July 13, 2024

Economix: Nurturing Small Businesses Around the World

12:21 p.m. | Updated In an earlier post, I looked at some new data from the Organization for Economic Cooperation and Development that showed the small-business presence in the United States to be somewhat weaker than in peer countries.

Somehow, though, by many measurements America appears to have an economic environment that is far friendlier to small and new companies.

The administrative burden required to start a new company, for example, is relatively low in the United States compared with most other developed and emerging markets.

The O.E.C.D. looked at a composite measure reflecting the “procedures, time and costs necessary to incorporate and register a new firm with up to 50 employees and start-up capital of 10 times the economy’s per-capita gross national income.” This metric found Mexico and China to be most restrictive, while Ireland and Germany to be the least. The United States is on the less-restrictive end of the spectrum.

DESCRIPTIONSource: Organization for Economic Cooperation and Development

The United States also has a good venture capital market. Venture capital spending in America adds up to about 0.09 percent of the country’s gross domestic product — a higher percentage than any other country the O.E.C.D. looked at except for Israel. Israel’s venture capital spending as a share of the economy is about twice that.

Source: Organization for Economic Cooperation and Development

And on other measures, entrepreneurs are looked upon especially favorably by Americans, according to survey conducted annually by the European Commission Directorate-General Enterprise and Industry.

The latest survey, conducted between Dec. 10, 2009, and Jan. 16, 2010, covered 36 countries. In response to a question about “your opinion about entrepreneurs (self-employed, business owners),” 73.4 percent of Americans polled said they had a “rather favorable” attitude toward this group. That was among the most positive responses from the countries surveyed.

Source: Organization for Economic Cooperation and Development; European Commission Directorate-General Enterprise and Industry

Given a climate so favorable to entrepreneurs, what might account for the fact that self-employment and other measures of entrepreneurship are lower in the United States than in many other developed countries? Any suggestions, readers?

Article source: http://feeds.nytimes.com/click.phdo?i=9b257345e25c066191e112c3269539d8

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