction permit
  Construction permit
  A construction permit or building permit is a permit required in most jurisdictions for new construction, or adding on to pre-existing structures, and in some cases for major renovations. Generally, the new construction must be inspected during construction and after completion to ensure compliance...
  
  s by adopting the one-day permit procedure by allowing builders to obtain temporary building permit to begin the construction after one day and a final building permit after just one week. Now entrepreneurs can complete registration in 1 procedure and 1 day at the new one-stop shop in Riyadh. The one-stop shop includes representatives from several government departments, the chamber of commerce, a private bank and the notary public. Again in 2010, Saudi Arabia made dealing with construction permits easier by introducing a new, streamlined process, reducing the procedures by five and time by five days, ranked the country to 14th place from 30th.
• Until 2005, a Saudi entrepreneur pays nothing for registering a property, it only required to be notarized and not linked to a cadastre, which could lead to less security. It was not until late 2005 when the Real Property Registration Law came into effect, this was the country’s first property registry. Saudi Arabia computerized procedures in 2007, making it possible to register property in 2 procedures and 2 days. Under this new law, upon verification of the documents by the notary public, in the presence of the legal representative from the seller and the buyer, will submit the documents electronically to the Records Department to get the new title deed showing the new owner of the property. This will be added electronically in the centralized records in Riyadh
  Riyadh
  Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to 5,254,560 people, and the urban center of a...
  
  . The sale agreement shall be scanned and save while the original is kept in the notary public’s record.
• The country improved procedures at ports by abolishing the requirement for a consular certificate and allowing submission of information required for customs clearance electronically. This reduced trading time by 2 days. In Jeddah’s
  Jeddah
  Jeddah, Jiddah, Jidda, or Jedda is a city located on the coast of the Red Sea and is the major urban center of western Saudi Arabia. It is the largest city in Makkah Province, the largest sea port on the Red Sea, and the second largest city in Saudi Arabia after the capital city, Riyadh. The...
  
   port, more containers are cleared in one day. In 2009, Saudi Arabia cut fees by 50%. In 2010, Saudi Arabia launched a new container terminal at the Jeddah Islamic Port reducing the time to import to 17 days.
• In 2008, Ministry of Trade and Industry amended provisions of its company law that addresses approval and disclosure requirements for related party transactions. In the new law, the interested directors may no longer vote at a shareholders meeting to approve related-party transactions. It increased the legal remedies available in cases dealing with the liability of directors for misconduct. Directors found liable for damage to a company due to a related party transaction will have to repay all profits made from it.

Needed reforms:

• Electronic registration of records: online name verification and other online services are common in Organisation for Economic Co-operation and Development
  Organisation for Economic Co-operation and Development
  The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
  
   (OECD) countries, Eastern Europe
  Eastern Europe
  Eastern Europe is the eastern part of Europe. The term has widely disparate geopolitical, geographical, cultural and socioeconomic readings, which makes it highly context-dependent and even volatile, and there are "almost as many definitions of Eastern Europe as there are scholars of the region"...
  
  , Latin America
  Latin America
  Latin America is a region of the Americas where Romance languages  – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
  
   and others, around 40 economies offer electronic registration services. This improves data safety, transparency and sharing of information.

Foreign Ownership

Best practices:

• Restrictions on foreign ownership are present in Saudi Arabia where local citizens are required to hold majority ownership in banking and insurance

Needed reforms:

Finances

Best practices;

• Saudi Arabia ranked well worldwide in the ease of getting credit in Doing Business report 2011, its rank moved up from 69th to 46th place. In 2004 Saudi Arabia’s public registry cut the minimum loan size for collecting data substantially from 5 million riyals to 500,000, almost doubling the number of borrowers recorded. The bureau was set up with the support from the Central Bank. In 2007, Saudi Arabia launched its private credit bureau
  Credit bureau
  A credit bureau , or credit reference agency is a company that collects information from various sources and provides consumer credit information on individual consumers for a variety of uses. It is an organization providing information on individuals' borrowing and bill paying habits...
  
