Speaking in New York, Mr Mandelson said he wanted Britain's response to business failure to become more like America's, and criticised banks and investors for being reluctant to take risks on new ventures.
Mr Mandelson admitted that changing the culture in this country would take 10 years, but said the Government was determined to encourage "serial entrepreneurs".
He promised to examine regulatory systems to ensure they did not deter businessmen, and questioned whether the bankruptcy laws created confidence in enterprise and commerce.
"I think we need fundamentally to reassess our attitude towards business failure. Rather than condemning it and discouraging anyone from risking failure we need to encourage entrepreneurs to take further risks,", he told the British American Chamber of Commerce.
Mr Mandelson suggested that investors in the US were more prepared to support businessmen with one or more failures under their belt, because they recognised the experience that had been gained. In Britain, creditors were much more wary.
He promised that the Government would seek to remove barriers to financing flexible accommodation, enlightened treatment by the taxman and unnecessary red tape. "We must build an economy that matches the productive strength and vibrancy of the United States," he said.
The Trade Secretary also pledged to create an environment in which businesses could learn more effectively from each other, saying "there is too great a gulf between the best and the average".
He will visit Pfizer, makers of the anti-impotence drug Viagra, during a five-day visit to the US that will also include a trip to Silicon Valley.