Regulatory climate sets the stage
The situation can change only when the regulatory climate turns decidedly conducive to business. Entrepreneurship is fostered in an environment that enables the entrepreneur to create, run, manage and close a business without hassles, while the regulatory system guarantees him easy compliance, rule of law and protection of property—physical and intellectual.
The UN Conference on Trade and Development (Unctad), which recently brought out its Entrepreneurship Policy Framework and Implementation Guidance, says the regulatory environment should encourage people to set up own business, try new business ideas and take on calculated risks, while keeping administrative burdens to the bare minimum to support public policy and sustainable development objectives.
Imposing a heavy regulatory burden on the private sector harms entrepreneurship development. The Doing Business rankings show that some of the most entrepreneurial and competitive economies (such as Singapore, New Zealand and Canada) impose the least administrative requirements on start-ups. Countries that impose more onerous administrative requirements on firms and where the cost of registration is higher typically show much lower rates of entrepreneurial activity, Unctad points out.
Excessive administrative barriers or lack of transparency about the requirements entrepreneurs have to fulfil can have significant adverse effects on the society. When starting
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