America is known as the land of opportunity. Many people have immigrated to these shores from around the world, seeking better fortunes for themselves and their descendants. One thing that has drawn immigrants and is a birthright blessing for the native-born is the ease with which hardworking individuals with brilliant ideas can start and run a business.
But why is America such a good place for entrepreneurs to start businesses?
More than any other nation, America allows fledgling companies to get a toehold in the market by exploiting a niche that the giant incumbents cannot reach. Certain factors limit established companies from choking out startups.
These factors can help a small, entrepreneurial business to take market share from complacent giants and even take over from them, resulting in greater changeover in who holds power in the US than elsewhere.
The separation of power in US governmental systems means that no governmental institution can become too powerful and potentially choke the regulatory environment for businesses. In many other nations, government red tape stifles entrepreneurship, whether motivated by protecting consumers or as a money-grabbing tactic by corrupt leaders.
In addition to legislative and administrative governance, the US has well-established legal protection for individuals and businesses. An entrepreneur has recourse to legal action if a contractor fails to uphold their end of an agreement or if their intellectual property, typically the bedrock of any entrepreneurial venture, is infringed upon. Such legal protection for business owners is often lacking in other nations.
Some amendments in the Bill of Rights are also valuable to entrepreneurs. These include the freedom of speech guaranteed by the First Amendment, the protection of confidential and sensitive business information afforded by the Fourth Amendment, and the legal protections provided by the Fifth and Sixth Amendments.
Entrepreneurs generally develop innovative, breakthrough technologies and models. However, such research and development takes time and money. Moreover, researching innovation is often dogged by failure before an invention is mature enough for the market. The cost of research can be a heavy burden on startups with limited liquidity.
However, the US government provides research and development tax credits for small businesses in many fields, and an entrepreneurial venture likely qualifies. The Small Business Administration, a government agency founded in 1953, also supports startups in other ways.
America also offers many funding sources to entrepreneurs, from traditional bank loans to venture capital and angel investment, which are often difficult to access in other nations.
The US has many excellent universities that produce highly-skilled experts in various fields, including STEM specializations. These institutions attract local talent and the cream of the immigrant population, meaning that American startups can often access the world’s top talent to drive innovation and propel them to success. Many universities now offer courses aimed at nurturing entrepreneurs, further fostering a culture of innovation in the country.
The US market is also large and diverse, with consumers having a strong voice to dictate what they want. As a result, entrepreneurs can get feedback on their products, do market research to determine where to focus next, and build strong connections with customers to establish brand loyalty.
America offers a combination of limited governmental red tape yet solid legal protection; financial incentives; easy access to funding; a deep talent pool; and a large, diverse, and vocal market. These factors work together to make the US an excellent place for entrepreneurs to found and grow their businesses.