ENTREPRENEURSHIP & WELFARE STATES: A PARADOX
Our Scandinavian Beeleev’s Vice President, Rasmus Arendt Nielsen, a passionate entrepreneur with a wide experience, like co-founding start-ups in Asia and Europe, with successful outcomes, shares with us his vision of his local entrepreneurial environment. Indeed, as a Danish and part of the Board of Directors and Advisory Boards of many start-ups, in multiple fields of activity, he has a great understanding of the framework in which he is evolving.
Scandinavia: Some Facts
Scandinavia includes the countries of Norway, Sweden, Denmark and some border regions of Finland and Iceland. With their GDPs growing for the past decades and accounting to $371 billion for Norway, $514 billion for Sweden and $306 Billion for Denmark in 2016, these economies are a force to reckon with. Nordea, the biggest financial services group in the nordic countries, states that the aforementioned economies have positive outlooks and opportunities for 2018. This includes the rising business and housing development in Norway, Denmark’s economy is benefiting from a rise in employment and the Finnish economy has benefited from foreign trade and domestic demand.
The Best Welfare in the World
In Scandinavia, we are known to have the best welfare system in the world. The system, often referred to as the Scandinavian welfare model, is that all citizens have equal rights to social security and a number of services – education, health ect. – are available to citizens, free of charge. The social security system also means that all citizens are well supported economically by the government in case they don’t have an income. So, if you loose your job or if you go bankrupt with a company, the Danish government will pay you at least $1700 (and in most cases more) each month for three years. In my opinion, that is the perfect system to encourage entrepreneurship, because no matter how bad you fail, you’ll never end up on the street looking for food in the trash can.
But here comes the paradox – lets look at the graph. It is data from Global Entrepreneurship Monitor (GEM), showing the percentage of the 18-64-year population, who intended to start a business within the three years we mentioned. The data sheet compares Denmark and Norway (good social security) with Portugal, Poland, Greece and Czech Republic (poor social security). As the graph illustrates, Denmark and Norway show the lowest amount of citizens who intended to start a business within three years – despite the fact that these are the countries where the consequences of failing are the smallest.
I call it “The entrepreneurial paradox of the welfare system”