Determinants of Entrepreneurship in the United States of America

Posted: 24 Nov 2009

See all articles by Fonnie van der Nol

Fonnie van der Nol

affiliation not provided to SSRN

Tommy Wong

affiliation not provided to SSRN

I. Verheul

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Date Written: 2002

Abstract

The recent history of entrepreneurship in the UnitedStates is examined, as well as the policies and institutions affectingentrepreneurship.The rise of California's Silicon Valley in 1980s was oneof the first indications that entrepreneurship is a vital part of the U.S.economy. While large flagship corporations like IBM were governed by rules andhierarchical decision-making structures, Silicon Valley entrepreneurs valuedspontaneity, openness, and a scorn for rules and hierarchies.Suchattitudes have created a favorable entrepreneurial climate in the UnitedStates.High levels of entry and exit rates suggest that theentrepreneurial impulse is alive and well.The popularity ofentrepreneurial activities may be attributed to the fact that starting abusiness in the United States, where employment structures are flexible, isfairly easy.The high supply of business owners meets the demand forentrepreneurship that has accompanied the shift in the U.S. comparativeadvantage away from traditional industry and labor and toward technology andknowledge.Furthermore, the policies of American institutions effectivelymatch the supply of entrepreneurs to the demand for entrepreneurship; morespecifically, entrepreneurs (including those with a failed business) havelittle difficulty in procuring assistance from banks, and few regulations existregarding the starting of new businesses, which is especially appealing toimmigrants and minorities. While the United States has managed to create an entrepreneur-friendlyenvironment, other countries must recognize that attempts to emulate only onepart of the U.S. system are likely to fail.To stimulate entrepreneurshipaccording to the American model, countries must take a systemic approach toinstitutional reform. (SAA)

Keywords: Knowledge economies, Knowledge-based firms, Firm ownership, Institutional reforms, Cultural attitudes, Public policies, Entrepreneurial environment, Employment patterns, Regulations

Suggested Citation

van der Nol, Fonnie and Wong, Tommy and Verheul, Ingrid, Determinants of Entrepreneurship in the United States of America (2002). Entrepreneurship: Determinants and Policy in a European-US Comparison, Vol. 27, p. 209-245 2002. Available at SSRN: https://ssrn.com/abstract=1511557

Fonnie Van der Nol

affiliation not provided to SSRN

No Address Available

Tommy Wong

affiliation not provided to SSRN

No Address Available

Ingrid Verheul

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burgemeester Oudlaan 50
3062 PA Rotterdam, NL 3062 PA
Netherlands
+31 10 4081398 (Phone)
+31 10 4089146 (Fax)

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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