The PwC EMEA Private Business Attractiveness Index 2023

How putting the fundamentals in place makes a country’s attractiveness to private businesses more resilient

  • Insight
  • 5 minute read
  • November 21, 2023

While every private business is unique, they all share some common needs that are consistent wherever they’re based. Things like a strong private business landscape in which to operate; a thriving start-up ecosystem to support growth and capital-raising; high-quality infrastructure, from IT to broadband to affordable premises; a ready supply of skilled workers; and – increasingly – a clear policy commitment to sustainability and climate action. Our latest benchmarking of 33 countries across EMEA as places for entrepreneurial and private businesses to locate and thrive, demonstrates clearly that when countries have the key attributes such as these in place, they remain attractive irrespective of short-term economic or social challenges.

This is the third year in which we’ve produced the PwC EMEA Private Business Attractiveness Index, applying an objective analysis of a range of attributes to rank countries across EMEA as conducive locations for private businesses. Rather than relying on sentiment or survey data, we’ve derived our Index data – as in previous years – from highly credible, publicly available sources that provide impartial measures of tangible, on-the-ground activity within each jurisdiction. We believe this data-led approach is the best way to assess and compare each individual jurisdiction as a place for private businesses to locate.

In developing and launching the Index back in 2021, our aim wasn’t to criticise countries’ policies towards private businesses or apportion blame for a lack of attractiveness. Rather, our goal was to provide guidance to private business leaders, governments and policymakers on how countries can improve their countries as locations for private businesses, and thereby stimulate higher economic growth and dynamism. It’s no coincidence that, each year, the Index has shown that a country’s GDP per capita correlates closely with our ranking of its attractiveness to private businesses. This year is no exception, again confirming the relevance of the Index and its methodology. 

Our 2023 Index: Updating and expanding the criteria to provide deeper and more relevant insights

In our EMEA Private Business Attractiveness Index 2023, we’ve built on the reports from the previous two years by refining the criteria to reflect ongoing changes in private businesses’ priorities and operating environment.

The effect is that we’ve expanded our criteria from 51 metrics spread across eight different categories in 2022, to 64 metrics across nine categories this year. The biggest change is that we’ve split the previous single category of “Environmental, Social and Governance” (ESG) into two new separate categories – “Sustainability and Climate” and “Social Responsibility and Governance”. We’ve also added new data points under each of these categories. This change allows a more granular analysis of jurisdictional performance across the component parts of ESG. It also reflects the growing importance of ESG issues generally, together with the ongoing rapid expansion of the ESG agenda from its origins in the “E” to include the “S”, as companies’ impacts on people and communities come under growing scrutiny. The table below shows our 2023 categories and metrics, with the additions since last year highlighted.

Figure 1: The Attractiveness Index benchmarking methodology for 2023

The Attractiveness Index benchmarking methodology for 2023

Maintaining attractiveness in tough times: riding out turbulence by meeting private businesses’ core priorities

In last year’s Index report, we noted that the way to become more attractive to private businesses is not to focus narrowly on being a leader in just one or two attributes, such as offering low tax rates – but to strike a balance across all the attributes they’re seeking, from skills to infrastructure and beyond. This year, the need for balance is still apparent. But what also shines through is that by putting in place the core elements that private businesses are seeking, a country can maintain its long-term attractiveness through and beyond whatever short-term turbulence it may encounter.

The positive impact of putting the fundamental in place is underlined by the “heatmap” in Figure 2. It shows the overall ranking of the 33 EMEA jurisdictions in our 2023 Index, complete with colour-coding to indicate their current rating both overall and in each of four bands – leading, advancing, developing or emerging. One positive aspect leaps out immediately: the fact that so many jurisdictions – from large to small, and across all sub-regions of EMEA – are actively providing a positive and supportive environment for private businesses. But a closer look at the positioning of some of the various countries in the ranking reveals some more nuanced insights.

Take Germany. Recently, it has been widely characterised as the “sick man of Europe”, suffering a technical recession, inflation at historically high levels and falling business confidence. Yet despite these challenges, Germany has moved up the ranking of leading EMEA jurisdictions for overall attractiveness in the past year, rising from fourth to third. The reason? Whatever the current headwinds, Germany rates highly on many of the key elements that private businesses value most – including ranking second in EMEA for its private business landscape, start-up ecosystem and technology/infrastructure. These strengths far outweigh the fact that it doesn’t even make the top ten for macroeconomics or for its tax and regulatory landscape. For Germany, having the key cornerstones in place means private businesses look beyond the immediate issues, and focus on its long-term potential as a business location.

