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If that were the greatest barrier, wouldn't nations with universal health care see higher rates of entrepreneurship? I don't have numbers, but at least anecdota

If that were the greatest barrier, wouldn't nations with universal health care see higher rates of entrepreneurship? I don't have numbers, but at least anecdotally it doesn't seem to be the case. Is the U.K. startup culture particularly impressive?

pembrook 10y ago
Yes they do. However, the cultural and business environments in European nations are often different so it's not a perfect comparison. For example, in most countries you can't just start taking payments and call yourself a "sole proprietor." Creating a business involves money and time which can also be a deterrent. A better study that could represent the effects it would have in the US looked at rates of entrepreneurship before and after people become eligible for Medicaid (age 65). After controlling for all other factors they still saw a sizable increase, and the 65+ age group is certainly far less likely to be first time entrepreneurs than younger age groups: https://thinkprogress.org/universal-health-insurance-boosts-entrepreneurship-df5aef3cdbd0 https://thinkprogress.org/universal-health-insurance-boosts-...
- neuronexmachina 10y ago
  I think a closer cultural/business parallel to the US that also has universal healthcare might be Singapore. I know they have a vibrant startup scene, but I don't know of any quantitative comparisons.
- zyx321 10y ago
  >For example, in most countries you can't just start taking payments and call yourself a "sole proprietor." You could, if you wanted. The problem is that you can easily end up six or seven figures in debt if you fail. Having some sort of protection in the form of an LLC or GmbH is generally preferrable.
specialist 10y ago
I will concede there are multiple factors. Lack of access to capital, winner takes all (pro-corporate) Freedom Markets[tm] decimating competition, etc. New business (and therefor new job) creation in the USA has tanked. Especially in rural areas. However we got here, what is the fix?
- cmdrfred 10y ago
  >New business (and therefor new job) creation in the USA has tanked. The unemployment rate is at a 9 year low and falling. What data do you base this assertion on?
  - wcummings 10y ago
    Jobs weren't created in the "right" places and people don't think they should have to migrate for job opportunities. This has not always been a realistic expectation, tons of people have people have moved to find work in the past and now. Ironically the same people who feel this way seem to dislike immigrants, who are motivated to take risks and move for a shot at a better life.
  - kratak 10y ago
    The unemployment rate is BS. The important number is the labor participation rate.
  - specialist 10y ago
    It's an old story. Just this week: "Let’s look at just one indicator — new business formation. From 2010 to 2014, 60 percent of counties nationwide saw more businesses close than open, compared with just 17 percent during the four years following the 1990s slowdown. During the 1990s recovery, smaller communities — counties with less than half a million people — generated 71 percent of all net new businesses, with counties under 100,000 people accounting for a full third. During the 2010 to 2014 recovery, however, the figure for counties with fewer than half a million people was 19 percent. For counties with less than 100,000 people, it was zero." https://www.washingtonpost.com/posteverything/wp/2017/04/20/want-to-rescue-rural-america-bust-monopolies/?utm_term=.681909ccc2ea https://www.washingtonpost.com/posteverything/wp/2017/04/20/...
ThrustVectoring 10y ago
There's a third factor - collectivist vs individualist culture.
- robotresearcher 10y ago
  If you look at the rankings of new business formation, that factor does not seem as strong as Americans might guess. http://www.nationmaster.com/country-info/stats/Economy/New-businesses-registered/Number/Per-capita http://www.nationmaster.com/country-info/stats/Economy/New-b... The US is below the average for wealthy countries, and ranked 32.
  - lvh 10y ago
    There appear to be some serious flaws in a causal argument from that data; see my other comment https://news.ycombinator.com/item?id=14221542 https://news.ycombinator.com/item?id=14221542 for more details.
Retric 10y ago
#4 UK(7.4/1000) does have over 3x the rate of new bussness per person than the US (2.28 /1000) which ranks #32 and is mostly behind countries with a stronger social safety net. http://www.nationmaster.com/country-info/stats/Economy/New-businesses-registered/Number/Per-capita http://www.nationmaster.com/country-info/stats/Economy/New-b... Now, if you mean startups as a specific type of new and arguably lower risk business backed by VC money. That has more to do with VC funding than people willing to take risks.
- theli0nheart 10y ago
  You don't need to start a new business to be an entrepreneur. You can easily inherit, take over, or join an existing one, and you'd still need to deal with standard barriers, like health care coverage.
- mgkimsal 10y ago
  Thanks! My in-laws from the UK had started and run multiple businesses over 30+ years in the UK (generally small - usually 2-8 employees). Health insurance was one thing they never even had to think about. Of course, there were other issues, but health care wasn't one.
- fpgaminer 10y ago
  Is that data (New businesses/yr/capita) available for California specifically? For example, measures of economic mobility (ability for persons to traverse up the economic class system) are dismal for the U.S. as a whole. But for California specifically we're more-or-less on-par with the best nations. At least, that's what I remember from the RadioLab podcast on the subject. I've always been more skeptical of U.S. wide statistics since then.
- lvh 10y ago
  There seem to be some clear flaws with the causal reasoning there. For example, Cyprus is rocking that chart, but isn't a country with a particularly strong welfare system -- the reason it's on top is because it's a popular destination jurisdiction, not because it's a cradle of entrepreneurial spirit. Malta's in a similar boat. Also, strength of social welfare system is not predictive; for example, Sweden is below the average of EU, OECD and NATO countries. Finally, Singapore scores quite well, and while it probably has somewhat of a destination jurisdiction effect, it is hardly a welfare state.
jnordwick 10y ago
Not necessarily. The US has a of other benefits over those countries often. You can't treat the decision as mostly all or nothing based on access to universal health Care. Also, you had to look at the benefit of universal HC over the current system. Some people will still find a way to get insurance. You can still argue without employer assisted heath insurance and more govt or private options we'd have more entrepreneurship, and many would probably agree.
lr4444lr 10y ago
No, there could be other barriers in those other countries. The article is clearly US-centric.

