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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 we

by 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.

Retric 10y ago
Sweden is still well above the US and if many countries all have strong safety nets one of them has to be on the bottom of that list. But sure, if you remove countries with less than 10 million you are going to end up with fewer outsiders on lists like this. However, the US is relatively far down on this list relative the way we talk about it as a bastion of innovation. I mean we are just above France which does not fit the narrative about strong worker protections preventing new businesses.
- lvh 10y ago
  That demonstrates that strong worker protections doesn't necessarily decrease the number of businesses created. It does not demonstrate the original claim that they promote innovation. If you look at how the data has changed over time as a proxy (in some cases) for uncertainty on the data, you can see that Sweden's current rates are new. In the 2000s, the US was well ahead of it. However, in the 2000s, the US had a Bush administration; Sweden's social welfare net hasn't significantly changed in relative scope during the last decades. If it is true that social welfare nets promote innovation and companies per capita are a good proxy for innovation, why has that changed? Number of entities for innovation is a questionable proxy for reasons already mentioned in my grandparent comment. As another example, taking your example of France: regulation changes pretty drastically as company size increases, which promotes creating new companies instead of growing existing ones, artificially driving up the number of entities while not really having a meaningful effect on innovation and only having a small effect on de-facto corporate structure. If there was a predictive effect, shouldn't we be seeing other evidence of entrepreneurship where at least some of these countries also do well?

by lvh 10y ago

Retric 10y ago

Sweden is still well above the US and if many countries all have strong safety nets one of them has to be on the bottom of that list. But sure, if you remove countries with less than 10 million you are going to end up with fewer outsiders on lists like this. However, the US is relatively far down on this list relative the way we talk about it as a bastion of innovation. I mean we are just above France which does not fit the narrative about strong worker protections preventing new businesses.

lvh 10y ago
That demonstrates that strong worker protections doesn't necessarily decrease the number of businesses created. It does not demonstrate the original claim that they promote innovation. If you look at how the data has changed over time as a proxy (in some cases) for uncertainty on the data, you can see that Sweden's current rates are new. In the 2000s, the US was well ahead of it. However, in the 2000s, the US had a Bush administration; Sweden's social welfare net hasn't significantly changed in relative scope during the last decades. If it is true that social welfare nets promote innovation and companies per capita are a good proxy for innovation, why has that changed? Number of entities for innovation is a questionable proxy for reasons already mentioned in my grandparent comment. As another example, taking your example of France: regulation changes pretty drastically as company size increases, which promotes creating new companies instead of growing existing ones, artificially driving up the number of entities while not really having a meaningful effect on innovation and only having a small effect on de-facto corporate structure. If there was a predictive effect, shouldn't we be seeing other evidence of entrepreneurship where at least some of these countries also do well?