Where is the best place for entrepreneurship?
- By Becca Lutwyche -
- Jun 01, 2012
Where is the best place for entrepreneurship? This guest blog makes the case for the US as a paradise for new entrepreneurs...
It is undisputed that since the economic downturn occurred in the late 2000s, instigated by problems stemming from the United States subprime mortgage market, the economic climates across all global economies proves a much more difficult arena for entrepreneurship to thrive.
Although all markets are struggling, according to a recent study the USA still ranks as the best place for entrepreneurs. Other countries are making astounding progress in terms of their power across the global economy. This coupled with their technological creativity increases their attraction to entrepreneurial individuals. Examples of these countries include China, which is rapidly becoming one of the world’s top training nations. However according to the 2012 Global Entrepreneurship and Development Index, the USA is still the best place for entrepreneurs to develop a new business. However, the study also highlighted that it still has a long way to go to make up for the damage caused during the global financial crisis.
So why is the USA the best place for entrepreneurship?
The United States leads the way, and has done for many years, in terms of policy that encourages entrepreneurial behaviour. Policy initiatives include promoting entrepreneurship within the education system and increasing access to finance for small and medium enterprises. The Small Business Administration tackles both of these issues by distributing funds through financial intermediaries as well as encouraging and supporting entrepreneurship. Other major trading countries such as the UK are now looking to the Unites States for inspiration on how their banking systems could be improved in order to aid small and medium enterprises. In contrast to the British banking system, which is concentrated around a small number of big banking organisations, the US has a large number of small lenders that are able to provide finance to entrepreneurs. Another contrast between the United States and many of its European counterparts is that entrepreneurs within the US have greater access to alternative sources of finance, such as peer-to-peer lending companies like Prosper.
These proactive and practical solutions to aiding small businesses such as making access to finance easier and promoting entrepreneurship, can be seen as the concrete manifestations of the overall culture of the United States. The whole country, its policies and its businesses are underpinned by an entrepreneurial cultural ethos. The American dream is a key idea that highlights this, the notion that any individual, from any background, can succeed if they are willing to work hard enough. This culture of determination, perseverance and refusal to give up, are elements that not only define the United States as a country but are also entrepreneurial traits.
It is often cited by entrepreneurship commentators that there is a distinct difference in the tolerance of failure between the cultures of Europe and the USA. Failure is seen as embarrassing in Europe whereas in the USA is seen as a learning curve. As around 50% of small businesses fail in the first five years, the cultural ethos of picking yourself back up and learning from your mistakes may afford the entrepreneur with a better environment in which to thrive that that of other countries, especially European ones.
The United States is a country built on the back of many of its successful entrepreneurs. Its policy initiatives and underlying cultural ethos make it a great place in which to exist as an entrepreneur. The opportunities are abundant and are there to be exploited by those daring enough to take a risk and realise their dreams.
By Becca Lutwyche.
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