OECD data released in the July issue of Entrepreneurship at a Glance shows that startup rates remain largely below pre-crisis levels. This is particularly so in the Euro area.
Despite the gloomy scenario, there is some good news in the OECD analysis: startups rates are responsive to policy changes. For example, startup rates in France have been boosted by the introduction of measures to ease bureaucracy and improve tax incentives for the self-employed.
It is important, of course, for startups to grow to create wealth and employment, a naturally difficult task and more so in the current environment. In this regard, the OECD report warns that Australia and the UK are showing tentative signs of a pick-up in startups but this is driven by an increase in sole-proprietor self-employed businesses.
Business failure is of course a key part of the analysis. While the number of business closures has not fallen back since the wake of the crisis, attitudes to business failures are reported to have become more positive. This means that while lending may be tight, cultural capital is picking up as the crisis serves to raise awareness of the important role played by entrepreneurs in the recovery. Let’s hope that turns around the actual rate of entrepreneurship among under 25-year-olds– currently around 4.0% in OECD countries, according to the report.
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