Economies in both developed and (to Geoff Mulgan The Process of Social Innovation Geoff Mulgan is director of the Young Foundation based in London (U k). He previ
economies is likely to come in health education, whose shares of GDP are already much greater than are cars, telecommunications, or steel.
because the economics of web-based pilots may make it as inexpensive to launch on a national or continental scale.
Marginal costs close to zero accelerate the growth phase†but also the phase of decline and disappearance Our recent work on scaling up has shown why it is so hard for social innova
trustees, funders and stakeholders do not impose necessary changes. By compari -son, in business the early phases of fast-growing enterprises often involve ruthless
As well as the study of innovation in economics and science, there is a small emerging body of research into the capacity of formally constituted social organi
Jorgensen at Harvard on valuing the informal economy and family work, and the recent work led by Tony Atkinson at Oxford university on the value of public serv
-stood just how important science was to the economy (and to warfare), invention and innovation were taken out of the attics and garden sheds.
#>7. For details about the open-source business model, see the Economist, â€oeopen, but not As usual, â€
<http://www. economist. com/business/displaystory. cfm? story id=5624944>(accessed May 24 2006 8. For example, see de E. Bono, Lateral Thinking†Creativity Step by step,(London, U k.:
†and will likely change dynamics in the economy and in our personal lives 9
Northeastern University in Boston, KCR, Economist, Deloitte research â€oeyoung people increasingly view cars as appliances not aspirations, and say that
toward commodity products Eroding margins Undercut business models depending on premium autos and large margin options Reduced entry
applications to the economy of a few regions, but also the future perspectives. We would also like to give an idea of
Knowledge Economy. The original digital business ecosystem vision (Nachira, 2002) is revisited therefore here on the strength of the outputs of four years of research by traversing most of the topics shown in this ï gure.
software industry and socioeconomic stakeholders, we hope this simpliï ed map will help the readers keep their
economy Scientiï c research outputs Open knowledge Open governance Natural and formal languages Economic outputs
Economy Motivation Assumptions Theories and Principles Strategies Instruments Processes Structures Development Researchsme engagementaction research Multi-stakeholder
processes ICTS Socioeconomic Dimensions Biological Metaphors Fig. 1 Research and development in Digital Ecosystems •••8
to economic growth and economic eï ciency: â€oethe decline in EU labour productivity growth rates in the mid-ï oe990s
COM, 2004) for â€oe†the most competitive and dynamic knowledge-based economy in the world, capable of sustainable
economic growth with more and better jobs and greater social inclusion†by 20ï oe0, was interpreted as a need to boost
where a multi-stakeholder process of policy development and implementation was likely to be more eï €ective.
of stakeholders from academia, industry, business, and policy-making. However, it has rendered also a clear explanation of what the three terms mean
the stakeholders that populate it has developed during the course of the research over the last few years.