Figure 2: Our overall EMEA Private Business Attractiveness Index ranking for 2023

Overall rank Jurisdiction

Score 2023

Score 2022

Score 2021

Score trajectory

1 Switzerland





2 Sweden





3 Germany





4 Netherlands





5 Denmark 66.9 69.0  








7 UK




8 Finland




9 Ireland




10 Spain 61.7 59.2 55.7 ⬆️
11 France 60.2 63.9 59.7 ⬇️
12 Luxembourg 59.6 63.1 54.9 ⬇️
13 Austria 58.9 55.7 51.2 ⬆️
14 Belgium 57.9 57.6 50.6 ⬆️
15 Portugal 53.8 52.0 48.5 ⬆️
16 Italy 51.9 50.9 47.5 ⬆️
17 Estonia 51.4 56.7 52.4 ⬇️
18 Poland 49.2 43.5 41.6 ⬇️
19 Lithuania 47.9 51.2 49.1 ⬇️
20 Cyprus 47.1 42.6 54.5 ⬆️
21 Malta 45.4 45.2 51.1 ⬆️
22 Czech Republic 44.7 44.3 47.2 ⬆️
23 South Africa 40.7 42.1 33.6 ⬇️
24 Hungary 40.5 41.2 44.5 ⬇️
25 Latvia 40.4 42.6 42.6 ⬇️
26 Slovenia 40.2 45.0 45.3 ⬇️
27 Greece 39.0 35.9 32.8 ⬆️
28 Romania 37.8 30.5 41.7 ⬆️
29 Bulgaria 37.3 36.1 43 ⬆️
30 Slovakia 36.0 38.8 43.7 ⬇️
31 Croatia 35.2 37.4 38.5 ⬇️
32 Kenya 33.3 31.4 33.6 ⬆️
33 Nigeria 30.1 30.2 22.7 ⬇️

Targeting in-demand attributes can be a recipe for policy success

Drawing on the example set by Germany, we can see the power of putting the fundamentals in place mirrored across other leading countries in the Index. Switzerland has topped the overall ranking each year – and continues to do so – largely thanks to its top rating on its private business landscape, and on education, skills and talent. What’s more, a high ranking isn’t the sole preserve of the larger countries. Germany’s population of 83 million is several times larger than that of any of the other locations in the top five. And Denmark, with a population of less than six million, holds on to fifth place this year – buoyed up by coming second both in the sustainability and climate category and in social responsibility and governance, and fourth for education, skills and talent.

It's also interesting to note that only two of the countries featuring in the top ten overall – Switzerland and Sweden, placed first and second respectively – make the top ten in the tax and regulatory landscape category. This reinforces a message we’ve noted in previous years, that being attractive to private businesses is about much more than offering low tax rates. A far more effective approach is to identify the attributes that entrepreneurs and private businesses are seeking when selecting a location, and then look to shape policy to develop those characteristics. As our Index underlines, any country – large or small – has the opportunity to use this selective and targeted approach to raise its game in attracting private businesses.

A final point to note is that, again as we’ve highlighted in previous years, entrepreneurial and private companies are generally less able than large corporations to move easily between different jurisdictions. This strengthens their tendency to look at a location’s fundamental attributes and future potential when making a choice. Rather than the latest low-balling corporation tax rate, what they’re really seeking is predictable business conditions against which they can plan with certainty: Germany and Denmark both had thriving private business communities even when their tax rates were much higher. So a jurisdiction with a steady hand on the policy tiller is much more attractive than one that’s constantly flip-flopping in areas like tax and regulation.

A closer analysis of correlations between individual categories and countries’ overall ranking provides further support for a targeted approach

As highlighted above, some of the metrics we’ve applied in our assessment of countries’ relative attractiveness have a significantly bigger impact than others on their overall ranking. So we decided to investigate these differences more closely, and draw out their implications for private businesses themselves and for governments looking to create conducive environments.

To do this, we ran a correlation analysis between the total EMEA Private Business Attractiveness Index score, the nine category scores, and GDP per capita. This analysis enables us to quantify in statistical terms how strong the relationship actually is between each of the three sets of data points. 

What did we find? The output from our correlation analysis is shown below in the chart in Figure 2. In it, a score of +0.85 or higher indicates a strong positive correlation between the data points, a score of 0 indicates no correlation, and a score of -0.85 or lower indicates a strong negative correlation.

Figure 3: Degrees of correlation between countries’ category scores and overall attractiveness

Figure 3: Degrees of correlation between countries’ category scores and overall attractiveness

What shines through is that the strongest positive correlations emerge between the overall attractiveness score and the following three category scores: (1) private business landscape; (2) start-up ecosystem; and (3) technology and infrastructure. This suggests these factors are the most influential in determining a jurisdiction’s overall ranking for its relative attractiveness to entrepreneurial and private businesses.

Conversely, the weakest statistical correlations are between the overall attractiveness score and two categories of metrics: (1) tax and regulatory environment and (2) macroeconomics. This seems to indicate that a jurisdiction’s approach to taxation and its current macroeconomic performance have a relatively low degree of influence on how favourably private businesses view a country as a place to operate and grow.

