Opening a small business in San Francisco is still a nightmare

You don't want no-regulation in dense urban environments. But the rules are unclear, the permitting system opaque, the outcomes kind of subjective and open to too many outside interference, and the agents of the bureaucracy mostly disinterested in getting things at any sort of reasonable speed.

Like, it is probably easier for me to open a taco shop in Japan then it is in the USA, and Japan is THE land of red-tape and bureaucratic prescriptivism.

Completely off-topic, but I wonder one of the reasons why government/bureaucracy jobs in Japan tend to attract more engaged workers is the relative difficulty of bureaucracy in Japan. Imagine this: most legal documents have all the words still written in some mixture of Church Latin and French. Including giant explanatory paragraphs. Navigating this document without the aid of a trained worker (who most likely has a college degree in Church Latin and Legal French) is nigh impossible even for educated individuals and so they guide you step by step through every box and field.

But why should a license be needed to open a repair shop, dealership, a factory, a nursery etc?

Plenty of countries have just as good safety track records without the difficulty many US municipalities present while you are trying to start a business.

I think the problem with US regulations is (as far as I have encountered them) that they are descriptive of intended end-results, and not prescriptive of compliant implementation. This creates a lot of bureaucratic inefficiency at the implementation/inspection side as well as lots of ambiguity on end-results. The trade here is some measure of future-proofing and greater freedom on implementation.

Unfortunately, this ironically has created the strange mess we face today. Two reasons:

1. Enforcement is retroactive. You build it, and then it's inspected to code. If you fail code, you are work-stopped, penalized, and then ordered to rebuild to code. This forces an inordinate amount of caution and makes everyone involved risk-adverse to comical degrees. And creates, again, ambiguity.

2. Enforcement can happen after business commencement. That is, you start selling doughnuts, and THEN the Department of Water's sewage inspector shows up and finds that your plumbing isn't to some inane, inconsequential section of the code. Why did they show up so late? Well, as it turns out passing this part of the regulations isn't necessary to starting operations. Why didn't anyone stop you from City Hall? Because ... honestly they might know or care.

Ambiguous implementations with punitive consequences after the fact.

There are countries who do this the other way around. Incredibly prescriptive regulations that in-turn, can be easily checked and verified. Etc. Etc.

Does this stifle some amount of innovation? Yes. Is there forms of madness for this style? Absolutely. But from my point of view, the velocity and ease of business growth seems to favor one over the other. And it is NOT the USA's model.

The slowing of development is clearly a political tool that can be used to wield political power & favors. I'm not sure the consequences of removing that tool but it would be that. There's also a concern about budget because if the development pace keeps up enough, then queue management of outstanding orders is also a problem (although that's true today, it's a problem for developers instead of the government). It might be interesting to have statuatory pricing for scheduling inspections for specific times (e.g. if you need it by next Monday, the price is 10 000x, if you make a reservation for an inspection in 12 months, the price is 0.5x & if you reschedule there's a meaningful penalty) & having requirements that the inspection must be completed within X days of some milestone (e.g. the business being open). That way the budget problem and the development process are intertwined and self-funded without involving politics and limiting how much competitors can screw over each other.

Also, it's not all or nothing. Fire inspections are not typically the issue.

The bigger issue though is things like electrical inspections which are blockers since they have to happen before other parts of the process complete (i.e. hard to inspect electrical when the business is open and the walls are all finished).