According to an article in CFO magazine (you can find it here: http://bit.ly/hFfZcD), there are fewer public companies in the US because "the markets have become inhospitable to smaller private companies looking to raise less than $50 million." This is due to many factors, such as Sarbanes-Oxley and new order handling rules.
The Small Company Capital Formation Act of 2011, sponsored by Rep. David Schweikert (R-AZ), is designed raise the cap on Regulation A capital raises from $5 million to $50 million. This would be a step in the right direction, as it would offset some of the costs of being public.
However, it's not a cure-all. We need a completely new public market model that makes the reporting requirements and costs less onerous on the smaller companies. We have some ideas along these lines, and we'd like to hear your ideas as well.
(Thanks to Mike Miller of CFO 911 Solutions for forwarding the article)