Who in the world is entrepreneurial? (page 2)

Geoff Lewis

India, despite its move into the big leagues of global economies, lags far behind in entrepreneurship. It has even fewer high-expectation business launchers per capita than Brazil and is 88th in the world for ease of starting a business, although the World Bank gives it points for implementing reforms in 2006.

The top reformer in 2006 was Georgia. The former Soviet republic slashed minimum capital requirements and reduced the time to settle a commercial dispute to 285 days from 375. Portugal cut the number of steps to start a business to eight from 54 and soared 80 slots in the rankings. Before the reforms, launching a business in Portugal required publishing a notice in a special government gazette. Now that's all done online, says Caralee McLiesh, program manager for Doing Business.

What may be most remarkable about the changing global climate for entrepreneurs is that it has taken so long to come this far. For 30 years, national and provincial governments have attempted to replicate the U.S. business climate. In 1978, David Birch, a business consultant, published Job Creation in America: How Our Smallest Companies Put the Most People to Work and soon was telling Margaret Thatcher and other heads of state how they, too, might spawn the next Intel.

Years of reforms followed. But in Europe the number of high-expectation entrepreneurs remains "disturbingly low," says Erkko Autio, chair in technology and entrepreneurship at Imperial College in London and author of the GEM study. What's missing, says Birch, is cultural support for the people who are willing to trade a steady paycheck for a chance to build something. In France, Germany, and Sweden, entrepreneurs are still regarded as somewhat dclass. "It comes down to what do your parents say if you do X," says Birch. A 2005 poll by IFOP (ifop.com) showed that 76% of French youth find the idea of a government job "attractive." In a 2006 survey by Junior Achievement (ja.org), more than 70% of U.S. teenagers said they would like to start their own business.

One of the key barometers of entrepreneurial activity is the presence of role models. "Every high school kid in the United States knows who Sergey Brin and Larry Page are," says Bygrave. Now this cultural revolution is spreading to China, where newly minted billionaires such as Zhengrong Shi, 43, chairman of Suntech Power Holdings (suntech-power.com), are becoming folk heroes.

"All my old friends are starting companies now," says Linda Bi, who left China 18 years ago with her late husband and is now president of Chicago Expert Importers (ceimporters.com), which sources parts for recreational vehicles in China. China boasts the highest number of high-expectation entrepreneurs. Its low scores on the World Bank lists pushed it down to number 42 in our ranking, however.

Another factor that policymakers can't legislate is a taste for risk taking. In the U.S., failure is an option; many successful entrepreneurs have two or three failed companies in their past.

"We are certain that fear of failure is a key factor in reducing entrepreneurialism," says Bygrave.

In places such as Sweden - and even in England - a business failure is regarded as a family disgrace. In Germany a bankrupt business owner may wind up paying creditors for 30 years, making it nearly impossible to start over. If a second act is an impossibility, ambitious entrepreneurs may never attempt the first.

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Additional Reporting by Emily Maltby contributed to this article.
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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.