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Boosting entrepreneurship by removing barriers

July 12, 2018

min read

American entrepreneurs seeking to start up their own businesses often run into one roadblock after another. Today, it is easier to get a business license in the former Soviet republic of Estonia than in most parts of the United States.


Estonia did not always have such a bustling entrepreneurial climate. Under Soviet rule, the country stagnated and declined for decades.


“Like all of the Soviet Union, it was desperately poor. Law and order had broken down. It was chaotic,” said Richard Rahn, a distinguished economist and author who first visited the small country of 1.3 million people in the 1980s and advised President George H.W. Bush on economic matters. “What they’ve been able to accomplish is really an economic miracle.”


Estonia’s economy is geared toward technology and tourism and is one of the fastest growing countries in the European Union. In the quarter century since it emerged from the Eastern Bloc, the nation has fully embraced the digital and technological transformations for the betterment of its citizens, giving it a comparative advantage over others in the region. The software behind the popular video and voice chat app Skype originated in Estonia.


“Estonia is a perfect example for the entire world. Government with a light touch works,” said Rahn, who points to the country’s early adoption of the internet for many basic public services as a catalyst for change.


The impact is clear. While it can take weeks for entrepreneurs to get started in many states, Estonia is known for helping new businesses set up shop within an hour. Thousands of professions in the U.S. are subject to licenses in at least one jurisdiction, creating barriers to entry for those who are seeking to improve life for themselves and others.


According to the latest report from the Institute for Justice, one in four jobs in the U.S. require a license of some kind. From florists to interior designers to hair braiders, regulations and licenses impose daunting barriers to those who lack the time or resources. Koch Industries and other business leaders have spoken out in favor of licensing reform at the state and local levels, as have politicians on both sides of the aisle.


Read more about how Koch supports occupational licensing reform for all.


This story originally appeared as a Freedom to Flourish segment, sponsored by Koch Industries, on Hill.TV’s Rising with Krystal & Buck.