Why America is No Longer Tops in Entrepreneurship
Get the working capital your business needs from Entrepreneur Lending, powered by CAN Capital. Learn More »If you've been feeling that our country isn't as hot a place for entrepreneurs as it once was, it's not your imagination. A new study from the Small Business Administration's Office of Advocacy shows the U.S. has sunk to third place when it comes to fostering entrepreneurial creativity. Researchers for the SBA took a look at the Global Enterpreneurship and Development Index, which looks at more than a dozen primary attributes for supporting entrepreneurial effort. The upshot: The U.S. now ranks third behind Denmark and -- brace yourself! -- Canada.
Where are we going wrong? The study found America strong in competitiveness, startup skills, and new technology, but we fall short in cultural support for entrepreneurs, our tech sector is weakening compared with other countries' tech effort, and as a result we have fewer high-growth businesses. Reasons we are weak in these areas include fallout from the dot-com bubble of the early '00s, the recession, and simply the comparatively better progress made by other countries.
"The global perception of the country as a land of opportunity and as the Mecca for individuals wanting to do something new and different seems to be somewhat challenged by the facts," researchers Zoltan Acs and Laszlo Szerb concluded.
We scored lower than Canada and Nordic countries in terms of entrepreneurial attitudes and activities, but higher in aspirations. In other words, more people are sitting around fastasizing about being an entrepreneur in America, but fewer are taking the plunge.
"This seems to suggest that even though the presence of powerful role models and past successes makes Americans have a keen desire to be entrepreneurial, the actual process is finding fewer takers than one would expect," they write. "Cultural support for entrepreneurship and the American youth's perception of entrepreneurship as a viable career choice seem to be limited."
I'm not sure they're right on that. As the mom of a high-school teen who's been active in Future Business Leaders, and a reporter who's written about wonderful youth-entrepreneurship programs such as Empowerment Group's Youth Entrepreneurship Program, I think the problem isn't at that level.
It's when you get out there and actually try to start a business -- maybe in your dorm room, or maybe after you graduate -- that there's often a lack of support. There's only so many incubators out there. Not every business is near an SBA Small Business Development Center or SCORE office. For many, that critical infrastructure is missing.
We could use more entrepreneurship programs in colleges, more incubators, and more funding for startups at every level. The shrinking venture-capital sector certainly isn't helping us fuel the growth of "gazelles," those fast-growing companies so essential to economic recovery.
Many more don't take advantage of the resources that are out there. Sort of the entrepreneur equivalent of not asking for directions...and it is apparently having real consequences for our nation's economic future.
At the risk of stating the obvious, in today's economy, there's also a lack of available capital, too.
What do you think would boost America's global entrepreneurial standing -- and more importantly, get more entrepreneurs up and going? Leave a comment and let us know.