  . The bureau issues reports on companies’ credit exposure and includes their financial statements and ownership details both positive and negative information. By 2008, utility company like mobile telephone companies and retailers started providing information to the bureau. The credit bureau allowed borrowers to inspect and dispute their information The latest reform in 2010 was a big improvement, an amendment to Saudi Arabia’s commercial lien law enhanced access to credit by making secured lending more flexible and allowing out-of-court enforcement in case of default. Saudi is planning to implement an electronic collateral registry in the future

Needed reforms:

Contracts/Commercial Law

Best Practices:

• Saudi Arabia ranked 140th out of 183 economies in enforcing contracts. The enforcement of contracts is not always swiftly implemented; the procedural phases of filing, trial, judgment, and enforcement typically take an average of 635 days with 43 procedures. Due to the underdeveloped contract enforcement because of bureaucratic delays caused by conflicts between commercial laws and Islamic rules, this put the country as one of the unattractive place for dispute resolution among emerging markets.

Needed reforms:

Bankruptcy

Best Practices:

• The Ministry of Commerce introduced strict deadlines for bankruptcy
  Bankruptcy
  Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
  
   procedures in 2008. Auctions of debtors’ assets are expected to take place quicker than before. As a result, the process to determine the fate of a company in financial jeopardy (i.e., sale as going concern, piecemeal sale of assets, or approval of a reorganization plan) can range from 12 to 18 months. Once a judgment has been made and the fate of the company is determined, recovery of payment is fairly expeditious—creditors can expect to recover some monies owed within 1 month of judgment.
• In 2009, Saudi Arabia established additional committees for amicable settlement of insolvencies put time limits on the settlements to encourage creditors to participate. Saudi Arabia are also developing automated case management systems. It will allow electronic filing and automatic assignment of court dates as well as keep a log of all proceedings.

Needed reforms:

Taxes

Best Practices:

• Saudi Arabia ranked 7th worldwide in the latest report in the ease of paying taxes. As the government relies mostly on oil revenue to fund spending, businesses in the region pay some of the lowest tax rates in the world.

Education

As much as the recent improvements are commendable, the country faces important challenges going forward. Education in Saudi Arabia

Education in Saudi Arabia

When Saudi Arabia formally became a nation in 1932, education was largely limited to instruction for a select few in Islamic schools. Today, public education—from primary education through high school—is open and free to every citizen.-Education management system:...

 does not meet the standards of countries at similar income levels. While some progress is visible in the assessment of the quality of education, improvements are taking place from a low level. As a result, the country continues to occupy low ranks in the health and primary education

Primary education

A primary school is an institution in which children receive the first stage of compulsory education known as primary or elementary education. Primary school is the preferred term in the United Kingdom and many Commonwealth Nations, and in most publications of the United Nations Educational,...

 (74th) and higher education

Higher education

Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...

 and training (51st). The youth consists of more than 70% of the country’s population and many of young Saudis are looking to entrepreneurship as a career path. According to the latest survey conducted by Gallup

Gallup

Gallup can refer to:*Gallup, New Mexico*Gallup, South Dakota *George Gallup, American pollster*Elizabeth Wells Gallup, American educator and scholar...

 between July to October 2009, among the high-income group in the region, 78% of the Saudi youth believed that their local communities are good places for such entrepreneurs and 30% of young Saudis who are not already business owners say they are planning to start their own business in the next 12 months. Youth in Saudi Arabia are three times as likely to say they are planning to launch a business if they perceive the government makes paperwork and permits easy enough for aspiring entrepreneurs. If out of work for more than six months, 51% of youth indicate they would be willing to take a job beneath their skills or train in a new field or start their own business. Among youth who express entrepreneurship aspirations, 61% are employed. Saudi youth reported dissatisfaction with efforts to increase the number of quality jobs within the Kingdom. However, 93% of young Saudis say taking part in regular job training increases their chances of getting a job.
A handful of business professionals turned educators have helped contribute to the education and increased awareness of the merits of entrepreneurship in Saudi Arabia. One notable professional is Mr. Talal Althefery, an Arab-American serial entrepreneur with extensive experience in small to medium sized enterprises (SMEs) and business development. Mr. Althefery assumed the role of Program Director for two distinguished programs at King Saud University

King Saud University

King Saud University is a public university located in Riyadh, Saudi Arabia. It was founded in 1957 by King Saud bin Abdul Aziz as Riyadh University, as the first university in the kingdom not dedicated to religious subjects. The university was created to meet the shortage of skilled workers in...