existing trend from a material economy based on manufacturing toward a service economy based on knowledge production and distributed value chains
economies of the world a more constructive dynamic of interaction between the local and the global scales can be
economy of the region when when the dominant economic actor experiences economic diï culties. This model also
It looks at new institutional and transaction costs economics (Coase, ï oe937; Williamson, ï oe975
Benkler, 2002) as well as at the economics of sharing (Benkler, 2004) and community currencies. ï oeï oe Perhaps most
A greater opennessï oe2 and a multi-stakeholder approach between academia, business, and local government implies a greater emphasis on a collaborative â€oesense-making†process for analysing the priorities of a particular
Knowledge Economy is not so diï €erent from encouraging spending to stimulate the dynamism of the Exchange
Economy. However, we recognise that â€oespending†ideas are easier to implement in research environments than in
of openness, multi-stakeholder approach, and the tactic of using Regional Catalysts) as an eï €ective methodology to
or even prescription, for a healthy dynamic equilibrium of economic systems. We do not consider Game theory a good framework for explaining what has happened in the regions that have adopted the Digital
DIGITAL ECOSYSTEM (digital representations of economy XXX XXX XXX XXX BUSINESS ECOSYSTEM (economy Pe rt
ur ba tio n /C om pe ns at io n Perturbation /C om pensation
Technologies and paradigms that enable the participation of SMES and innovators in the knowledge-based economy
clustering to achieve greater competitiveness in the global economy In the course of the subsequent debates the concept was developed further into the peer production of a †digital
economy and in the knowledge society, and that empowers the creativity, the potentialities, the capacity, and the
economy. In this paper we present only a few of these interrelated keystone principles, showing how they have
Economic activities cannot help but be related to local cultures and regulations. The ability to produce solutions which
The digital ecosystem is the ICT infrastructure designed to support economic activities, which contains the socially
 the knowledge that expresses diï €erent socially-constructed partial interpretations and views of the economy and
the more aspects of the economy can be described and mediated. Thus, when we abandon the mirage of
regional stakeholders, but the technology itself needs to grow out of the languages and interactions between these
stakeholders (Vaca, 2005. In other words, having embraced a holistic approach that highlights the dependence of the business models and interactions and of their formalisation into software services on their socioeconomic and
 The movement of information goods to centre stage as drivers of economic growth  The ever more widespread use of the peer-to-peer modes of conducting the distribution and utilisation of
Up to now economic theory suggests that long-term incentives are stronger under three conditions ï oe) more visible performance to the relevant audience (peers, labour market, and venture capital community
what economists call †strategic complementaritiesâ€. To have an †audienceâ€, programmers will want to work on software projects that will attract a large
based mainly on a new Exchange Economy characterised by peer production behaviour to become integrated with
the Gift Economy. 29 In the gift economy a immediate remuneration is sought not, and in many cases it is expected not
the people who straddle both economies Social constructivism takes a further step to what we have discussed so far in its recognition of language as a medium
socioeconomic development process that can bootstrap the Knowledge Economy in any regional context to construct
Economy, Society and Culture volume ï oe: The rise of the network society Oxford: Blackwell
Communication from the Commission, COM (2003) 729. â€oethe EU Economy: 2003 Review†European commission (2004. Communication from the Commission, COM (2004). 480-ï oe3. 07.2004
interventions take place in the context of wider efforts to create a social economy Whilst the relationships between social innovation and digital technologies are being
Social innovation towards a social economy The definition of social innovation is contested and the subject of an ongoing debate across
establish a (more) social economy. Like social innovation, the concept of a social economy has manifold meanings.
In one sense, all economies are social economies in that there is a moral sentiment between counter-parties engaging in market transactions.
The tendency to monopoly, market failure and non-optimal outcomes challenge this assumption in contemporary economies.
As a consequence, a revival of interest in social economics and the construct of social economics has emerged.
A simple definition suggests â€oethe economy is limited not to the market, but includes principles of redistribution
and reciprocity†(Laville et al. 1994 These principles suggest that increased social integration will play a central role in
establishing a social economy. We argue that both social innovation and digital technologies open up possibilities for greater social integration by addressing social needs,
and generating external network effects, respectively. Moreover, the external network effects of digital technologies are in general) accessible to actors regardless of their position in society.
wider effort to establish a social economy Social Innovation and digital technologies The literature exploring the relationships between social innovation and digital technologies
The economic theory, Work Foundation Degelsegger, A. & Kesselring, A. 2012. Do Nonhumans Make a Difference?
