That does not seem to pass the smell test for me. Do we see a greater percentage of entrepreneurs from Canada or Europe than from the US? I didn't look up hard numbers but I doubt it.
> Do we see a greater percentage of entrepreneurs from Canada or Europe than from the US?
Yes, if one uses self-employment as a proxy for entrepreneurship. The US trails Canada and Western European countries in self employment as a percentage of the labour force.
Here's a dirty little secret … and I know this is going to upset many of the statist types … but vast majority of those OECD types of datasets are so utterly polluted that they are essentially useless beyond the broadest of strokes. Just alone the definition and the application of that definition and the capacity to accurately capture the data alone produces excessive inaccuracies that in essence rely on the formality of the process and the institutional perception as a means to claim or even just project assumed authority and accuracy of the data.
To put it in a different context; the self-delusional con job that was the lie about how wonderful and amazing the Afghan national army was for the last about 10 years minimum, is a perfect example of just how broad, deep, and long a blatant fraud can be perpetuated in such an open and overt manner, all underpinned by all kinds of shiny presentations and back rubbing soliloquies.
It's all fake. I know that makes people's cognitive dissonance flare up, but that's the uncomfortable truth. The emperor in fact has no clothes on, nor do any of his courtiers. We will see how long the charade can last.
If your point is "lies, damn lies, and statistics," then I guess I can't argue with that.
If your point is something more specific about OECD self-employment data, or the processes and practices for a specific or category of "OECD types of datasets" or general practices of society-level datasets...I encourage you to make that point, and give others something to work with.
Dirtier and Secreter: People's cognitive dissonance would flare way up if you shared convincing evidence that the OECD or the similar bodies fake their self-employment data.
Self-employment isn’t a good proxy for entrepreneurship. Many (most?) entrepreneurs are not technically self-employed in the US. In Europe, there is a strong bias toward being an “independent contractor” because that is almost the only way to earn a top wage, whereas in the US that is entirely unnecessary since normal companies readily pay regular employees top dollar if they perform.
Being self-employed in Europe is a product of the reality that companies are willing to pay contractors much more than the equivalent employees. If you are highly skilled, being self-employed is the only way to earn what you are worth.
>New research shows that 44 million workers—or 28.2%—were self-employed at some point during a given week in 2019.
Much of it depends on how they define self employed. "Contract Work" doesn't count as self employed for the government.
>Those figures appear to go against other surveys showing huge growth in contract work, which is transforming the U.S. labor market. A survey conducted in December by NPR/Marist found that contract work makes up 20 percent or more of the U.S. workforce.
>Why the seemingly large discrepancy?
>Many point to the government's methodology. The Labor Department, for example, did not include people who augment their income through contract work
Interesting data set. Norway and Denmark score surprisingly low; lower than Canada, only just above the US. Colombia is the extreme outlier on the high end with 50%. Netherland is in the upper third with 17%, but is the second highest wealthy country (after New Zealand). Most countries of similar GDP/capita have a far lower amount of self-employment.
In Belgium, once you reach a certain pay (roughly from 100k euros yearly onwards), it reduces tax burden for employer and employee when employees become independent contractors.
The Dutch tax service keeps trying to figure out new rules of how to distinguish between true self-employed people and fake self-employeds who basically function as regular employees, but without the rights and benefits of employees. This is mainly meant to protect excessive exploitation of low-paid (gig-economy) workers, but it certainly limits my options as well.
I'm self-employed and tend to work for a single client at a time, usually on projects of between half a year and two years. I work on a team with employees, doing similar work, except I'm more empowered, more in control of my own way of working (also because the tax service demands that, which is good in this case). I'm not being exploited the way employees or gig workers are. And if the government thinks this is some kind of tax loophole, I'd happily pay more tax, as long as I can continue working this way.
For a startup you probably don't have the capital / financial support to ensure redundancy packages etc.
If you need someone to come in on your greenfield project and hit the ground running, thats what contractors are usually used for; the beginning and the end of the lifecycle.
It really doesn't have too much with regulations etc usually.
For engineers for example, you will earn higher income and pay less tax, different rates. And larger companies usually have a set asside budget for contractors.
Its easier as an engineer as its never hard to find another job. If this wasn't the case, you would see a higher percentage of employees who require job securoty.
Nothing to do with regulation from my experience, just better pay and more flexibility.
No, they're still solid jobs compared to what lots of other people get paid. But managers and other corporate types still get paid a lot more. And self-employed, you can also get paid that much, just not as an employee.
>The US trails Canada and Western European countries in self employment as a percentage of the labour force.
