August 27, 2014

Think Starting a Business in The US is Hard? Try Italy

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

8 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

8 Reactions

  1. Interesting data, Anita.

    Italy?

    I’m going to have to tell me wife. Now, she may really want to visit there-and see what the deal is there!

    The Franchise King®

    • Ciao Joel! Italy has plenty of red tape + the influence of the mafia…

      If you visit, please stop by Gothenburg, Sweden. :)

      • I’m an Italian entrepreneur.
        Red tapes, yes, plenty!
        As much that bribery can be seen as the only solution. But is not!
        The problem is the itself. None in the Public Administration can decide, none wants to take responsibility of their choices, because all the Public employees are scared to be suited by a judge. To avoid troubles any kind of study, authorization, opinion of a commission etc etc. is asked in order to give the responsibility to someone else.
        To fire a public employee is 99,99% impossible, and they can stay very quiet in their offices waiting that a little entrepreneur carry on (without any support) all the steps.
        Just to have an idea: days to be payed by the Public(2011): Italy 90, France 20, Germany 10, UK 18.
        And even worst: in January 2011 an Italian Mecenate decided to pay a 25millions € restoration of the Coliseum (cleaning it and security measures) nothing else than a gift in exchange of a panel saying that it was financed by a private company. The work cold start only in December 2013. 2 years to decide if accepting the money.
        This is how it works in Italy.
        The Mafia? organized criminality as everywhere else. Doesn’t affect as You say.
        Do not take movies as rules.

  2. The United States is no longer the land of opportunity for small business start-ups. Regulations continue to oppress business operations, have you ever reviewed the forms that the feds send out to small manufacturers, the same form every year, a day and a half at least to complete and a response is mandatory. If those forms are not completed, then the business is fined.

    Add to that the atrocious ACA, political push for higher minimum wages, unions accompanying Department of Labor during business compliance inspections, a litigious society, and people wonder why things aren’t manufactured in America any longer.

    In my opinion our elected leaders are waging a war on small business.

  3. Haha that means businesses who are thinking of venturing into Italy should think again. I think it is more than the policies. There must be something about it that makes business hard. But I am kind of wondering why Malta has such a high ‘easy’ percentage.

  4. I must belong to minority in Sweden, thinking the Big Brother is making it is too hard to do business with plenty of regulations. Case in point, I am trying to register a general partnership / trading company with a friend. We have registered all the data on “verksamt” (a collaboration site among several government agencies). That went pretty quick, but when we have waited several weeks for a confirmation of the name, and then Swedish Companies Registration Office comes back and state that they don’t “like” the company name, without any real explanation! But we will not give up our name… ;)

    I am glad to hear that the youth is seeing small business owners as role models! :)

  5. Carlo: Thanks for telling us how things is (not) working in Italy. I am a renaissance man and send a mental thank-you to the patron of the arts (Maecenas) during the history. I am fighting for a second renaissance, by spreading better ideas (business philosophy) and supporting organizations that are giving “ammo” (rational arguments) to the new intellectuals.

    As a former purchaser at a manufacturing company in Sweden, I remembered how the accounts payable dept. said it took to get paid from Italy.

    Best Premises,

    Martin Lindeskog

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