Economy Profile 2015 Spain 2 Spain Doing Business 2015 Â 2014 The International Bank for reconstruction and development /The World bank
across 189 economies, from Afghanistan to Zimbabwe over time. The data set covers 47 economies in Sub
-Saharan Africa, 32 in Latin america and the Caribbean, 25 in East asia and the Pacific, 26 in Eastern europe and
economies. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why
This economy profile presents the Doing Business indicators for Spain. To allow useful comparison, it also
provides data for other selected economies (comparator economies) for each indicator. The data in this report are
current as of June 1, 2014 (except for the paying taxes indicators, which cover the period January†December 2013
benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business
Second, for the 11 economies with a population of more than 100 million, data for a second city have been added
economies are Bangladesh, Brazil, China, India Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United states. Third, for getting
environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business
Economies are ranked from 1 to 189 by the ease of doing business ranking. This year's report presents results for 2 aggregate measures
The ranking of economies is determined by sorting the aggregate distance to frontier (DTF) scores The distance to frontier score benchmarks economies
with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business
data are presented in this year†s economy profile The aggregate ranking on the ease of doing business
indicators against that of all other economies in the Doing Business sample (figure 1. 1)
about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing
economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business
ECONOMY OVERVIEW Region: OECD high income Income category: High income Population: 46,647, 421 GNI per capita (US$:
Figure 1. 1 Where economies stand in the global ranking on the ease of doing business
For policy makers, knowing where their economy stands in the aggregate ranking on the ease of doing
relative to comparator economies and relative to the regional average (figure 1. 2). The economy†s rankings
and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2014 and based on the average of each economy†s distance to frontier (DTF) scores
The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator.
For the economies for which the data cover 2 cities, scores are weighted a population average for the 2 cities
The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator.
For the economies for which the data cover 2 cities, scores are weighted a population average for the 2 cities
economy has changed over time†or how it has changed in different areas. To aid in assessing such changes
measure shows how far on average an economy is from the best performance achieved by any economy on each Doing
Business indicator Comparing the measure for an economy at 2 points in time allows users to assess how much the economy†s regulatory
environment as measured by Doing Business has changed over time†how far it has moved toward (or away from) the
The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on
economy or those of comparator economies in the region, may reveal bottlenecks reflected in large numbers
13.8 13.4 0. 0 35.8 0. 0 0. 0 25.4 0. 0 112 Economies (0. 0
Procedures (number) 5. 0 5. 0 5. 0 3. 0 5. 0 5. 0 3. 0 4. 0 12 Economies (3. 0
Procedures (number) 5. 0 5. 0 8. 0 5. 0 4. 0 1. 0 4. 0 6. 0 4 Economies (1. 0
*Time (days) 12.0 12.5 49.0 40.0 16.0 1. 0 16.0 21.5 3 Economies (1. 0
6. 1 7. 1 6. 1 6. 7 4. 4 7. 3 0. 3 4. 6 4 Economies (0. 0
5 5 4 6 2 2 6 7 3 Economies (12 *13 Spain Doing Business 2015
7 7 6 8 7 7 6 8 23 Economies (8 *Credit registry coverage %of adults
15.3 15.6 0. 0 100.0 100.0 23.4 26.3 100.0 23 Economies (100.0 *Protecting Minority Investors (rank
*Extent of shareholder governance index (0 -10 7. 5 7. 5 7. 8 6. 8 7. 3 5. 8 7. 7 7. 3 France (7. 8
*Time to export (days) 10.0 10.0 10.0 9. 0 19.0 15.0 8. 0 8. 0 5 Economies (6. 0
12.0 12.0 11.0 15.0 12.0 14.5 12.0 11.0 5 Economies (15.0 *Note: DB2014 rankings shown are not last year†s published rankings but comparable rankings for DB2014 that capture the effects of such
recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and
If an economy has no laws or regulations covering a specific area†for example, insolvency†it receives a â€oeno practiceâ€
Similarly, an economy receives a â€oeno practice†or â€oenot possible†mark if regulation exists but is used never in practice or if a
Either way, a â€oeno practice†mark puts the economy at the bottom of the ranking on the
*Two or more economies share the top ranking on this indicator. A number shown in place of an economy†s name indicates the number
of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
http://www. doingbusiness. org Source: Doing Business database 16 Spain Doing Business 2015 STARTING A BUSINESS
several shareholders join forces to start a company Formally registered companies have access to services and institutions from courts to banks as well
business in an economy by recording all procedures officially required or commonly done in practice by
The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a
To make the data comparable across economies Doing Business uses several assumptions about the business and the procedures.
