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In Global Entrepreneurship, One Small Initiative Can Make One Huge Difference

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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Entrepreneurs love to grumble about the roadblocks and delays created by bureaucrats. Government officials, they say, are slow, bumbling and concerned only about hewing to their rules and clocking out at 4:55 p.m. But in a study of global entrepreneurship, Raffi Amit and Mauro Guillen , both Wharton management professors, have found that a simple, if smart, bureaucratic initiative mattered critically in determining a country’s level of entrepreneurship. Specifically, countries that created electronic business registries saw far higher levels of new business formation than those with traditional paper ones. Even the announcement that a country planned to establish an online log led to a jump in business registrations. How could such a small change make such a big difference? “It represents the removal of red tape,” says Amit, an expert in entrepreneurship and academic director of the Goergen Entrepreneurial Management Program . “Red tape is the big barrier to entrepreneurial activity.…

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