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Wednesday, June 26, 2013

Entrepreneurial Mindsets in the World’s Two Largest Economies

By Larry Emond, Gallup Managing Partner for Asia

As the world continues to recover -- slowly -- from the effects of the 2008-2009 global financial crisis, it is essential for the world’s two largest economies, the United States and China, to foster positive economic growth by supporting startups. At Gallup, we believe new business startups can be as or even more important than large companies to economic growth -- startups are a significant provider of new jobs in every major economy.

The U.S. and China, however, both have specific strengths and weaknesses when it comes to the entrepreneurial mindset of their citizens.

A large disparity between the U.S. and China is whether people think their government makes it easy or hard to start a business. In the U.S., 32% say that the government makes it easy to start a business, compared with 82% in China. But about the same percentage of people in each country -- 55% in the U.S. and 52% in China -- think that the city or area in which they live is a good place to start a business.

Respondents from both countries are also equally likely to say that people in their country can get ahead by working hard -- 80% in the U.S. and 86% in China. However, there is evidence of differing views toward entrepreneurship.  

For one, Americans are more likely than respondents in China to say they would rather take a risk and build their own business than work for someone else -- 60% vs. 35%. And, if they don’t already own a business, Americans are more likely than the Chinese to say they have thought about starting their own business -- 68% to 44%.

One reason the Chinese may be less likely than Americans to say they want to start their own business is because they lack the trusted advisers and training they need. The Chinese are less likely than Americans to say there is someone outside their family who they trust enough to make partner in starting a business -- 45% vs. 68%. And, residents of China are much less likely than Americans to say they know someone who would be able to give them good advice about managing a business -- 33% vs. 74%. The Chinese are also less likely than Americans to say they have access to training on how to start a business -- 18% vs. 59%.

Even though Americans are much more likely than the Chinese to say they have thought about owning their own business, adults in both countries who do not currently own a business are equally as likely to say they plan to start one in the next 12 months -- 8% in the U.S. and 9% in China.

As the world’s top two economies continue to look for ways to spur growth, there are specific strategies that leaders in both countries can follow to increase the number of startups and improve their likelihood for success.

Leaders in China: As China begins to battle declining GDP growth and, like many other significant economies, focuses on small and medium-sized enterprises to spur job creation and growth, it is essential to create an environment with programs that support entrepreneurs. Chinese leaders should promote initiatives that leverage Chinese residents’ generally positive views toward entrepreneurship. Leaders should also establish programs that encourage successful entrepreneurs in local areas to provide advice to and mentor budding entrepreneurs. Another major factor is training -- Chinese leaders could provide widely available training in key skills required for running both a startup and an established business.

Leaders in America: My advice is simple -- take steps that will lead potential entrepreneurs to view the government as being helpful, rather than a hindrance to creating new business enterprises.


Anonymous said...
July 11, 2013 at 7:14 PM  

It might be easy to start a business in America, but try getting help from the state or government run organizations such as SCORE, SBA, Small Business Development Center, MEDA, etc. and you will find yourself incredibly frustrated wondering why it is that no matter how hard you try you can not get assistance. I still recall calling three local SCORE offices, following instruction from another SCORE Office, and leaving about four messages just to find that it took four months for someone to call me back. Soon after the call, which of course was of no use, I started to get emails from them asking me to participate in polls and after a few months, the emails stopped.

It is a well known fact that entrepreneurship drives innovation and economic growth and crazy, idiotic and sad to see how the government is incapable of providing valuable assistance to small businesses.

Sophia Walker said...
November 8, 2013 at 8:16 AM  

Yes, it is quite difficult to get a grant or government assistance or bank loans, almost like you are discouraged to get a loan, especially if you are not qualified or you fail to supply a solid business plan. One obvious solution would be to bootstrap your business or save your salary for a full year and start after a year or two. Problem solved.

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