1 For the 11 economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today What does it take to start a business in Spain?
business city of an economy, except for 11 economies for which the data are weighted a population average of the
economies on the ease of starting a business (figure 2. 2 The rankings for comparator economies and the regional
average ranking provide other useful information for assessing how easy it is for an entrepreneur in Spain to
and comparator economies rank on the ease of starting a business Source: Doing Business database
Economies around the world have taken steps making it easier to start a business†streamlining procedures by
information on business entry in that economy Following is a detailed summary of those procedures along with the associated time and cost.
every economy. Where complying with building regulations is excessively costly in time and money many builders opt out.
The ranking of economies on the ease of dealing with construction permits is determined by sorting their
To make the data comparable across economies Doing Business uses several assumptions about the business and the warehouse, including the utility
economies with a population of more than 100 million, data for a second city have been added.
Where does the economy stand today What does it take to comply with the formalities to build
economy, except for 11 economies for which the data are weighted a population average of the 2 largest
economies on the ease of dealing with construction permits (figure 3. 2). The rankings for comparator
economies and the regional average ranking provide other useful information for assessing how easy it is for
Figure 3. 2 How Spain and comparator economies rank on the ease of dealing with construction permits
firms in developing economies have to rely on self -supply, often at a prohibitively high cost.
ranking of economies on the ease of getting electricity is determined by sorting their distance to
data comparable across economies, several assumptions are used The warehouse ï is owned by a local entrepreneur, located
For the 11 economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today What does it take to obtain a new electricity connection
business city of an economy, except for 11 economies for which the data are weighted a population average of the
economies on the ease of getting electricity (figure 4. 2 The rankings for comparator economies and the regional
average ranking provide another perspective in assessing how easy it is for an entrepreneur in Spain to connect a
Figure 4. 2 How Spain and comparator economies rank on the ease of getting electricity
ranking of economies on the ease of registering property is determined by sorting their distance to
make the data comparable across economies several assumptions about the parties to the transaction, the property and the procedures are
2 For the 11 economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today What does it take to complete a property transfer in
business city of an economy, except for 11 economies for which the data are weighted a population average of the
economies on the ease of registering property (figure 5. 2). The rankings for comparator economies and the
regional average ranking provide other useful information for assessing how easy it is for an
and comparator economies rank on the ease of registering property Source: Doing Business database 39 Spain Doing Business 2015
Economies worldwide have been making it easier for entrepreneurs to register and transfer property†such as by computerizing land registries,
the 11 economies with a population of more than 100 million, data for a second city have been added
The ranking of economies on the ease of getting credit is determined by sorting their distance to
Where does the economy stand today How well do the credit information system and collateral and bankruptcy laws in Spain facilitate access to credit
The economy has a score of 7 on the depth of credit information index and a score of 5 on the strength of
economies on the ease of getting credit (figure 6. 1). The rankings for comparator economies and the regional
average ranking provide other useful information for assessing how well regulations and institutions in Spain
Figure 6. 1 How Spain and comparator economies rank on the ease of getting credit
indicators into context is to see where the economy stands in the distribution of scores across economies
Figure 6. 2 highlights the score on the strength of legal rights index for Spain and shows the scores for
comparator economies as well as the regional average score. Figure 6. 3 shows the same for the depth of credit
Economy scores on strength of legal rights index Note: Higher scores indicate that collateral and bankruptcy
Economy scores on depth of credit information index Note: Higher scores indicate the availability of more credit
based on detailed information collected in that economy The data on credit information sharing are collected through a survey of a credit registry and/or credit bureau
assets exist in the economy No Does the law allow businesses to grant a non possessory security right in a single category of
economy receives a score of 1 if there is a"yes"to either bureau or registry.
