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In Brazil, the interviewers say they have difficulty to setting up a company, which lasts 119 days, while in other countries it lasts 20 days

With many countries facing high levels of unemployment and many challenges on the path of economic growth, the study of G20 Entrepreneurship Barometer, the multinational consulting and auditing EY (formerly Ernst & Young), is a warning to the leaders of the G20 countries to collaborate with entrepreneurs as a way to improve their economies and create jobs.

The study presents a new method to rank the countries in the group according to the five pillars of ecosystem entrepreneur: access to financing, entrepreneurial culture; taxes and regulation, education and training, and coordinated support. The Barometer is based on interviews with 1500 entrepreneurs and data on the conditions and best practices for entrepreneurship in the G20 countries.

For Brazilian entrepreneurs, Taxes and Regulations were considered the items that most impact business growth. The average time to start a business is 119 days, compared to an average of 20 days in the other G20 countries. Furthermore, the time spent in Brazil to resolve tax matters is 2,600 hours, while in other countries, the average does not exceed 347 hours.

Another relevant item to Brazilian entrepreneurs is the access to funding. About half of entrepreneurs (43%) says they have difficulty to getting financing. On the other hand, 80% of local entrepreneurs perceive improvement in support of entrepreneurship in the last three years through government programs and associations, against 53% of the same opinion in other G20 countries.

Access to finance is a major global priority

Access to finance is cited as the main point for the action by 70% of entrepreneurs surveyed by EY, which claim that getting funding sources remains a cumbersome task even with business growth. The Barometer highlights that governments should create mechanisms and institutions to provide capital to entrepreneurs at all stages of business development, while providing essential support and mentoring for entrepreneurs to use this capital efficiently.

The United States has the best overall indices of access to finance, followed by the UK and China and a variety of developed and emerging countries listed in sequence. While in the U.S. only 15% of entrepreneurs indicate that it is difficult to gain funding; in countries like Italy and Argentina indexes reach 45 % and 40 %, respectively.

Access to financing in the early stages of the company is beginning to improve, with the United States, Canada, Australia, Saudi Arabia and Indonesia doing well in supporting the startups. More innovation is needed to increase the availability of financing for companies in the early stages, which include large corporations shifting resources to improve their own innovative processes while supporting business entrepreneurs.

Companies also benefit significantly from the relaxation of direct and indirect taxation that often turns into a burden for business. Among the entrepreneurs surveyed by EY, 83% are favorable to tax incentives for innovation in their countries. In Canada, for example, entrepreneurs can redeem up to 50% of their investment in research and development of products, regardless of profit or loss.

Creating jobs and youth unemployment

Entrepreneurs are already responsible for two thirds of jobs in the G20 countries, and represent an essential force for creating more jobs, even among the youth. In the European Union, entrepreneurs have created 67% of new jobs in 2012, in China, the proportion of jobs created by entrepreneurs in the same period reached 75%.

Mature economies are in front, but emerging markets are getting there

Across the G20, the developed countries are in the top list of the best environments for entrepreneurship. When evaluated in all five categories of the Barometer, Australia, Canada, South Korea, the United Kingdom and the United States have the best grades.

The United States leads on issues such as access to finance and entrepreneurial culture, while France has the best scenery in education and training. However, emerging countries are reducing the distance and being quicker to make the necessary reforms to improve the "ecosystem" of entrepreneurship. Saudi Arabia is the most attractive from the point of view of taxes on entrepreneurship and simple rules for the sector. In the final "pillar", coordinated support, including mentoring and business networking, Russia is at the top, followed by Mexico and Brazil.

A call to action for governments

Beside financial improvements, there is a clear message of entrepreneurs for a cultural change that would end the stigma of bankruptcy, exalt entrepreneurship, promote collective thinking on public policy and business environments and coordinate support from the public, private and voluntary.

American entrepreneurs have a relatively low fear of failure, 43% of them, in fact, see the business failure as a learning opportunity. In the G20 countries, who has this view about bankruptcy totaling 23%, on average.

Source: Literal Link
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