Cultural Capital for Entrepreneurs
The record number of pro-entrepreneurship legal and regulatory reforms in the past year among the economies studied by the World Bank’s Doing Business project is welcome news during a time of global economic recession. Prioritizing reforms and learning from global best practices hold enormous potential to unleash entrepreneurship. To maximize this potential, leaders must also promote a culture that embraces entrepreneurship.
Building an educated workforce and having sensible requirements for starting a business, trading across borders, paying taxes, accessing capital and commercializing innovation can all influence the rate at which people start companies. For example, after accounting for differences in per capita income across nations, countries with easier and less expensive procedures for registering new businesses have higher rates of new business creation, according to an analysis of the 2008 World Bank Group Entrepreneurship Survey.
Making things simple for entrepreneurs and getting out of the way as much as possible clearly do a lot to encourage entrepreneurship. Yet, if, for example, business failure is a stigma, too many entrepreneurs might never translate their ideas into new ventures. Culturally, entrepreneurial economies reflect a more open source risk-taking character. This intangible, cultural characteristic is very hard for leaders to stimulate. The regulatory reforms provide impetus for this change, but pro-entrepreneurship thinking must be alive not only in the private sector but also in government and educational institutions.
All of us have roles to play. Policymakers must continue to work to minimize the barriers standing between entrepreneurs and the realization of their ideas. Government can also be entrepreneurial itself. For example, the public transportation system in Bogota, Colombia has enhanced efficiency in part by reengineering passenger flow. Similar innovative, collaborative practices are improving waste management. In Curitiba, recycling initiatives are trading bus tokens, food and school supplies for trash collection in low income neighborhoods.
Academia, from universities to elementary schools, in turn must help instill the entrepreneurial mindset in youth and encourage new generations to explore entrepreneurship as a career path. Creative thinking and prudent risk-taking are no different than any other skill set; they are likely to become useless unless nurtured through education and experience. This is not currently the case in most schools – at least not in the U.S. So far, at the primary and secondary level, there is little encouragement of creativity, entrepreneurial thinking or opportunity-recognition. Policymakers should address this issue while continuing to support entrepreneurial universities. Universities play a critical and central role in transferring knowledge, ideas and cultural values from one generation to the next in all academic fields. Universities are an ideal place for young people to explore their entrepreneurial potential – and they should be viewed as catalysts for an entrepreneurial society.
The demand for more entrepreneurial thinking is there. Young people across the globe are eager to test their ideas in the marketplace. The success of Global Entrepreneurship Week is representative of this enthusiasm toward a more open culture that appreciates risk-taking. Momentum is building for this year’s celebration of global entrepreneurship, taking place November 16-22.
History makes clear that countries cannot have sustained economic development without a burst of entrepreneurial energy. Our leaders and every one of us should support entrepreneurship not only by ensuring they have access to resources, such as human and financial capital, but also by building a culture that appreciates entrepreneurship. Clearly, all of us have enormous self-interest in supporting promising individuals who have the creativity, talent and ambition to make a difference. They bring to the world great ideas, many of which translate into jobs, wealth, economic growth and opportunity for countless generations to follow.
Jonathan Ortmans is president of the Public Forum Institute, a non-partisan organization dedicated to fostering dialogue on important policy issues. In this capacity, he leads the Policy Dialogue on Entrepreneurship, focused on public policies to promote entrepreneurship in the U.S. and around the world. In addition, he serves as a senior fellow at the Kauffman Foundation.