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Entrepreneurship Not on G8 Radar

Mark Marich

PDE staff were on hand last week for a conference to discuss the priorities of the upcoming G8 conference in Italy, including the global economic crisis. Ourreport of the event, hosted by the Centerfor Strategic & International Studies and the Italian Embassy, follows:

This July’s G8 Conferenceconvenes with a full agenda: WMD proliferation, financial policy, foreign aid andfiscal stimulus all vie for status as a headline issue. Unfortunately, a frank discussion aboutentrepreneurship risks becoming yet another casualty of the global economicdownturn and financial crisis, now dominating economic policy debate.

The Center for Strategic andInternational Studies partnered with the Italian Embassy June 17 to co-host aseries of panels,with experts invited to address key challenges facing G8 leaders in the coming conference. Panelists Tim Adams, managing director forthe Lindsey Group; Nancy Birdsall, president of the center for global development;and Arrigo Sadun, executive director of the IMF, discussed strategies the G-8leaders will likely use to address the global economic crisis.

Unfortunately, not once didthe word “entrepreneurship” enter the conversation of any of the invitedspeakers or guests. Economic policydebate remained confined to the “macro” fields of private capital flows, fiscalcrises, development banks, and the future role of the International Monetary Fund (IMF).

The meeting of globalfinancial leaders at Lecceearlier this month was similarly confined to the high ramparts ofmacroeconomics. Nowhere in their draftmemorandum, which will set the tone of future discussion by world leaders,do small businesses or innovation receive any mention.

It is preciselyduring hard times that private entrepreneurship becomes most critical to jobcreation and eventual recovery in developed and developing economies.  For over a decade entrepreneurship has gainedincreased attention from researchers and policymakers, as an engine for jobcreation in the informal sectors of low-income countries.

Entrepreneurship reached itshighest G8 profile at the 2004 Sea Island Summit. The resulting action plan, entitled “Applyingthe Power of Entrepreneurship for the Eradication of Poverty,” containedexplicit mention of grassroots development through enhanced rule of law,targeted small-business lending by development banks, and plans for an internationalconference of private-sector leaders that fall.

Not all participants of theupcoming G8 overlooked the potential of human ingenuity in the current economicclimate. Sabino Costanza, chairman ofthe March Youth G8 Conference, called openly for governments to “investin young people.”                                      

That’snot to say some G8 discussions don’t address issues crucial to the developingworld’s struggling entrepreneurs. Themeeting of development ministers, which ended last week, agreed to push forwarda drastic 50%cut in remittance commission. Studiesshow that such remittances not only fund increases in living standards, butalso funnel heavily into entrepreneurial activities.  Nancy Birdsall, president of the center forglobal development, told the CSIS panel that “remittances are perhaps the mostefficient form of North-South development funding.”

Asworld leaders search for innovative ways to alleviate poverty in hard-hitdeveloping countries, we can only hope they don’t completely discard pastinsights. Certainly there is some roombetween debates over IMF expansion, fiscal crises, and climate-friendly initiatives,for renewed discussions of entrepreneurship. True economic recovery lies not in the balance sheets of MNCs and banks,but rather on the balance sheets and innovative dreams of everyday folks on Main Street in Nairobi, Algiers, Rio, and Jakarta.

[Reported by Shawn Kilpatrick]

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