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June 28, 2004
Entrepreneurship and Global Economic Development: The Missing Piece
Carl Schramm of the Kauffman Foundation has written an article for Foreign Affairs in which he advocates more focus on entrepreneurship in the global economic development puzzle.
"The United States, using its own direct-aid programs and its influence over development agencies, has encouraged other nations to adopt the features and institutions of post-Cold War American capitalism. But this approach -- the so-called Washington consensus -- has often yielded disappointing results. Many economies in Latin America, eastern Europe, and elsewhere are stagnant or backsliding, and most of the world's poorest economies show few signs of new life. Going forward, the American economic model should not be abandoned, as some development economists advocate, but it must be improved. The current template is incomplete. In particular, it fails to reproduce a vital element of the U.S. economy: support for entrepreneurship."
There should be three main areas of attention in such an effort, I believe. First, governmental regulations that stifle entrepreneurial activity in these countries must be eliminated. This includes the lengthy process of "licensing" these businesses that entrepreneurs face in many developing countries. At times, this can become the requirement of bribes and other payments to gain approval to operate.
Second, business education needs to focus on entrepreneurship. And it needs to be available and accessible by a wide population. For example, in South Africa most entrepreneurship education either takes place in the community as adult education or in two year schools where people learn a trade and then go out to start their own business.
Third, and definitely the most challenging area, is culture and society's view of entrepreneurship. Even in developed countries such as Germany and England, entrepreneurship is not a part of the cultural core like it is in the US. My friend from England, John Thompson, a professor who has written a very successful book on entrepreneurship talks about it in such a fundamentally different way. He talks about the need to drill deep within the countryside to find potential entrepreneurs, give them confidence and knowledge, and convince them that this is a noble profession. Certainly this is a very different experience than mine. I feel some days, like I have to beat off the potential entrepreneurs calling on me with a stick! Changing culture takes a long time. But the first two areas of attention, education and government policy, can both go a long way to changing culture over time.
Posted June 28, 2004 10:03 AM
Comments
Jeff,
You make excellent points, especially the third one.
Here in the States we take for granted how capitalistic and business-focused our society is. We forget that other societies don't find business as fascinating, enjoyable, stimulating or motivating as Americans do as a society.
It seems that just about everyone I know is an entrepreneur, is married to an entrepreneur, is a part-time entrepreneur with a business on the side, has been an entrepreneur at some time, or dreams of becoming an entrepreneur. We constantly talk about business, think about business, mix business with recreation -- now that I think about it, business tends to dominate the lives of those in my circle.
Most people in other countries find that very difficult to fathom. They probably think we are desperate, foolish or just plain nuts. Ha ha ha.
Just wanted to also say that I enjoy your blog very much.
Best,
Anita
Posted by: Anita Campbell at July 8, 2004 08:16 PM
Thanks, Anita. You are right--we do take a lot for granted sometimes. We are living in amazing times in this country!
Jeff
Posted by: Jeff at July 9, 2004 07:11 AM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
