Startup Obstacles Around the World



There will always be naysayers and obstacles to overcome when it comes to getting a startup off the ground. Many of these factors are globally universal, but many are unique to specific countries or regions and manifest in a variety of ways. To give an idea of startup obstacles around the world, here are a handful of factors and countries affected by them:

Cultural traditions

People of Japan are often community-oriented on a small scale. Entrepreneurs there are generally focused on local market services, like small businesses and shops, and business plans that have already been market-tested. Those who have innovative ideas and larger scale goals are often seen as threats to the small community’s functionality. Conversely, the entrepreneurial gusto of those who established Panasonic, Honda, and Toyota is seen as heroic, but not considered something that can be accomplished today.

In China, individuals are encouraged to seek stability in a career and lifestyle. Therefore, established, tried and true companies are desired as potential employers. Startups still exist, but cultural pressure discourages individuals from taking risks. Instead, copy-cat companies pop up, seeking to profit off previously successful business plans. However, late last year, the Chinese government set up a specialized court system for intellectual property cases in an effort to reverse this trend.

Similar to China, India’s social norms are to be risk-averse, and copycat businesses emerge frequently. Sons and daughters are encouraged to find a spouse, start a family, and provide for them with as secure of means as possible.

Availability of startup capital

For Japanese entrepreneurs, startup capital is difficult to come by. The number of venture capital firms per capita is low for a country as tech-savvy as Japan. As more precedents are established for successful Japanese startups, these firms will function more effectively as part of the venture capital ecosystem. Currently these firms are hesitant to invest in companies who have yet to reach a later stage of development.

Legal/Governmental factors

India’s business laws currently require a high income tax on startups and lengthy processes for establishing a business. A lack of framework that specifically supports startups presents a major obstacle to India’s entrepreneurs. Some experts claim that the Companies Act of 2013 is a step in the right direction, but these laws have been under scrutiny and are likely to evolve as India’s economy continues to improve.

Availability of technology

In 2013, shortly after taking office, President of Mexico Enrique Pena Nieto signed a decree that created the National Institute for Entrepreneurs. The goal of the institute is to encourage innovation among the people of Mexico. Right now, about half of the population has access to the internet and the demand is growing for better access and higher bandwidth. Mexico should expect big things when access catches up to their entrepreneurial growth.

Lack of Mentorship/talent

The Canadian startup scene is making headway in the availability of venture capital and overall, becoming a tighter knit community. Recently, the organization, Startup Canada, was founded with the goal of connecting entrepreneurs and establishing a startup culture in Canada. Their efforts are helping connect startups with resources and accelerating entrepreneurial growth. However, the startup workforce is still inexperienced and in need of mentorship. Entrepreneurs who have made mistakes can pass on the wisdom they gain after the fact.

These obstacles should not be seen as deterrents for any entrepreneurs residing in these areas. In fact, regardless of these obstacles, Hong Kong and Canada are still considered among the best places to establish startups. Instead, they should promote an understanding of the business world outside the individual and give further respect to those startups that persevere, regardless.

Image credit: CC by The U.S. Army

About the author: Reed Parker

Reed Parker is a freelance writer who loves to travel, play the banjo, and tell jokes. He got an English degree from Boise State University and enjoys writing about a variety of topics.

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