Normally this blog is focused on estate, trust, and related financial and tax issues. But I’m self-employed and I am a minority owner in an unrelated start up company, so public issues dealing with the economics of start up companies draw my interest.
Below is a link to the results of the most recent World Bank ranking of economies around the world. Note my observations:
1. The US is ranked 13th in the world when it comes to the ease of starting a new company, even though it is 4th overall in ease of doing business generally. This means that the US economy is structured (primary due to politics, e.g., unions) to benefit large established companies, not startups.
2. The US is ranked 72nd in terms of taxes. This is bad, because the lower the ranking the worse the tax burden on business. 71 countries around the world have a more competitive tax structure for business than the US.
3. The US is ranked 20th in cross border trade. Trade creates jobs on both sides of the border. 19 countries around the world have a more favorable cross border trade structure than the US.
4. The US is 17th when it comes to business access to utilities and the construction permitting process.
Historically, economic growth coming out of a recession is led by small business, particularly start ups where entrepreneurs are willing to take risks with their skills and capital. If we want our economy to turn around, the US has to make the economic environment more favorable to start up companies. The rest of the world is leaving us behind.