Nesta Working Paper 16/02
Issued: September 2016
Keywords: Entrepreneurial ecosystem measurement, regional ecosystems, domain name systems, entrepreneurship in the UK
JEL codes: R12, O12, O3
What is the rate of entrepreneurship around the world? How does it differ by country, by region and by sector? Without a comprehensive, centralised and global registry for new firm founding, this question is difficult to answer.
In this paper, we make progress on this issue by using a central insight: most growth‐oriented businesses around the world begin by registering a domain name and launching a website. We propose a novel method based on leveraging the domain name system registration system central to the operation of the internet to provide a measure of regional entrepreneurship.
Using machine learning and text‐analysis techniques, we show how domain name registration data could be used to count new firm formation at an extremely granular level, both over time and at the micro‐geographic level. We provide a sample application of these ideas to measure new firm formation in Oxford and Cambridge, UK.
This work highlights the promise of using domain name registration data to measure entrepreneurial activity across many regions of the world, especially when systematic business registration data are unavailable. This work complements and improves upon a number of existing such efforts including the Global Entrepreneurship Monitor, World Bank New Business density database and the European Digital City Index.
Abhishek Nagaraj, UC Berkeley and NBER
Sibo Wang, Massachusetts Institute of Technology
The Nesta Working Paper Series is intended to make available early results of research undertaken or supported by Nesta and its partners in order to elicit comments and suggestions for revisions and to encourage discussion and further debate prior to publication (ISSN 2050‐9820). © Year 2016 by the author(s). Short sections of text, tables and figures may be reproduced without explicit permission provided that full credit is given to the source. The views expressed in this working paper are those of the author(s) and do not necessarily represent those of Nesta.