regulations hurt small business

If you think it’s hard to start a business here in the United States, you might just consider how hard people perceive it in other countries.  A whopping 96% of Italians say their government makes it hard to start a business. Greece, Spain and Portugal aren’t far behind — with 93%, 82% and 80% respectively saying their governments make it hard.

And what are some of the places where entrepreneurs think their government doesn’t give them such a hard time?  Try Malta, Sweden and Luxembourg.

This chart from a recent Gallup Poll says a lot about the perception of how regulations hurt small business and startups in Europe today:

Regulatory burden of European entrepreneurs

Meanwhile, back in the United States, don’t pat yourselves on the back yet.  We Americans are not immune from our own perceptions about government interference and obstacles.

There’s a strong perception among small businesses that regulations hurt them.  Citing different Gallup polls from 2013, Professor Scott Shane pointed out how small business owners perceive regulations as being a problem. And business owners — the ones who actually have to comply with regulations – see regulations as more of a hindrance than the average citizen.

Shane wrote:

“Similarly, 72 percent of small business owners said that government regulations were a problem, while only 48 percent of American adults said so.  * * *  Taxes and regulation are problematic for a larger fraction of small business owners than Americans overall.”

Favorable Impression of Entrepreneurs and Business Owners

With unemployment still high in Europe, you’d think entrepreneurship could be part of the answer.  Say the Gallup pollsters:

“While residents in most EU countries are more likely to feel the government makes it hard, rather than easy, to start a business, this perception is particularly troublesome to future growth in countries such as Greece and Spain, where unemployment is not expected to drop much lower than 26% this year. New jobs in these and several other European countries will largely need to come from the private sector after austerity measures forced some of the deepest public-sector job cuts in a generation.”

Many Europeans have a good opinion of entrepreneurs.  They believe entrepreneurs to be good role models, a Gallup Poll says.  Compare this chart to the one above:

Business owners as role models in Europe

And what about the United States?  According to the 2014 Edelman Trust Barometer, small businesses and family-owned businesses are trusted more than their larger counterparts or government in North America.   Family owned businesses are trusted by 85% and small and midsize businesses are trusted by 78%.

Bottom line: The majority of people in the United States and Europe view entrepreneurs and small businesses owners favorably.  Yet those same business owners and entrepreneurs believe their governments get in their way far too much and that regulations hurt small business and startups.

Italian Entrepreneur Photo via Shutterstock

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