The spirit of entrepreneurship was alive and well at last week’s Presidential Summit on Entrepreneurship. The White House took a political risk in hosting a summit on “global” entrepreneurship in a climate when so many Americans, anxious about their local economy, are easily blinded to the vital role entrepreneurs play in building the stable economies overseas essential to our growing firms back home. The summit though was a foreign policy success and a solid statement of support for the role all entrepreneurs play in creating jobs and economic growth.
Entrepreneurs have led the way to recovery from previous economic downturns by seeding new ideas and creating firms. For example, in the U.S., more than half of the companies on the 2009 Fortune 500 list were launched during a recession or bear market. The convening of the Summit and the array of announcements was therefore welcome news, and suggest that the world’s risk takers and innovative entrepreneurs are perhaps no longer thought of as mere adjunct players on the sidelines of our economies but central to their recovery.
Encouraging entrepreneurial thinking among citizens is perhaps as challenging as enacting the right policies. It demands an intangible, cultural shift that is very hard for leaders to stimulate. The Kauffman Foundation has been promoting entrepreneurial cultures around the world by creating a bottom-up push for entrepreneurialism through Global Entrepreneurship Week where each November over 32,000 concurrent events in nearly 100 countries test people’s aptitude and interest in entrepreneurialism. The young entrepreneurs who participate are deeply curious about the opportunities the marketplace offers to tackle the challenges facing the world. Young people are the greatest messengers for entrepreneur-friendly policies and with the support of Secretary of State Hillary Rodham Clinton, Global Entrepreneurship Week is nurturing their interest.
The Obama Administration’s announcements at the Summit demonstrated a commitment to advancing entrepreneurship, announcing for example a new two-way professional exchange program that will bring 100 entrepreneurs to the U.S. and, working with private sector partners to send 100 American entrepreneurs abroad. “Science & Technology Education Exchanges” will bring 25 science teachers from Muslim-majority countries and communities to examine effective methods of teaching science at primary and secondary school levels. The Overseas Private Investment Corporation’s Global Technology and Innovation Fund will make investments in start up and growth-oriented companies in telecommunications, media and technology. The Department of State’s Middle East Partnership Initiative and U.S. Small Business Administration in turn are partnering to promote small and medium enterprise growth in the Middle East and North Africa. The State Department will partner with online platforms to begin coordinating a corps of entrepreneurship mentors, the “E-Mentor Corps. USAID will undertake several initiatives to support entrepreneurship, including providing open source web and media based entrepreneurship education, supporting local educational capacity building programs, facilitating entrepreneurs’ access to private sources of finance, and expanding business innovation centers. But, there were no economic policy announcements.
The list of foreign delegates in attendance appropriately focused on the entrepreneurs and those that nurture and support them. While the President’s staff and the Cabinet were well represented on the program, for the most part, the meeting appropriately avoided the typical top down weight of linear government thinking which too often sets a “planned economy” tone in discussions at conferences on entrepreneurship. However, while entrepreneurship cannot be planned by governments, the fact that governments set the economic rules and incentives means that they can do many things to encourage change in a nation’s economic culture. Summit delegates noted the absence of government in many of the panel discussions asking for US government help in taking on the challenge of identifying barriers to entrepreneurship in their countries and replacing them with entrepreneurship-friendly policies and programs.
Asking members of the entrepreneurial diasporans from any country around the world why they chose to become entrepreneurs elsewhere could yield useful insights into the types of barriers that current policies present for new ventures. In general, in the words of Carl Schramm, “high-growth entrepreneurship emerges when the proper incentive structure is in place, when individual initiative is encouraged, and when individuals have the opportunityto engage in innovation”
Well known entrepreneur, Dr. Mohamed (Mo) Ibrahim suggested at the Summit that this was about setting rules and a legal system that fosters a competitive environment, keeps regulation under control and keeps government away from picking winners while leveraging public investment in mitigating non-market risks. Other panelists called for limited effective interventions in encouraging mentoring and lending for start ups. However, almost all speakers concluded that at the end of the day it is all about a mindset. If governments really want to see entrepreneurs flourish, the path is not hard to see. However, too often, one panelist suggested, all entrepreneurs end up with is lip service.
Such discussions led several participants in the events following the summit to wonder about what type of follow up to a Presidential summit on Entrepreneurship was most needed. Prime Minister Erdogan from Turkey has offered to host the next Global Summit on Entrepreneurship in Istanbuland clearly there is momentum for further dialogue both with the State Department and within the Muslim world. But given how important entrepreneurship is to global economic recovery,perhaps one outcome from the summit might be to include policies conducive to entrepreneurial capitalism in upcoming global economic discussions at the ministerial level such as the G20 or APEC. To focus governments on growth strategies that prompt policies and programs conducive to high growth entrepreneurship is the kind of leadership worthy of a nation built by risk-taking pioneers. As the State Department now takes the baton from the White House following this event, America might do well to remember this as it seeks to restore the image as the “shining city on the Hill”.