shareholder participation in major decisions of the company and set detailed standards of accountability for company insiders
The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores
extent of shareholder governance index. To make the data comparable across economies, a case study uses
several assumptions about the business and the transaction The business (Buyer ï is traded a publicly corporation listed on the
multiple shareholders ï Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of
shareholder of the company, proposes that the company purchase used trucks from another company he owns
ï Shareholders sue the interested parties and the members of the board of directors WHAT THE PROTECTING MINORITY
Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions
Ease of shareholder suits index (0†10 Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses
and ease of shareholder indices, divided by 3 Extent of shareholder rights index (0-10.5
Shareholders†rights and role in major corporate decisions Strength of governance structure index (0 -10.5
Governance safeguards protecting shareholders from undue board control and entrenchment Extent of corporate transparency index (0-9
Extent of shareholder governance index 0†10 Sum of the extent of shareholders rights, strength of
governance structure and extent of corporate transparency indices, divided by 3 Strength of investor protection index (0†10
regulation and extent of shareholder governance indices 50 Spain Doing Business 2015 PROTECTING MINORITY INVESTORS
Where does the economy stand today How strong are minority investor protections against self-dealing in Spain?
The economy has a score of 6. 4 on the strength of minority investor protection index, with a
economies on the strength of minority investor protection index (figure 7. 1) . While the indicator does
and comparator economies perform on the strength of minority investor protection index Source: Doing Business database
the economy stands in the distribution of scores across comparator economies. Figures 7. 2 through 7. 7 highlight
the scores on the various minority investor protection indices for Spain in 2014. A summary of scoring for the
Ease of shareholder suits index (0-10 Note: Higher scores indicate greater minority shareholder access to evidence before and during trial
Source: Doing Business database 53 Spain Doing Business 2015 PROTECTING MINORITY INVESTORS Figure 7. 5 How extensive are shareholder rights
Extent of shareholder rights index (0-10.5 Note: The higher the score, the stronger the protections
Source: Doing Business database Figure 7. 6 How strong is the governance structure Strength of governance structure index (0-10.5
to disclosure, director liability, shareholder suits shareholder rights, governance structure and corporate transparency in a standard case study (for more details
see the Data Notes section of the Doing Business 2015 report). ) The summary below shows the details underlying
and/or shareholders required?(0-2 Disclosure on the transaction only 1 Must an external body review the terms of the transaction
Can shareholders sue directly or derivatively for the damage caused by the Buyer-Seller transaction to the company?(
Can shareholders hold the interested director liable for the damage caused by the transaction to the company?(
Can shareholders hold members of the approving body liable for the damage cause by the transaction to the
shareholder plaintiff?(0-1 Yes 1 Must the interested director repay profits made from the
transaction upon a successful claim by a shareholder plaintiff?( (0-1 Yes 1 Can both fines
a shareholder plaintiff?(0-2 Only in case of fraud or bad faith 0 Ease of shareholder suits index (0-10) 5. 0
Before filing suit, can shareholders owning 10%of the company†s share capital inspect the transaction documents
0-1 No 0 Can the plaintiff obtain any documents from the defendant Any relevant document 3
Can shareholder plaintiffs recover their legal expenses from the company?(0-2 Yes if successful 1
Extent of shareholder rights index (0-10.5) 10.5 Can shareholders amend company bylaws or statutes with a
simple majority Yes 1. 5 Can shareholders owning 10%of the company's share capital call for an extraordinary meeting of shareholders
Yes 1. 5 Can shareholders remove members of the board of directors before the end of their term
Yes 1. 5 Must a company obtain its shareholders†approval every time it issues new shares
Yes 1. 5 are granted shareholders automatically subscription rights on new shares Yes 1. 5 Must shareholders approve the election and dismissal of the
external auditor Yes 1. 5 Can shareholders freely trade shares prior to a major corporate action or meeting of shareholders
Yes 1. 5 Strength of governance structure index (0-10.5) 5. 0 is barred the CEO from also serving as chair of the board of
directors No 0 Must the board of directors include independent board members No 0 Must a company have a separate audit committee?
