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August 31, 2004
Educating Entrepreneurs the European Way Just Creates More Governmental Barriers
I have noted many times in my postings that if we want to support and foster entrepreneurs, we should provide education and get the government out of the way. However, this article at StartupJournal shows that the devil is in the details.
In the U.S. we equate providing education to entrepreneurs as a relatively voluntary act. Sure, some banks may from time to time "strongly suggest" a client take a class or visit with an SBDC counselor to assure that they have thought through their plans carefully. But, generally education is a free choice. If an entrepreneur wants to have a better chance of success, we encourage education, but that is as far as we go. They are free to launch their businesses under their own terms. The market will be the judge.
However, this is not how it works in much of Europe, where the apprentice system and strict and complex licensing creates huge barriers for business formation and growth. "Germany still requires 41 professions, from well diggers to chimney sweeps, to pass exams to get a 'Meisterbrief,' or master certificate, before they start a business. Its origins go back to late-19th-century regulations under which only Meisterbrief holders could teach apprentices. When the Nazis came to power in the 1930s, they extended that rule to the self-employed." While the intent is to educate and train, the bureaucratic approach violates the second cardinal rule of fostering entrepreneurship which is to get the government out of the way.
Not only do these laws inhibit entrepreneurs in starting businesses, they limit the growth of small businesses by restricting the ability to add staff. "Across the Continent, businesses are calling for change. 'We should be able to employ people with the right skills and the wrong papers,' says Mark Andries, a labor consultant for the Flemish Employers Association in Belgium. 'Employers should be allowed and encouraged to give on-the-job training to people without degrees, but the unions don't want that.'"
There is a movement in the U.S. to certify entrepreneurship education programs. While on the surface this is not a bad idea, we must be careful not to let this become the first step in requiring all entrepreneurs to attend a certified entrepreneurship program before being granted a business license. Farfetched? Not really, when you consider that many in this movement are enamored with the "European Way." What makes our economic system so strong is the freedoms it offers. We don't need the government to take away such freedoms under the pretense of "knowing what's best for us."
Posted August 31, 2004 06:48 AM
Comments
"An exam is required to guide tours in Rome. "I've been arrested once at Trevi Fountain and twice at St. Peters for guiding tours without having a license," says an American who doesn't want to be named."
It's the same in Washington DC. I've been working as a tour guide all summer and then my company got a shock when a couple of our guides got $500 tickets for giving tours without a license. Now I'm waiting to take a test to "prove" to the DC gov't that I'm qualified to give the same tours our customers have been enjoying (and through their tips expressing their approval) all summer. But this recent crackdown on unlicensed tour guides in DC was sparked by the local tour guide association's complaints about unlicensed guides.
Posted by: phil at September 4, 2004 07:27 AM
Great post, Jeff.
Many entrepreneurs launch their own businesses precisely because they want to "do their own thing." They like to be in charge. What a shame it would be if starting your own business meant subjecting yourself to even more external restrictions than being an employee.
- Anita
Posted by: Anita Campbell at September 4, 2004 06:45 PM
I have to agree with Anita. One of the primary reasons people start their own business is to do it their own way. By requiring any type of formal training, this can hinder the imagination and creativity involved with distinguishing one's business from what is already out there.
Posted by: Melissa Greene at September 7, 2004 12:09 PM
This author clouds the certification issue by looking down the road and focusing on a negative aspect of government control that is purely speculative. This is an example of negative spin journalism, and based on the previous two comments, it seems to be working.
I think that the certification of entrepreneurship education classes is a good idea. These classes can be certified professional courses and WILL STILL REMAIN OPTIONAL. If an entrepreneur has a certified education class under her belt, then she will be more attractive to investors, loan officers, and other stakeholders.
Improving entrepreneurial education is a great opportunity for new business owners, or those wishing to instill an entrepreneurial culture in their own companies.
Posted by: George Ward at September 9, 2004 02:07 PM
After a visit to the Soviet Union many years ago I quickly became an avid reader of Soviet history and communist ideology. I attempt to think of the long term consequences of any government intervention through the perspective of their history. Unfortunately, what looks on the surface to be a benign proposal to certify (via government standards) entrepreneurs can possibly stifle the entrepreneurial spirit in years to come. As you may determine from my comments I am a strong believer in keeping government out of much of our daily lives. One of the greatest advantages we as Americans have over any other country in the world is truly our entrepreneurial spirit. I would hate to see government poke it's ever-growing nose into areas that it doesn't belong. The Soviets provide a historical argument to keep government out of the business of business. Although a much larger discussion could ensue and I am definitely oversimplifying the argument, it is clear the Soviets had government intervention in most aspects of their lives. Business certainly did not flourish in this environment. And as the Soviet Union is an extreme example of government intervention, it is certainly within the realm of possibilities that government intervention can lead to government control.
Posted by: Rebecca Burcham at September 27, 2004 08:59 PM
I could not agree more, Rebecca! And it should be a real concern that all of us keep in mind with each little step we seem to be taking toward more and more government involvement.
Posted by: Jeff Cornwall at September 28, 2004 07:23 AM
I agree that having government more involved in the role of small businesses does hurt the average small business or entrepreneur. At the same time, we see many people who come to work with little to no knowledge about what they are there to do, and furthermore, don't care. I do not think that there should be a prerequisite for being a chimney sweeper, but at the same time, I don't want someone to come sweep my chimney, but clog it up instead. There has to be a balance.
Posted by: Harry Mayo at September 29, 2004 11:41 AM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