pembrook 10y ago

Yes they do. However, the cultural and business environments in European nations are often different so it's not a perfect comparison. For example, in most countries you can't just start taking payments and call yourself a "sole proprietor." Creating a business involves money and time which can also be a deterrent. A better study that could represent the effects it would have in the US looked at rates of entrepreneurship before and after people become eligible for Medicaid (age 65). After controlling for all other factors they still saw a sizable increase, and the 65+ age group is certainly far less likely to be first time entrepreneurs than younger age groups: https://thinkprogress.org/universal-health-insurance-boosts-entrepreneurship-df5aef3cdbd0 https://thinkprogress.org/universal-health-insurance-boosts-...

neuronexmachina 10y ago
I think a closer cultural/business parallel to the US that also has universal healthcare might be Singapore. I know they have a vibrant startup scene, but I don't know of any quantitative comparisons.
zyx321 10y ago
>For example, in most countries you can't just start taking payments and call yourself a "sole proprietor." You could, if you wanted. The problem is that you can easily end up six or seven figures in debt if you fail. Having some sort of protection in the form of an LLC or GmbH is generally preferrable.

specialist 10y ago

I will concede there are multiple factors. Lack of access to capital, winner takes all (pro-corporate) Freedom Markets[tm] decimating competition, etc. New business (and therefor new job) creation in the USA has tanked. Especially in rural areas. However we got here, what is the fix?