Yes for listed companies 1 Must changes to the voting rights of a series or class of
shareholders upon acquiring 50%of a company Yes for listed companies 1 Is cross-shareholding between 2 independent companies
limited to 10%of outstanding shares Yes 1. 5 is barred a subsidiary from acquiring shares issued by its
Extent of shareholder governance index (0-10) 7. 5 Source: Doing Business database 58 Spain Doing Business 2015
Firms in economies that rank better on the ease of paying taxes in the Doing Business
ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier
economies, several assumptions are used ï Taxpayerco is a medium-size business that started operations on January 1, 2012
position in each economy. All the taxes and mandatory contributions paid during the second year of operation are recorded
yearly basis. The threshold is not based on any economic theory of an â€oeoptimal tax rate†that minimizes distortions
system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied on medium-size
This reduces the bias in the indicators toward economies that do need not to levy significant taxes on companies like the Doing Business standardized case study company
Where does the economy stand today What is the administrative burden of complying with taxes in Spain†and how much do firms pay in taxes?
business city of an economy, except for 11 economies for which the data are weighted a population average of the
economies on the ease of paying taxes (figure 8. 1). The rankings for comparator economies and the regional
average ranking provide other useful information for assessing the tax compliance burden for businesses in
Figure 8. 1 How Spain and comparator economies rank on the ease of paying taxes
Economies around the world have made paying taxes faster and easier for businesses†such as by consolidating filings,
Some economies simplifying tax payment and reducing rates have seen tax revenue rise What tax reforms has Doing Business recorded in Spain
economies easier is increasingly important for business. Excessive document requirements burdensome customs procedures, inefficient port
The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across
economies, Doing Business uses several assumptions about the business and the traded goods The business
For the 11 economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today What does it take to export or import in Spain
the largest business city of an economy, except for 11 economies for which the data are weighted a population
average of the 2 largest business cities. See the chapter on distance to frontier and ease of doing business
economies on the ease of trading across borders (figure 9. 1). The rankings for comparator economies and the
regional average ranking provide other useful information for assessing how easy it is for a business in
Figure 9. 1 How Spain and comparator economies rank on the ease of trading across borders
In economies around the world, trading across borders as measured by Doing Business has become faster and
data comparable across economies, Doing Business uses several assumptions about the case ï The seller and buyer are located in the
economies with a population of more than 100 million, data for a second city have been added
Where does the economy stand today How efficient is the process of resolving a commercial
case scenario in the largest business city of an economy except for 11 economies for which the data are a
population-weighted average of the 2 largest business cities. See the chapter on distance to frontier and ease of
economies on the ease of enforcing contracts (figure 10.1). ) The rankings for comparator economies and the
regional average ranking provide other useful benchmarks for assessing the efficiency of contract enforcement in Spain
Figure 10.1 How Spain and comparator economies rank on the ease of enforcing contracts Source:
quarter of the economies covered by Doing Business by judges as well COURT NAME Claim value:
sustainability in the economy overall What do the indicators cover Doing Business studies the time, cost and outcome of
central banks and the Economist Intelligence Unit In addition, Doing Business evaluates the adequacy and integrity of the existing legal framework
The index tests whether economies adopted internationally accepted good practices in four areas: commencement of proceedings
Where does the economy stand today Combination of quality regulations and efficient practice characterize the top-performing economies.
How efficient are insolvency proceedings in Spain? According to data collected by Doing Business, resolving insolvency
an economy, except for 11 economies for which the data are weighted a population average of the 2 largest
economies on the ease of resolving insolvency (figure 11.1). ) The rankings for comparator economies and the
regional average ranking provide other useful benchmarks for assessing the efficiency of insolvency proceedings in Spain
Figure 11.1 How Spain and comparator economies rank on the ease of resolving insolvency 78 Spain Doing Business 2015
does not present rankings of economies on these indicators nor include the topic in the aggregate distance
economies, several assumptions about the worker and the business are used The worker ï Is a cashier in a supermarket or a grocery store
in the economy) with 60 employees ï Operates a supermarket or grocery store in the economy†s largest business city.
