Government should butt out! - Economics - small business management - Brief Article

USA Today (Society for the Advancement of Education), Dec, 2001

The less that government gets involved, the more small business will thrive, maintains Phillip Phan, professor of entrepreneurship, Rensselaer Polytechnic Institute, Troy, N.Y. "If the U.S. is to learn anything from Taiwan, it's that big government should stay out of small business." In the depths of the Asian economic crisis, Taiwan announced an annual growth of four percent. That is because nearly 70% of its economy is based on small to medium enterprises.

As a business counselor for the New York State Small Business Administration and consultant to the World Bank, Phan urges less government interference with small business. In New York City, small-business owners spend 60% of their time and resources during the start-up phase clearing government regulations. If the state and Federal governments remove barriers to creativity and entrepreneurial drive--such as unnecessary licensing, fees, and permits--more people will consider starting businesses, he argues. As a result, local economies will thrive.

"The U.S. technological boom is being driven by entrepreneurship," Phan indicates. "One thing the government did right was to change the Telecommunications Act in 1996. By doing so, the government sent the message that it was serious about freeing the individual to pursue technological innovation without fear."

However, this is only the beginning and is not enough. "The U.S. has pockets of incredible entrepreneurial activity like the Silicon Valley [in California], but we also have former industrial cities, such as Troy, N.Y., or Altoona, Pa., that have been decimated. Government won't bring wealth to those areas--entrepreneurship will."