, which enabled him to translate his experience from the States to the Saudi market.
Best Practices:

• Saudi Arabia has implemented reform in higher education by establishing the King Abdullah University of Science and Technology
  King Abdullah University of Science and Technology
  King Abdullah University of Science and Technology is a public research university located in Thuwal, Saudi Arabia.KAUST was founded in 2009 and focuses exclusively on graduate education and research, using English as the official language of instruction...
  
   (KAUST) in 2009, the world’s newest state-of-the-art graduate level research and entrepreneurial university. KAUST’s Industry Collaboration Program (KICP), Technology Transfer Office, and Research Park underscore the university’s mission to convert research discoveries into practical applications, to incubate new businesses, and to maximize industrial collaboration within Saudi Arabia as well as regionally, and globally
• In 2009, the Prince Mohammed bin Fahd Leaders Preparation Center was established to prepare young Saudi girls to lead the future. Operating under the umbrella of the Prince Sultan bin Abdul Aziz Fund,it opened to Saudi girls between the ages of six and 25. Two programs at the center target different age groups: the Promising Leaders Program is designed for girls ages six to 15, and the Young Leaders Program caters to girls ages 16 to 25.

Labor market

Based on the case study conducted by World Bank on 2007, the oil sector in Saudi Arabia made up more than half the gross domestic product (GDP) but employed only 2% of the workforce and even if the oil maintained its high price, it would not generate the new jobs to satisfy the growing number of young Saudis who will enter the labor market over the next years. The latest report from WEF ranked the country 60th in the efficiency of labor market out of 183 economies. The need to transform the Saudi economy was clear—from one based on inherited wealth to one based on innovation creating an ecosystem for entrepreneurship.

Ranking for the Arab Countries

Economies	Ease of Doing Business Ease of Doing Business Index The Ease of Doing Business Index is an index created by the World Bank. Higher rankings indicate better, usually simpler, regulations for businesses and stronger protections of property rights...  2009/10	Global Competitiveness Index Global Competitiveness Report The Global Competitiveness Report is a yearly report published by the World Economic Forum. The first report was released in 1979. The 2011–2012 report covers 142 major and emerging economies....  2010/11 (GCI)	Economic Freedom Score 2010	Prosperity Index Legatum Prosperity Index The Legatum Prosperity Index is an annual ranking developed by the Legatum Institute of 110 countries. The ranking is based according to a variety of factors including wealth, economic growth, personal wellbeing, and quality of life. Norway topped the lists of the the last two reports, those of...  2010	Information and Communication Technology Index (ICT) 2009	Innovation System Index 2009	Human Development Index Human Development Index The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...  (HDI) Value 2010	Education and Human Resources Index 2009	Knowledge Economy Index Knowledge Economic Index The Knowledge Indexes were designed as an interactive tool for benchmarking a country's position vis-a-vis others in the global knowledge economy. It was created by the World Bank Institute using the Knowledge Assessment Methodology -Knowledge Index:...  (KEI) 2009	Press Freedom Index Press Freedom Index The Press Freedom Index is an annual ranking of countries compiled and published by Reporters Without Borders based upon the organization's assessment of their press freedom records. Small countries, such as Andorra, are excluded from this report...  2010
Algeria Algeria Algeria , officially the People's Democratic Republic of Algeria , also formally referred to as the Democratic and Popular Republic of Algeria, is a country in the Maghreb region of Northwest Africa with Algiers as its capital.In terms of land area, it is the largest country in Africa and the Arab...	136	86	56.9	79	3.46	3.59	0.677	3.66	3.22	133
Bahrain Bahrain ' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...	28	37	76.3	n/a	7.3	4.29	0.801	5.82	6.04	144
Djibouti Djibouti Djibouti , officially the Republic of Djibouti , is a country in the Horn of Africa. It is bordered by Eritrea in the north, Ethiopia in the west and south, and Somalia in the southeast. The remainder of the border is formed by the Red Sea and the Gulf of Aden at the east...	158	n/a	51.0	n/a	1.32	1.68	0.402	0.88	1.47	110
Egypt Egypt Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...	94	81	59.0	89	3.92	4.44	0.620	4.35	4.08	127
Iran Iran Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...	129	69	43.4	92	5.65	4.56	0.702	3.80	3.75	175
Iraq Iraq Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....	166	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	130
Jordan Jordan Jordan , officially the Hashemite Kingdom of Jordan , Al-Mamlaka al-Urduniyya al-Hashemiyya) is a kingdom on the East Bank of the River Jordan. The country borders Saudi Arabia to the east and south-east, Iraq to the north-east, Syria to the north and the West Bank and Israel to the west, sharing...	111	65	66.1	74	4.95	5.59	0.681	5.62	5.54	120
Kuwait Kuwait The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...	74	35	67.7	31	6.96	4.98	0.771	4.93	5.85	87
Lebanon Lebanon Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...	113	92	59.5	84	5.35	4.53	n/a	4.92	4.81	78
Morocco Morocco Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...	114	75	59.2	62	4.37	3.72	0.567	1.95	3.54	135
Oman Oman Oman , officially called the Sultanate of Oman , is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. The coast is formed by the Arabian Sea on the...	57	34	67.7	n/a	4.90	4.94	n/a	4.47	5.36	124
Qatar Qatar Qatar , also known as the State of Qatar or locally Dawlat Qaṭar, is a sovereign Arab state, located in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the much larger Arabian Peninsula. Its sole land border is with Saudi Arabia to the south, with the rest of its...	50	17	69.0	n/a	8.06	6.45	0.803	5.37	6.73	121
Saudi Arabia Saudi Arabia The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...	11	21	64.1	49	6.43	3.97	0.752	4.89	5.31	157
Syrian Arab Republic	144	97	49.4	83	4.43	3.17	0.589	3.10	3.09	173
Tunisia Tunisia Tunisia , officially the Tunisian RepublicThe long name of Tunisia in other languages used in the country is: , is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area...	55	32	58.9	48	4.88	4.65	0.683	4.08	4.42	164
United Arab Emirates United Arab Emirates The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...	40	25	67.3	30	8.59	6.69	0.815	4.90	6.73	n/a
West Bank and Gaza	135	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Yemen Yemen The Republic of Yemen , commonly known as Yemen , is a country located in the Middle East, occupying the southwestern to southern end of the Arabian Peninsula. It is bordered by Saudi Arabia to the north, the Red Sea to the west, and Oman to the east....	105	n/a	54.4	105	1.67	2.67	0.439	1.79	2.20	170