Close alignment to GDP per capita validates our approach to the Index

A further significant finding from our correlation analysis is a consistently close alignment between a jurisdiction’s overall attractiveness to private businesses on our Index and its GDP per capita. As Figure 4 shows, most countries’ overall attractiveness aligns closely with the size of their economy per head, with the exception of a handful of outliers – Luxembourg, Ireland, the UK and so on – that can each be explained through specific local factors.

In our view, this correlation with GDP per capita demonstrates clearly that the Attractiveness Index we have designed, developed and refined over the past three years is both robust and relevant. Entrepreneurial and private businesses are a key engine – often the key engine – of economic dynamism, growth and employment in many countries. The fact that our Index rankings map so closely onto GDP per capita confirms that the composition of the Index reflects the reality of those countries that are getting things right, and providing the most conducive environments for private businesses.

Figure 4: Correlation between countries overall attractiveness and their GDP per capita

Figure 4: Correlation between countries overall attractiveness and their GDP per capita

A drill-down at both ends of the correlation spectrum reveals further insights

Returning to the widely varying levels of correlation we revealed earlier between specific categories and countries’ overall attractiveness ranking, we decided to take a closer look at two categories at either end of the spectrum: private business landscape (the category with highest correlation to the overall attractiveness scores) and macroeconomics (the lowest correlation).

On the private business landscape, this category has remained unchanged in this year’s Index in terms of its constituent metrics, and is allocated a weighted contribution of 15% of the overall score. Achieving a positive correlation score of +0.94, it includes metrics like the percentage of “large private businesses” represented in a country, the levels of M&A and deal activity, and the size of foreign direct investment (FDI) flows. The correlation between scores in this category and countries’ overall attractiveness score is shown in Figure 5. As you can see, the interrelationship is both remarkably close and very consistent across the index ranking.

The countries that tend to fare best in this category are those with a long-standing and successful track record in nurturing, building and maintaining a vibrant community of entrepreneurial and private businesses across many industries. It’s no coincidence that the top three countries in this category are the same as in the overall Index: Switzerland, Sweden and Germany.

Figure 5: Correlation between countries’ scores on private business landscape and overall attractiveness

Figure 4: Correlation between countries overall attractiveness and their GDP per capita

By contrast, the bottom end of the correlation continuum is occupied by the macroeconomics category, with a negative correlation to the overall score of -0.26. Allocated a weighting of 12.5% of the overall score, this category includes metrics such as GDP growth rate, inflation rate, consumer confidence and productivity growth. It was expanded this year to include gas and electricity prices and a country’s cost-of-living index.

The category’s apparent lack of correlation with a country’s overall attractiveness underlines the degree to which private businesses look beyond short-term economic volatility and turbulence when evaluating a location, and focus instead on its longer-term potential and future suitability as a place to do business. At root, what private business leaders are seeking is stability and certainty against which to plan, and a positive policy environment. Short-term economic gyrations do little to affect these attributes.

Figure 6: Correlation between countries’ scores on macroeconomics and overall attractiveness

Figure 4: Correlation between countries overall attractiveness and their GDP per capita

Conclusion: focusing on the key pillars of attractiveness

What messages should private businesses and policymakers at all levels of government draw from our EMEA Private Business Attractiveness Index 2023? 

In our view, the main takeaway from this year’s findings for countries and their governments across EMEA is the vital importance of putting in place the fundamentals that private businesses value most highly and will seek out: things like a strong and supportive private business landscape, a vibrant and active start-up ecosystem, and a solid base of technology and infrastructure. In cases where a location is lagging behind other jurisdictions in categories such as these, it can significantly increase its attractiveness to private businesses by raising its game in these areas. As in previous years, our Index underlines once again that an approach based on offering low corporate taxes and expecting private businesses to come simply won’t work.

Meanwhile, for entrepreneurial and private businesses themselves already operating within a jurisdiction, the main takeaway is the value of pressing policymakers to make improvements in the most important categories. This means business leaders making their voices heard – whether through trade associations, jointly with other private businesses or individually – in lobbying for change. By contrast, if they’re currently seeking a jurisdiction in which to locate their entire business or some of its operations, they should actively seek a country that excels on the categories that matter most, thereby sending a signal to others that they need to improve their offer in those areas.

The fact remains that many – indeed all – countries across EMEA have the opportunity and potential to be world-leading locations for private businesses to set up, operate and grow. To achieve this, the first step is to put in place the key pillars of attractiveness. In a world that’s fast-changing and ever more competitive, there’s no time to lose. The time to start? Today.

Contact us

Peter Englisch

Peter Englisch

Global Family Business Leader and EMEA Entrepreneurial & Private Business Leader, Partner, PwC Germany

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Contact us

Peter Englisch

Peter Englisch

Global Family Business Leader and EMEA Entrepreneurial & Private Business Leader, Partner, PwC Germany