economies the data are collected also for the second largest business city ï Is subject to collective bargaining agreements if
economies that changed their labor market regulation in the past 5 years did so in ways that increased labor
doing business ranking compares economies with one another; the distance to frontier score benchmarks economies with respect to regulatory best practice
showing the absolute distance to the best performance on each Doing Business indicator. When compared
in an economy has changed over time in absolute terms while the ease of doing business ranking can show only
relative to that in other economies Distance to Frontier The distance to frontier score captures the gap between
economies have paid no-in minimum capital requirement (table 15.1 in the Doing Business 2015 report
economy involves 2 main steps. First, individual component indicators are normalized to a common unit where each of the 31 component indicators y (except for
on the indicator across all economies since 2005 or the third year after data for the indicator were collected for
lowest time recorded among all economies that levy the 3 major taxes: profit tax, labor taxes and mandatory
absolute-cost indicators across economies with different inflation trends. The base year for the deflator is 2013 for
all economies In the same formulation, to mitigate the effects of extreme outliers in the distributions of the rescaled data
for most component indicators (very few economies need 700 days to complete the procedures to start a
business, but many need 9 days), the worst performance is calculated after the removal of outliers.
Second, for each economy the scores obtained for individual indicators are aggregated through simple averaging into one distance to frontier score, first for
which the economy has closed the gap to the regulatory frontier over time. And in any given year the score measures how far an
economy is from the best performance at that time Treatment of the total tax rate This year, for the first time, the total tax rate component
economies with a below-average total tax rate than it would have in the calculation done in previous years (line
And for economies with an extreme total tax rate (a rate that is very high relative to
economic theory of an â€oeoptimal tax rate†that minimizes distortions or maximizes efficiency in an economy†s
context of a specific economy 7 For getting credit, indicators are weighted proportionally, according to their contribution to the total score, with a weight of 60%assigned
economies that do need not to levy significant taxes on companies like the Doing Business standardized case
acknowledges the need of economies to collect taxes from firms Calculation of scores for economies with 2 cities
covered For each of the 11 economies for which a second city was added in this year†s report, the distance to frontier
score is calculated as the population-weighted average of the distance to frontier scores for the 2 cities covered
frontier scores for economies with 2 cities covered Source: United nations, Department of Economic and Social
Economy City Weight %Dhaka 78 Chittagong 22 SãO Paulo 61 Rio de janeiro 39 Shanghai 55 Beijing 45
Economies that improved the most across 3 or more Doing Business topics in 2013/14 Doing Business 2015 uses a simple method to calculate
which economies improved the ease of doing business the most. First, it selects the economies that in 2013/14
implemented regulatory reforms making it easier to do business in 3 or more of the 10 topics included in this
economies meet this criterion: Azerbaijan; Benin; the Democratic Republic of congo; CÃ'te d†Ivoire; the Czech
economies on the increase in their distance to frontier score from the previous year using comparable data
Selecting the economies that implemented regulatory reforms in at least 3 topics and had the biggest
intended to highlight economies with ongoing, broad -based reform programs. The improvement in the distance to frontier score is used to identify the top
shown by a change in rankings†that economies have made in their regulatory environment for business
The ranking of economies is determined by sorting the aggregate distance to frontier scores, rounded to 2
How economies rank†from 1 to 189 http://www. doingbusiness. org/rankings Data All the data for 189 economies†topic rankings
studies and customized economy and regional profiles http://www. doingbusiness. org/reports Methodology The methodologies and research papers underlying
More than 10,700 specialists in 189 economies who participate in Doing Business http://www. doingbusiness. org/contributors/doing
people) for 139 economies http://www. doingbusiness. org/data/exploretopics/ent repreneurship Distance to frontier
Data benchmarking 189 economies to the frontier in regulatory practice http://www. doingbusiness. org/data/distance-to
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