Global Entrepreneurship Policy Dialogues in Washington, DC
Washington, D.C, the capital of one of the most entrepreneurial economies and home to the largest international development organizations is alive for this, Global Entrepreneurship Week. Policy events will focus, like others around the world, on the need to globally unleash a new wave of entrepreneurs.
Today, Monday November 16, the International Finance Corporation (IFC) in conjunction with the Kauffman Foundation joined this Week’s global celebration of entrepreneurship by bringing together development partners, foundations, research institutions, IFC clients and practitioners in a workshop on “Achieving Scale in Entrepreneurship.” This event focused on the entrepreneurship landscape in emerging markets. The common theme at this event was the need to support the most important drivers of economic growth – entrepreneurs who start businesses, bring technologies to the marketplace and grow their companies.
Governments have an important role in building entrepreneurial economies. When governments make things simple (easy to register new businesses, register property, etc.), it encourages more people to start their own businesses, according to Rachel Robbins, Vice President and General Counsel at the IFC. Many governments around the world have already proven that they want to empower local entrepreneurs by enacting numerous regulatory reforms. Micheal Fairbanks, Founder of the OTF Group and co-author In the River they Swim: Essays from around the World on Enterprise Solutions to Poverty, shared his experiences in studying the reforms pushed by Rwandan President Paul Kagami. Rwanda is the top reformer of business regulation, according to the latest Doing Business report. Touted as the “entrepreneur president,” Kagami implemented reforms that make it easier to start businesses, register property, protect investors, trade across borders, and access credit. According to Fairbanks, Rwanda was so successful at eliminating barriers to entrepreneurship because it avoided a paternalistic, top-down approach to reform. Instead, the government put the locus of responsibility on the entrepreneurs. The Rwandan economy today grows at an 11.2 percent rate.
In Brazil, better regulations and programs have made it easier for companies to go public, breaking the limitations to growth from the family business and tightly held company model. Marcel Malczewski, CEO of Brazilian technology company Bematech, shared his experience in scaling his business and emphasized the importance of corporate governance. Overcoming the “governance challenge” requires allowing independent members to join the board, including angel and VC investors, according to Malczewski and Dirk Schlimm, Corporate Director & Governance Consultant at Jenoir Management Consultants.
Representatives from the Obama administration expressed the administration’s interest in expanding the power of entrepreneurship around the world and in offering U.S. expertise in building entrepreneurial economies. Pradeep Ramamurthy, the Senior Director for Global Engagement of the White House's National Security Council, said that the administration wants to learn from successful entrepreneurs and build a global entrepreneurship network. He referred to the Summit on Entrepreneurship announced by the president in his June "A New Beginning" speech in Cairo as an opportunity to begin to build this powerful network. Lorraine Hariton, Special Representative for Commercial and Business Affairs at U.S. Department of State, in turn highlighted several diplomacy efforts that put entrepreneurship at the forefront, such as the Partnership for Growth at the U.S. Embassy in Italy.
Robert Litan (pictured above), Vice President for Research & Policy at the Kauffman Foundation, underscored an important backdrop of Global Entrepreneurship Week 2009: the nascent global recovery from the worst financial crisis since the Great Depression. While acknowledging that certain excesses of financial capitalism were to blame for the meltdown, he underscored that this does not warrant broad criticism of free markets as a whole – especially in regards to entrepreneurial capitalism. Litan argued that the economy needs “another entrepreneurial revolution” in order to sustain our current recovery – most of which has been funded to date by government borrowing. He cited a new Kauffman Foundation study that showed that all new U.S. job growth from 1980-2005 came from young firms, emphasizing that continued innovation and support of entrepreneurship remains key to the economic recovery and vitality.
Keynote speaker Iqbal Quadir, Founder of the GrameenPhone and Director of the MIT Legatum Center, emphasized that breaking oligarchic capitalist economies requires the dispersion of power, which can only come about if people at the bottom increase their productivity. Entrepreneurs are bringing technologies that are allowing many people to increase productivity and lift themselves up from poverty, such as the leaders of mobile telephony in developing countries. Compared to aid, these businesses address market needs, raising far more resources and increasing people’s productivity with impressive results. In so doing, new ventures achieve scale in their size and in their impact, he stated. This bottom up approach also promises to generate the momentum for policy change. According to Quadir, asking highly centralized governments to change their policies can only go so far. Empowering people and expanding opportunity through entrepreneurship generates the pressure that is key to improving governance, Quadir emphasized.
More policy discussion will take place on November 19-20 at the “Conference on Entrepreneurship and Growth” at the World Bank. Jointly sponsored by the Kauffman Foundation and the World Bank, this conference aims to explore government regulations and reforms, private sector initiatives, and financial sector developments that affect new firm creation, average firm size, and the dynamism of incumbent firms. Sessions include “Promoting Business Formalization and Growth,” “Entrepreneurial Finance,” “Promoting High-Growth Entrepreneurship” and “Migration and Entrepreneurship.” The presentations will cover developing countries, emerging markets and industrialized economies. The webcast for the event will be available on-demand to the general public after the event and of course you can check this blog for a brief summary.
We will keep you informed on Global Entrepreneurship Week policy forums around the world.