A few plots in addition to yesterday’s post on startups.
Startups and economic development
Sources: CruchBase.com dataset and Penn World Table 7.0.
That’s not a bad fit for relations between startups and GDP. The number of startups in the dataset seems to be a good indicator of entrepreneurial activity in general.
Web data and language barriers
Like other sources based on voluntary reporting, CruchBase may have data biased on one or another way. For example, it may underrepresent countries, in which English is not a major language. And we expect a bias in favor of bigger firms. And here’s the case:
China and Russia indeed either have bigger startups on average or just underreport to CrunchBase. The latter is the case because these are exactly two major countries that stand behind a language firewall. They have their own Facebooks, Twitters, and Amazons. So, we expect them to be less active on CruchBase. More so:
(US and UK are excluded to make the graph readable. 100+ startup countries included.)
Group 1 are countries with < 0.02 startups per 1,000 inhabitants and Group 2 are the rest. And in result Group 2 contains countries with an explicitly high role of English language. So, the break indeed looks like a language thing.
Nevertheless, language per se is not a big factor in development, so it doesn’t bias the data on GDP in a systematic way. (You can also control the very first plot for the percentage of English-speaking population.)