Would it though? From what I understand EU has way better social safety nets, yet much smaller entrepreneurship rates compared to USA.
Counter-intuitively, limitations drive innovations. When your resources are limited, you are forced to innovate. When you have infinite resources, you tend to waste it. Ever notice that when you have infinite time, you waste it doing nothing, but when your time is extremely constrained, you tend to use it much more effectively? Same thing happens with companies and money. Read: NASA, Texas Instruments developing laser guided bombs, etc.
For example, because TI had such a limited budget for developing laser guided bombs, they couldn't afford a wind tunnel like their defense-contractor competition. So they dropped scale models of bombs into swimming pools and performed mathematical transformations on the measurements. TI's design ended up being far more innovative and outperformed their money-flush competitors[0]
All that said, I think there is some truth to what you say. If healthcare were decoupled from employers, I would be much more likely to leave my current company and start my own since that is one thing holding me back.
2. Innovation and entrepreneurship are not the same thing. Innovation is coming up with something new, entrepreneurship is starting a new business to make money. The former does not always lead to the latter, and the latter does not always require the former (in fact, it rarely does).
3. What the research in this study shows is that limitations of the financial and survival sort do not drive entrepreneurship.
> It's a truism that American culture celebrates entrepreneurs. The opinion polls show exactly what you expect: Americans are incredibly entrepreneurship-minded. A 2005 survey showed that 28 percent of Americans have considered setting up their own businesses, compared to only 15 percent of Europeans. Yet the employment statistics reveal that Americans are far less likely to actually do it — 14.7 percent of the European workforce is self-employed, compared with only 7.3 percent of Americans. American entrepreneurs are clearly being held back from pursuing their dreams. > ... > What explains the paradox? In Europe working for yourself doesn't affect your health-care coverage...In America, the ambitious many are held back.
[1] https://archive.org/details/trapsellingoutto00broo/page/108/...
This is definitely a multiple factor problem, and health care is just one of them. A couple obvious ones - social acceptance/rejection of this as a path, and government/financial friction. If you have only been exposed to the US, it's pretty shocking how hard it is to get a company up and running in many countries. One of the biggies is fairly direct access to capital with the right risk appetite, which itself is complex.
If this was true you'd see people from poor families being more entrepreneurial than those from rich.
Go talk to the owners of the five nearest local small businesses, ask them how they started, and see how it goes.
Speaking from experience, btw.
*: in fact, merely being "humble" is still relatively privileged, a vast sea of humans exists where internet and food and clean water are fleeting dreams
This is not something to argue about, this is something that that we should measure.
> From what I understand EU has way better social safety nets, yet much smaller entrepreneurship rates compared to USA.
> Counter-intuitively, limitations drive innovations.
It seemed like you were claiming that people with fewer resources may counter-intuitively do more innovative businesses, so providing people with UBI or similar resources could reduce innovation in entrepreneurship.
The inventiveness you need to thrive as a poor person is very different from that, and I don't think losing that kind of inventiveness would be a real loss in our world.
Whether or not basic income itself would increase the degree of self-actualization people have is not an easy question. It is in fact a complicated question deeply integrated with culture. I'd guess peoples opinion on this question mostly reflects their political ideology and/or support for basic income.
However, I think it's orthogonal. Limitations are good, but having a basic fallback is also good.
Essentially, Swedes have far greater economic freedom due to greater economic equality. Despite not having UBI.
Germany is pretty close to the United States, despite the United States being a wealthier nation by comparison.
Also, where did you find these numbers indicating such a big difference?
Try firing an employee in France. It's a two year process minimum and in the end a judge might rule you can't do it.
Also the regulatory landscape in the EU imposes such a high burden on entrepreneurs. Coupled with investors being way more conservatives.
With the cost of space in any major city, anything that requires a workshop, working space, or significant storage space is out of the window nowadays for anyone in a major city.
When I was a teenager my side hustle was buying, fixing, and selling used cars. My dad's was the same with small fishing boats.
The story of these billion dollar companies being started in their parent's garage sounds inspirational and all, but I'd imagine less so for the kids whose parents can't afford home with a garage.
You don't need your parents to be millionaires to get that, but in today's terms this is definitely upper middle class.
I have a dream that Healthcare will someday be decoupled from employment. So much waste is tolerated simply due to the fact that the majority of the expense is borne by your employer before the number they put on your paycheck.
I can live on a part time salary without issue, but health insurance, which is already $200/wk for my family with my employer chipping in, would jump to more like $600/wk, which is just completely untenable. There is no sane reason why health insurance should be my single largest expense each month.
- Increase HSA Contribution Limit
- Allow both Traditional & High Deductible insurance premiums to be paid with the HSA
- Ban employers from directly providing/choosing insurance (ex. US Military)
Essentially everyone goes out onto the open market and buys their insurance using pre-tax HSA contributions (similar to tax benefits to employers now). Employers can continue to "help" be providing dollars to HSA/HSA match, rather than picking your insurance for you.
There are more radical and arguably better solutions, but if you want to see a large improvement with minimal changes/the least controversy this is it. Most insurance companies could likely just convert existing employer provided policies into employee direct ones paid via HSA.
I said there are other, arguably better, solutions (e.g. universal coverage) whereas this is an attempt to solve a near-term issue of employer provided health insurance.
If you can get the political support to pass universal reform to health coverage in the US, then absolutely do that instead. In the current political climate this compromise is still a vast improvement.
The current "war" is between complete re-invention and essentially the status quo. This is neither of those, therefore it upsets both sides, and gets squished by "perfect is the enemy of good."
The second, and successful, move was to allow health reimbursement accounts (HRA) to pay for insurance premiums on the individual market. These plans, an ICHRA, would allow a small business to essentially give pre-tax dollars to the employee for buying health insurance as long as the reimbursements were applied consistently across the employee base.
The second was great, but the first would have been even better since it would have lowered group rates. Individual insurance premiums and deductibles (when not subsidized by gov) are often so expensive they are hard to justify. Still ICHRA’s are at least another tool for employers and employees to share the burden.
But we have many start-ups, which usually migrate to the US as soon as they grow big.
On the other hand it has never been cheaper to start a side hustle.