Every Company Needs a Good Map

I have often wondered why more US companies do not make use of the economical resources of South America. That is, aside from illegal labor. The time zones are very similar. Jet lag is less of an issue and the language is not as large a barrier. It is a shorter flight in many cases and shipping is less difficult.

Then I saw the editorial, "No Room for Entrepreneurs" by Mary Anastasia O'Grady in today's Wall Street Journal  (may require a subscription). Using a combination of World Bank survey data and material from a talk by Carl Schramm who cites one of my favorite economists: Joseph Schumpeter, she exposes the real issue - fear. 

Ms. O'Grady's conclusion, and that of Schramm, is that Latin American governmental policies have been the biggest hindrance to entrepreneurial expansion. Taxes, paperwork, and corruption combine to make it very difficult to start a business.

Ms. O'Grady points out that Schumpeter worried that a lack of stability would cause governments and big businesses to undermine "Disruptive Change" that he favored. In the context of the Maslow's Hierarchy discussion, it appears that in the end, it is really fear (the lack of security) that drives much of this resistance to change. Loss of basic needs is not as much of a concern as is control, power, and wealth. Yet, more often than not, the call for protectionism, socialism, or increasing regulation uses the rallying cry of lost jobs, income, and ability to provide the basic needs by the workers in the industries that might be affected.

What local efforts have you encountered that cause the same issues locally? Could this be the reason that more of America is NOT like Silicon Valley? Do Politicians throw money at blocking access to the wrong end of the pipe?