Notes:

• n/a - not ranked
• Ease of Doing Business - ranked among 189 Economies
• GCI Index - ranked among 139 Economies
• Economic Freedom Score - 0 to 100, where 100 represents the maximum freedom
• Prosperity Index -The Prosperity Index assessed 110 countries, accounting for over 90 percent of the world’s population, and is based on 89 different variables, each of which has a demonstrated effect on economic growth or on personal wellbeing. The Index consists of eight sub-indexes, i.e. Economy, Entrepreneurship & Opportunity (E&O), Governance, Education, Health, Safety & Security, Personal Freedom and Social Capital.
• The ICT value falls on a scale of 0-10 and is calculated from three key indicators: number of telephone lines per thousand of the population, number of computers per thousand of the population, and number of internet users per thousand of the population. The top 10 per cent of states score in the range 9-10, the next highest 10 per cent of states score in the range 8-9 and so on.
• Innovation System Index - The index value falls on a scale of 0-10 and is calculated from three key indicators: Total royalty payments and receipts in US$ per person, number of patent applications granted by the US Patent and Trademark Office per million people, and the number of scientific and technical journal articles published per million people. The top 10 percent of states score in the range 9-10, the next highest 10 per cent of states score in the range 8-9 and so on.
• HDI - Calculated based on data from UNDESA (2009d), Barro and Lee (2010), UNESCO Institute for Statistics (2010a), World Bank (2010g) and IMF (2010a).
• Education and Human Resources Score - The index value falls on a scale of 0-10 and is calculated from three key indicators: adult literacy rate, secondary enrolment, and tertiary enrolment. The top 10 per cent of states score in the range 9-10, the next highest 10 per cent of states score in the range 8-9 and so on.
• Press Freedom Index- The lower the value of a state’s press freedom index, the better the situation for press freedom, ranked among 178 countries.