A Comparative Analysis of Small Business Development Policy in Germany, Poland, England and the United States
Abstract
This Senior Independent Project consists of an international comparison of
the manner in which Germany, Poland, England and the United States support
small business. It compares particular policy programs, while discussing the
cultural and historical reasons these programs exist and differ from one another.
My interest in this area evolves from the fact that I have been exposed to the
operations of small businesses from early childhood. I grew up with both my
parents owning a small firm. My interest expanded while traveling and
researching small business policy in Germany, Poland and England during my
study abroad experience.
The thesis is divided by country. I discuss how each government reacts to
the unique problems that the small business sector faces. I also discuss the
common elements throughout the small business community, regardless of
nationality. One of these common elements is the shift in public policy that
occurred in the early 1980's regarding small firm development. This began with
an empirical study in the United States which strongly suggested that small
businesses were a major contributor to job creation. This caused policy changes
throughout the United States and much of Europe that lead to the added support of
small business. This was especially true in England, where the election of the
conservative Thatcher administration in 1979 also helped the small business
sector. Poland seems to be an exception to this rule because of its unique
communist past. Their radical shift came in the early 1990's, when the
entrepreneur was still a new idea within the Eastern bloc.
When one realizes that deep cultural histories help to form small business
policy in each country, one can better understand why each country supports
small business at different levels. For example, traditionally in Germany, high
levels of spending exist for all social programs. This mindset is translated to a
relatively large amount of government support for small businesses within
Germany. Whereas in Poland, there is a much lower amount spent on small
business for a number of cultural and historical reasons. One of these is that the
entrepreneur is a totally new idea for Polish people and policy makers, this causes
a lack of support for the small business sector. The other reason is that the Polish
government tends to equate the small businessperson with the illegal activities of
the non-taxpaying black market. These two reasons help to explain why Poland
does not support their fledgling small business sector as much as the three other
countries studied.
England is another interesting case. They are pulled between the European
policy of spending more on social welfare programs, and the United States
historical policy of letting the individual fend for her/himself. England seems to
be somewhere in the middle of these two extremes. However, of the four
countries I studied, England's support for small business has increased most
dramatically in the last twenty years. The United States believes in supporting the
individual small businessperson, but is wary of anything bordering "socialism".
This helps to explain why the actual monetary support for small business is
relatively low in the United States, though the esteem for the small
businessperson is high. Each one of these case studies show that there is more to
supporting the small business sector than first appears.