Debating Europe raises the issue: “A majority of Europeans (58%) would prefer to work as an employee rather than risk starting their own business. This contrasts starkly with attitudes in the United States, where a majority (51%) say they would prefer to strike out alone.”
In my experience red tape is a big factor – but that’s not just EU issue: it’s everywhere. In the US, the home of the entrepreneurial spirit, there is such a thicket of regulations that people spend a huge amount of time and effort on compliance. When I thought of setting up my own company in Switzerland – not an EU member and considered to be business friendly – I gave up when I realised that I would have to deal with a mountain of paperwork (setting up the company, complying with various regulations, tax statements, etc). I would have spent so much time and effort on administrative tasks, that I would have had not enough time left to perform productive work to generate an income. Not everybody can afford lawyers, accountants and administrative staff at the beginning. And if an entrepreneur is to spend half of the capital and 90% of his/her time on legal and administrative issues, they will screw up or give up.
My conclusion is: direct financial support from governments is not the best solution, but they do have a role to play: get out of the way as far as possible and simplify paperwork and procedures. In fact, I will float a revolutionary idea: there are legions of civil servants out there, busy issuing regulations and making sure people apply them – but public money would be better spent putting some (or all) of those bureaucrats to work WITH the entrepreneurs, advising and helping, instead of throwing obstacles under our feet all the time.