I distinctly remember being told by an Austrian I met once that they need a sizable amount of liquid assets up front before they can even qualify for operating a business.
Startups are not the only entrepreneurial business.
Running a small business like a store, farm, etc without a spouse that carries the insurance is insane. Even businesses like bars and restaurants over time have tipped to larger or even public companies.
When I was a 1099 consultant, I had a heath issue that would have bankrupted us if my wife wasn’t working for a municipal government with good insurance.
You see more of these types of businesses in Europe.
I can say that my health insurance (as an independent worker with Healthcare.gov plan) costs more than my home mortgage and utilities combined. A significant amount more; and I still pay down a $10,000 deductible on top of that before any reimbursement kicks in.
Even as anecdata, I see a few issues with this comparison. For one, part of your mortgage payment is simply a repayment of loan principal, which is not a cost of living. Only the interest portion might be considered a legitimate household expense.
Second, with a $10K deductible, it sounds like you have a HDHP (high deductible health plan), of which the main feature is lower premiums, and also the ability to fund an HSA (health savings account) for additional tax savings.
Even with your deductible, a wide variety of basic and preventive health services are available for free to you under ACA's minimum essential coverage provision.
For example, see this list [0] for all adults, along with a similar ones specifically for women and children.
Another axis to look at is the US over time (which also has less confounding with other differences across cultures). Looking at the graphs in the article, it appears Obamacare may have stopped the decline in self-employed workers. And since Obamacare started, the number of (likely) business applications increased steadily, doubling over 10 years. Unfortunately that graph doesn't go back in time far enough to determine if that's a deviation from a previous trend or not (it looks like it was increasing at a similar rate just before), but it's at least consistent with Obamacare helping slightly.
What's more striking is the 50% jump in business applications around the time of covid. Maybe that's in part due to stimulus?
> Do we see a greater percentage of entrepreneurs from Canada or Europe than from the US?
Don't know about Canada, but in my neck of Europe (Slovenia) it seems everyone who is ambitious defaults to entrepreneurship. Because it's the only way to advance or get anywhere interesting at all. And almost everyone has a sidehustle or two.
To the point that a while back the government had to crack down on sidehustling and associated grey economy. Laws like not being allowed to "help your neighbors" build a house.
Now I live in San Francisco and the entrepreneurship spirit is much less. Tech just pays far too well for most people to faff around starting their own thing. To quote a friend of mine "Dude, I'd be stupid to start a company right now! Have you seen how much companies will pay for my skills? wow"
Canadians have a pastime of whining about our Big 5 banks. Nobody ever switches to another bank.
Same with telecom. We complain about the prices. Nobody tries their competitors like Freedom.
I hear stories of students joining startups in the USA over FAANG. Here many people do startups to boost their resumes for big company jobs (I was part of a startup accelerator where a lot of people were resume building). I know people doing this now. Building startups to be more employable by Amazon.
> Canada at least is an extremely risk averse place.
That also seems to be the case for investments.
Everything seems to be centered around "safe" businesses with proven track record or just real estate. There's no VC putting money on a crazy idea (and they getting a home run one time out of 10).
Anecdotally, healthcare benefits did factor in to my decision making when I thought about opening my own shop. I have two small kids and decided at this point in my life I’m going to stay put instead of starting something.
Anecdotally, I’ve kept multiple jobs longer than I’ve wanted because they had good health insurance… I also switched jobs to have kids using better insurance
I think there really is something in American culture that fuels entrepreneurship. Maybe it's the puritan and "prosperity gospel" roots.
It would be interesting to see a comparison of entrepreneurship between US and Canada in the early 1900s before health care and especially job sponsored health care were so common.
>Maybe it's the puritan and "prosperity gospel" roots.
No, the puritans (and Europeans in general) considered bankruptcy a moral failing and it was punished with societal banishment and prison.
The United States invented modern bankruptcy law. States have taken it a step further and protected most major assets from being seized in a bankruptcy (house, car, certain amounts of cash), so the absolute worst case from failing is that you dust yourself off, wait a few years and try again. It's just part of the culture now.
There's also the fact that, in America anyone/any family can make it and even become president/senator. It's by the American people and for the American people. Just look at the Kennedys.
In Canada, you look at the country's history and even its current head of state and... it's a foreign non-elected monarch. The other head of state is non-elected as well and is supposed to be a representative of the crown. Same thing for their senate, all nominated. Even until recently, the highest court of the country was... in London! That would simply be unthinkable in America.