cmdrfred 10y ago
>New business (and therefor new job) creation in the USA has tanked. The unemployment rate is at a 9 year low and falling. What data do you base this assertion on?
- wcummings 10y ago
  Jobs weren't created in the "right" places and people don't think they should have to migrate for job opportunities. This has not always been a realistic expectation, tons of people have people have moved to find work in the past and now. Ironically the same people who feel this way seem to dislike immigrants, who are motivated to take risks and move for a shot at a better life.
- kratak 10y ago
  The unemployment rate is BS. The important number is the labor participation rate.
- specialist 10y ago
  It's an old story. Just this week: "Let’s look at just one indicator — new business formation. From 2010 to 2014, 60 percent of counties nationwide saw more businesses close than open, compared with just 17 percent during the four years following the 1990s slowdown. During the 1990s recovery, smaller communities — counties with less than half a million people — generated 71 percent of all net new businesses, with counties under 100,000 people accounting for a full third. During the 2010 to 2014 recovery, however, the figure for counties with fewer than half a million people was 19 percent. For counties with less than 100,000 people, it was zero." https://www.washingtonpost.com/posteverything/wp/2017/04/20/want-to-rescue-rural-america-bust-monopolies/?utm_term=.681909ccc2ea https://www.washingtonpost.com/posteverything/wp/2017/04/20/...

ThrustVectoring 10y ago

There's a third factor - collectivist vs individualist culture.

robotresearcher 10y ago
If you look at the rankings of new business formation, that factor does not seem as strong as Americans might guess. http://www.nationmaster.com/country-info/stats/Economy/New-businesses-registered/Number/Per-capita http://www.nationmaster.com/country-info/stats/Economy/New-b... The US is below the average for wealthy countries, and ranked 32.
- lvh 10y ago
  There appear to be some serious flaws in a causal argument from that data; see my other comment https://news.ycombinator.com/item?id=14221542 https://news.ycombinator.com/item?id=14221542 for more details.

Retric 10y ago

#4 UK(7.4/1000) does have over 3x the rate of new bussness per person than the US (2.28 /1000) which ranks #32 and is mostly behind countries with a stronger social safety net. http://www.nationmaster.com/country-info/stats/Economy/New-businesses-registered/Number/Per-capita http://www.nationmaster.com/country-info/stats/Economy/New-b... Now, if you mean startups as a specific type of new and arguably lower risk business backed by VC money. That has more to do with VC funding than people willing to take risks.

theli0nheart 10y ago
You don't need to start a new business to be an entrepreneur. You can easily inherit, take over, or join an existing one, and you'd still need to deal with standard barriers, like health care coverage.
mgkimsal 10y ago
Thanks! My in-laws from the UK had started and run multiple businesses over 30+ years in the UK (generally small - usually 2-8 employees). Health insurance was one thing they never even had to think about. Of course, there were other issues, but health care wasn't one.
fpgaminer 10y ago
Is that data (New businesses/yr/capita) available for California specifically? For example, measures of economic mobility (ability for persons to traverse up the economic class system) are dismal for the U.S. as a whole. But for California specifically we're more-or-less on-par with the best nations. At least, that's what I remember from the RadioLab podcast on the subject. I've always been more skeptical of U.S. wide statistics since then.
lvh 10y ago
There seem to be some clear flaws with the causal reasoning there. For example, Cyprus is rocking that chart, but isn't a country with a particularly strong welfare system -- the reason it's on top is because it's a popular destination jurisdiction, not because it's a cradle of entrepreneurial spirit. Malta's in a similar boat. Also, strength of social welfare system is not predictive; for example, Sweden is below the average of EU, OECD and NATO countries. Finally, Singapore scores quite well, and while it probably has somewhat of a destination jurisdiction effect, it is hardly a welfare state.

jnordwick 10y ago

Not necessarily. The US has a of other benefits over those countries often. You can't treat the decision as mostly all or nothing based on access to universal health Care. Also, you had to look at the benefit of universal HC over the current system. Some people will still find a way to get insurance. You can still argue without employer assisted heath insurance and more govt or private options we'd have more entrepreneurship, and many would probably agree.

lr4444lr 10y ago

No, there could be other barriers in those other countries. The article is clearly US-centric.