Ken Phillips, in an article for Independent Contractors Australia, analyzes the failure of Australian government programs to nurture more entrepreneurship and innovation. The problem, he says, is that society is structured in a way that discourages self-employment. This decreases the amount of innovation in society because the experience of self-employment engenders a psychology of innovation. The self-employed person must constantly come up with new, creative ways to please clients. Phillips contrast self-employment to standard employment, which fosters a psychology of obedience to superiors and thus a lack of creative thinking.
The Institute for Justice’s City Studies series examines the political red tape that keeps entrepreneurs from getting their businesses off the ground. The studies focus on “real-world entrepreneurs from eight different cities across the nation,” such as Los Angeles’ Jill Bigelow. Her “most frustrating experience while trying to open her restaurant was when an inspector would not allow her to open because her previously approved wall tile did not have enough ‘reflective value.’” Despite being in the top ten most economically free countries, the U.S. clearly has a long way to go towards truly supporting entrepreneurs.
Watch the Institute for Justice’s entertaining video that highlights some of the aggravating roadblocks that entrepreneurs face:
Dr. Jeff Cornwall discusses a recent survey of small businesspeople on his Entrepreneurial Mind blog. According to the survey, most small business owners are motivated by the desire to be their own boss, and find entrepreneurship much more fulfilling and financially rewarding than they expected. The respondents also reported that entrepreneurship was much more difficult than they had expected, due primarily to the longer hours entrepreneurs spend working.
“The conventional wisdom is that [small] businesses account for half of the labor force and are therefore the engine of future job creation. That’s not quite the case. The more precise factor is not the size of businesses, but rather their age,” say Carl Schramm, Robert Litan, and Dane Stangler.
Last month’s testimony of Thomas Sullivan, the chief counsel for advocacy at the Small Business Administration, before the House Committee on Small Business includes some interesting data about the cost of regulation for small businesses. Sullivan reported the results of a 2005 study, The Impact of Regulatory Costs on Small Firms (PDF), which “found that, in general, small businesses are disproportionately impacted by the total federal regulatory burden. The overall regulatory burden was estimated … to exceed $1.1 trillion in 2004. For small firms, employing fewer than 20 employees, the annual regulatory burden in 2004 was estimated to be $7,647 per employee – which is 45 percent greater than the $5,282 per employee burden estimated for firms with more than 500 employees.”
Ken Phillips, in an article for Independent Contractors Australia, analyzes the failure of Australian government programs to nurture more entrepreneurship and innovation. The problem, he says, is that society is structured in a way that discourages self-employment. This decreases the amount of innovation in society because the experience of self-employment engenders a psychology of innovation. The self-employed person must constantly come up with new, creative ways to please clients. Phillips contrast self-employment to standard employment, which fosters a psychology of obedience to superiors and thus a lack of creative thinking.
