ALTHOUGH ENTREPRENEURSHIP may, with some truth, be said to date back to the time man began trading, it’s certainly gained prominence in the business lexicon as the gospel according to capitalism. In particular, capitalism, American style. New age entrepreneurs are individuals with creativity, talent and ambition — but mainly, people with the passion to pursue their dreams. And their by-product is capital. Survival, however, depends, on a Darwinian determination: “It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.”
Still, all species need a nurturing environment to survive and thrive and modern entrepreneurship owes its success to another capitalist virtue — an ecosystem with quality research institutions, role models and consistent mentoring, the creation of intellectual property and, most importantly, the availability of risk (venture) capital.
There is no better example of this accretion of ideation, mentoring and nurturing of entrepreneurial talent than Silicon Valley. Always aspired to but never replicated in its entirety by many regions of the world, this sliver of land represents much more than a geographical location — it’s actually a state of mind. A seminar held recently at Stanford, co-sponsored by the Hoover Institution and the Kauffman Foundation, took today’s challenging times into perspective.
Titled ‘The How and Why of Promoting Entrepreneurship Abroad’, the principle underpinning it has been that it is in the USA’s interest to promote entrepreneurship abroad and that US diplomatic missions provide a good platform for such an initiative. The seminar featured former US Secretaries of State George Schultz and Condoleezza Rice, leading economists, former US ambassadors, foreign-born entrepreneurs who have succeeded in the US and other actors in the new venture ecosystem.
Organised by career diplomat and senior national security affairs fellow at the Hoover Institution, Richard Boly, who had helped implement a similar entrepreneurial initiative while on a diplomatic mission in Italy, the idea was to promote a similar programme in other countries. “The idea was not just to promote this as a bureaucratic initiative, but rather to partner with entrepreneurship- driven organisations like TiE, the Kauffman Foundation and Endeavor and leverage local resources to add value to the entrepreneurial ecosystem. The needs could be different in each country,” explains Boly.
US ambassador to Italy Ron Spogli who is an advisor to the Freeman Spogli Institute at Stanford and who had joined forces with Boly to promote the Italian initiative, concurs with Boly’s view. “Wherever there is a desire for greater economic growth, to develop new business models and enhance the ability of young people to realise their economic dreams, we thought we could add value. It was not that we were imparting lessons to people, but we were suggesting that many of the elements — that have given rise to our ability to be successful and become known as the country with the greatest process of innovation — may work in other parts of the world.“
Attendees also addressed the question of whether it was important to promote the Silicon Valley model of entrepreneurship with the world in the grip of an economic crisis. Condoleezza Rice, who was, until recently, America’s top diplomat, said, “It is an incredibly important time to promote entrepreneurship. Entrepreneurship requires optimism; this is required in today’s times. It also requires creativity, innovation, and a belief that one person can make a difference.“
SHE ALSO answered one of the major criticisms, that a particular part of capitalism — financial engineering — had brought the global economy to this point. “Well, you can’t help but admire what entrepreneurs do. They weren’t a part of that, and we have to defend capitalism because the private sector spurs growth that believes in low taxes, low regulations and free trade so people can work across boundaries, growth that believes that the best and the brightest ought come from around the world to work together. That’s the model that has produced unprecedented growth for a long time and we shouldn’t throw that model out.”
Another question addressed by the attendees was why the US has been at the forefront of providing aid and infrastructure loans to many developing economies where local implementation has met with little success. The point discussed was whether spreading entrepreneurship in emerging countries in addition to aid and loans could prove more effective.
According to economist George Schultz, “Entrepreneurship is exciting to the people who are doing it. We see it here in Silicon Valley where we have people coming from around the world to do great things. It seems natural to me to help introduce this idea to other people. It’s a good way of helping other economies flourish. One of the things we have all learned is: the better everybody else does, the better we do. Success gets imitated and the State Department can play a role in facilitating this process.”
Charles E Phillips, President of Oracle, said, “The perception of capitalism and entrepreneurship may be out of favour now, but it never really is. People who understand the economy know that it is the life-blood of what we do. The government cannot create jobs, it can facilitate. It is the entrepreneurs who do. Looking back at the previous recessions, great companies like Oracle and Microsoft came out of it. I think it is human nature that, given the opportunity, a stable environment, the right set of tools, capital and incentives, they like to work with it and thrive.
Abraham Lincoln had once said, “I don’t believe in a law to prevent a man from getting rich; it would do more harm than good. So while we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else.” It was this equality of initiative that this conference was trying to export.
But perhaps the most important lesson was the one not stated. Across most developed and emerging economies of the world, there is a cultural impediment in that if one tries and fails at something, the action is branded a lost case. But in the Silicon Valley ecosystem, failure simply adds to the learning curve of the entrepreneur — it’s merely a stepping-stone for the next adventure. This attribute may well be an enabler for new economies as their people too try to thrive in the brave new world of entrepreneurship.