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Citizen today, March 2012 - Governments are helping entrepreneurs grow - EY - Global

Citizen today, March 2012

Governments are helping
entrepreneurs grow

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Of the rapid-growth markets, India and China benefit from the most supportive culture for entrepreneurs.

If done correctly, government involvement in entrepreneurial activities can yield substantial rewards for both government and entrepreneurs. Our report examines what G20 governments are doing — and should be doing — to assist these engines of growth.

We recently published a barometer based on a perceptions survey of more than 1,000 entrepreneurs across the G20 countries, and a review of quantitative economic indicators in each country and the EU.

The survey focused on these five issues:

Entrepreneurship culture: Countries with stronger entrepreneurial cultures are more tolerant and understanding of business failure. They do not perceive this as a barrier to entry, but as an opportunity to learn. The majority of interviewees across the G20 (76%) are quite positive about the entrepreneurship culture in their country. Among the mature markets, the US and Canada are the benchmarks, with nearly 9 in 10 entrepreneurs believing the culture to be encouraging and supportive of new businesses. Of the rapid-growth markets, India (98%) and China (92%) benefit from the most supportive culture for entrepreneurs.

Education and training: The mature and rapid-growth markets differ on their view of entrepreneurship-specific training, however. Our survey found that 80% of entrepreneurs in the G20 rapid-growth markets believe that students need to follow specific training to become entrepreneurs, while those in the mature markets are less convinced (59%). When looking at the mature markets' perception in more detail, it emerges that, in Australia, Canada, the US and the UK, fewer than 50% of entrepreneurs think that students need to follow specific training.

Access to funding: Almost two-thirds of the entrepreneurs we interviewed believed that it is difficult for young entrepreneurs to access financing; a perception that varies widely from country to country. Despite some optimistic perceptions in Saudi Arabia, China, Indonesia and Canada, access to funding is generally viewed as a challenge. Greater difficulties are perceived in South Africa (with 80% of entrepreneurs expressing difficulties), Russia (90%), France (84%) and Germany (80%).

Regulation and taxation: entrepreneurs across the G20 are optimistic about the progress achieved, or made in the last five years to improve entrepreneurship regulation. In particular, nearly 60% of entrepreneurs from the rapid-growth markets perceived big reductions in the complexity of business regulations. The exceptions are South Africa and Brazil, whose entrepreneurs reported less favorable progress.

Coordinated support: When asked about the overall quality of coordination to support their long-term growth, more than half of G20 entrepreneurs rated coordination "poor" or "very poor" in their country. In the mature markets, 47% of entrepreneurs said the coordination specifically between business incubators, government agencies, chambers of commerce, entrepreneurs' clubs and associations and mentoring programs had deteriorated or was unchanged. Despite large differences between countries in the G20, on average, more than one-half of entrepreneurs in the group indicated that support is poorly coordinated.

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