Global Entrepreneurship: January 2010 Archives

We all know China matters in a big way to the US and the world economy.

They fund much of our debt and probably hold the future of any recovery in their hands.  They produce goods for American companies at prices that make them competitive in the world market.  And they have a lot of potential consumers with growing income and wealth!

Today when I showed up at my office I was reminded in a very personal way that China matters because they are also becoming an entrepreneurial hotbed as well as an economic powerhouse.

There on my desk was a box from Prentice-Hall, which is one of my publishers.  I opened it and out tumbled five copies of a book that was in Chinese. 

"What the heck is this?," I wondered.

Upon a closer look I realized that it was my Bootstrapping textbook translated into Chinese.

While we have been sounding the alarm about the state of the entrepreneurial economy in the US, its seems that the constriction of the small business sector has created even more dire circumstances across the pond in the EU.

From the Wall Street Journal:

As important as small businesses are to the U.S. economy, the problem may be even more acute in Europe. Companies with fewer than 250 workers account for 70% of the private-sector work force in the European Union, compared with 49% in the U.S., according to EU figures.

Like the US, about 99% of employers are small businesses, but the total employment in small firms represents 67% of the EU workforce, which compares to 50% in the US (data from the US SBA and the European Commission).

The article in WSJ goes on to point out that funding for EU small businesses is even tighter than the US:

Business also relies more on banks in Europe than in the U.S. where, at least for bigger firms, capital markets are an important source of finance.

A 2009 report from the European Commission highlights the concerns EU entrepreneurs have about access to debt financing.  This survey found that access to financing -- typical bank financing -- continues to be one of their top worries.

However, there are some glimmers of hope when you dig a little deeper into the EU survey.

Although 46% of EU small businesses report a deterioration of bank lending, 70% said that they were able to get all or at least part of the bank financing they were seeking.  Only 15% said that they were fully rejected.

Times are certainly tough for small firms in the EU, with about half reporting lower profits.

But, as in the US, there is evidence that EU entrepreneurs are hunkering down and doing what they need to do to survive the recession.

(Thanks to Joe Ormont for suggesting this topic).