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Entrepreneur-friendly Countries in New Business Research
23/2/01



A new research report, "Not Just Peanuts", examining the entrepreneurial environment in Europe and America has been released by Arthur Andersen and GrowthPlus. Its findings show that the UK ranks as the most entrepreneur-friendly country of the list, followed by the United States and Spain, with the Netherlands and Italy occupying a joint fourth place.

Looked at in terms of a number of critical factors relating to funding, people and the economic situation, the research also found that Sweden is distinctly entrepreneur-unfriendly. This country emerged as the lowest ranking of the whole sample. In effect, this means that Sweden fails to encourage the creation of new business or the development of growth companies in any meaningful way.

Focusing on the issue of funding for business, the research revealed a number of significant country results. The UK ranks well in this department, due to its nurturing of growth through tax incentives, in which respect it is followed closely by France. The latter country also scores highly through its good access to funding, investment encouragement and tax incentives to venture investors. Germany scores less well here, and particularly with regard to encouraging investment. In this sense, it is the only country of the ten to have emerged as "less than standard".

The research results for the treatment of people show a different picture of the countries, however. The Netherlands is the winner here, providing the most attractive conditions for creative remuneration (such as stock options and Employee Share Ownership Programmes). It is also appears to be the country most tolerant of failure in business, being the only country to score "better than standard". The research points out the problem of general intolerance of failure, reminding us that being entrepreneurial implies being willing to take risk. In fact, previous research undertaken by GrowthPlus on Europe’s 500 fast growing companies shows that many entrepreneurs fail the first time. It is this vital experience enables them to succeed later on. In the analysis of the business environment, the study shows that the UK once again scores well, holding first place alongside the United States. Spain emerges as another strong country, particularly in terms of its capital gains tax and labour legislation. By comparison, Austria and the Netherlands were the only 2 countries to consistently rank very poorly across all the environmental factors considered.