This kind of things permeate aspects of life; there is this notion that there is a natural order of things and that people are born into certain roles. And it also seems true in the business world; Banking and Telecom, for instance, are fiercely protected and have an almost impossible moat to surmount for a competitor to come and disrupt the market.
It's not the only factor: Americans culturally value entrepeneurship very strongly. People love the idea of being your own boss or starting your own business, and telling friends that you plan to do this will generally garner positive comments (often times even if you fail).
It would be really hard to pin the causality of something like this... some of the most 'entrepreneurial' places in the US are some of the 'bluest' areas
How does this correlate with the population of educated people, and people whose spouses have health coverage? Red / Blue does correlate to education level.
There could be other correlations as well, including having the technical ability to create something of marketable value, management experience from a previous job, a certain level of financial / career security, family members willing to invest, etc.
Blue areas may also be slightly more prosperous, creating a local market of customers (people and businesses) with money.
> some of the most 'entrepreneurial' places in the US are some of the 'bluest' areas
I'm not sure how you reach this conclusion.
"Screw this I'm starting my own business" is far, far more common in the blue collar world than the white collar world and they tend to vote way redder.
Right, but this correlation with "blueness" is, I think, accidental and doesn't account for small businesses.
For example, I would expect more small local businesses in red states than blue states. The tech sector will favor large corporations because of the magnitude of investment involved, at least traditionally (if we are to believe the "economies of scale" explanation; some challenge it, but at the very least, it is causally relevant). So you might see more startup entrepreneurship in blue states because that's where the tech expertise is already concentrated. And because those in tech tend to have college degrees at higher rates, and colleges tend to encourage neoliberal and left-leaning views, you should expect to see more tech in blue states because of that, so you have a self-reinforcing process (there are of course other considerations).
But I wouldn't attribute entrepreneurship to the presence of social programs. On the one hand, those who need social programs are not going to be very educated and are most likely going to be much more interested in making basic ends meet over some business venture. On the other hand, once they receive social benefits, they are often not very motivated to try to start a small local business like a food cart either since they have food on the table. So you need to appeal to cultural factors to account for motivation as well.
Maybe it really is socialism kills entrepreneurial spirit. If you can be an artist or a 35hr/wk public servant and live well, why bother being an entrepreneur?
> If you can be an artist or a 35hr/wk public servant and live well, why bother being an entrepreneur?
Maybe because I don't want to be a public servant? I mean, it's important work that needs to be done, but the impression I get from my wife is that it involves a lot of bureaucracy.
If we had a basic income or something like that, it would be much easier to take the risk to become an entrepreneur.
My take is that there is a whole culture side of things to consider. Some cultures will have a higher general opinion of entrepreneurs than others.
In Quebec, Canada you still see a lot of that mindset where a successful entrepreneur is more associated with a slimy businessman than a smart person. It's slowly changing however.
> In Quebec, Canada you still see a lot of that mindset where a successful entrepreneur is more associated with a slimy businessman than a smart person.
Historically, didn't the employees speak French and the bosses English?
From what I understood, there was very much a glass ceiling and discrimination, similar to what was going on here in the south. Capital wouldn't be loaned across ethnic lines for instance.
That might contribute to the perception of entrepreneurs being shady: they historically were there to fleece the locals, not build and prosper.
Does Israel have a lot of startups because of free healthcare or simply because it benefits from a culture that encourages startups? They also have a higher average education level which probably helps to some extent.
No saying that healthcare is not a factor, I just doubt that the parent's explanation that free healthcare is holding back would-be entrepreneurs is well-founded.
Right, you'd have to back this up with numbers, but if startups are considered, the US outstrips everyone else, certainly in the West.
The story is going to be more complicated. Ethos is an important factor. Some countries have cultures that are prohibitive or discouraging for entrepreneurs or encourage safety and comfort over risky pursuits, and working for a large corp is going to be more compatible with that than risking your neck to run your own business. I suspect countries that have national health care are going to correlate strongly with those which are risk averse and therefore less entrepreneurial.
Does it matter what we see in Canada our Europe? I wouldn't surprised the USA has a highest percentage of entrepreneurs because of multitude of other reasons than healthcare such as capital, regulations and values/spirit. I also believe free healthcare would decrease the barrier to entry to starting a company, it would make the USA an even bigger entrepeneur centric country. Now, would the USA be better with universal healthcare in general, I am not sure. I live in the USA (almost 6 years), born, studied and worked 6 years in Canada.
> Does it matter what we see in Canada our Europe?
Well yeah… if we’re going to repeat the same thing and expect to see a certain outcome, we had better see that outcome where this has already been implemented. It’s the closest thing to a crystal ball that we’re going to get.
