The Best Country to Start a Business | WSJ.com

Zoltan Acs’ work on the Global Entrepreneurship and Development Index is covered by Jeff May in the Wall Street Journal today:

What’s more, some emerging-markets powerhouses like China, Russia, Brazil and India, as well as nations like Chile and the Czech Republic, are due for big improvements, says Zoltan Acs, a Small Business Administration economist and co-author of the agency’s study of entrepreneurial performance around the world. China, for instance, ranks as just the 40th best place in the world to start a company. Yet China and its up-and-coming peers score high on forward-looking measures like expectations for job creation—so they’re likely to catch up fast with more-advanced economies.

 

 

The best country to start a business… – WSJ.com.

New Entrepreneurship Ranking of Countries | US Not the Most Entrepreneurial

In the past 5 years while working on my PhD part-time at GMU, I have been fortunate to work with some incredible professors from various fields — economics, sociology, political science, history, and higher education. Two of them, Richard Florida and Zoltan Acs, have made incredible contributions in the fields of economic development, entrepreneurship, innovation, creativity, and technology policy.

Acs, who is my dissertation adviser, has been working with Laszlo Szerb in developing a new index for understanding entrepreneurship globally: the Global Entrepreneurship and Development Index.

The Christian Science Monitor covers the recent release of the US data on the GEDI. Past measures, including new firm formation, self-employment rates, the Global Entrepreneurship Monitor’s (GEM) Total Early-phase Entrepreneurial Activity index, the Index of Economic Freedom, and others have pushed the field forward, but have not always been useful in policy making and/or economic analysis.

The new index attempts to capture the ‘contextual features of entrepreneurship.’  The framework covers a broad range of variables and importantly attempts to include qualitative differences, rather than just the traditional quantitative variables used.  Further, the GEDI includes individual variables, not just institutional variables.

From the CSMonitor:

Its Global Entrepreneurship Week!

Its that time of year again: Global Entrepreneurship Week. The organizers have done an amazing job this year and there are events all over the place. Get out and get active — there are over 5200 events that are listed on the website.

Entrepreneurship is the most powerful human activity and its great to see people celebrating, expanding and supporting it this week. Good one Kauffman Foundation and Make Your Mark for putting this together.

In addition to teaching New Venture Creation this week, I will be celebrating this week by giving a guest talk in Zoltan Acs Social Entrepreneurship Graduate Seminar at GMU’s School of Public Policy and will also be attending one of the events taking place as an ‘official’ Global Entrepreneurship Week event. I will blog and tweet that one (@campus_entre). (I am still choosing between two events, will let you know when I finalize the schedule)

Congress to Shakedown Philanthropists?

In working with Zoltan Acs and his ‘new model of American Capitalism’ and Phil Auerswald on Social Entrepreneurship, I am becoming increasingly interested in the role of philanthropists in economic growth and opportunity. Philanthropy is different from charity — philanthropists provide opportunity to others, charity provides immediate needs.

I am reminded of this more and more as I dive into the history of US higher ed with such books as Randolph’s The American College and University: A History.

An editorial at the WSJ points out a Congress Member that is planning on going after foundations in order to get more ‘public’ control over their activities. Given my growing understanding of the power that philanthropy — often through foundations — continues to play in America’s political and social development. From the WSJ: Congress Targets Philanthopy…

Like divining rods, Members of Congress are always alert to fresh sources of money, which once discovered they will spend. California Democratic Congressman Xavier Becerra thinks he’s discovered a new source of political treasure: the money inside private and community foundations.

The tax exemption foundations enjoy, says Mr. Becerra, is a “$32 billion earmark.” As he explains: “I have an obligation to make sure that those $32 billion that would have gone to the federal government are used for a . . . public good.”

This sounds like political intimidation. Unless the foundations reprogram money in the direction of Mr. Becerra’s preferences, he’ll start proceedings to dismantle their tax exemption.

Mr. Becerra and his allies, however, may want to think twice about whacking foundations. A study out this month suggests that foundations spread economic benefits more broadly through society than had been previously imagined. The research was commissioned by a new organization called the Philanthropic Collaborative and was conducted by Robert Shapiro, President Clinton’s under secretary of commerce for economic affairs, and Aparna Mathur, a fellow at the American Enterprise Institute. The Washington-based group’s goal is to persuade policy makers of the benefits of philanthropic dollars flowing to communities across the country.

For the $43 billion that foundations spent on grants in 2007, they created direct economic benefits of $368 billion. Those nonprofits that consistently outperform government programs have been saving taxpayers a bundle.

I am in the midst of a steep learning curve on the role of philanthropists in society as Zoltan ramps up work on his forthcoming book and GMU moves further into the Social Entrepreneurship field with the ChangeMakersCampus effort, active social entrepreneur networks on campus, and more coursework and research.

Many believe the rise of Gates, Skoll et al. on one extreme and Kiva.org etc. on the other extreme herald a new day for philanthropy and sustainable development globally. What are your thoughts? Also, should the government be making new policy on as the players bring in their new models, methods, and ideas?

Do Competititions & Prizes Increase Innovation?

Our buddy BrianH over at Schumpeter’s Century pointed us to an article in BusinessWeek investigating the usefulness of big money prizes, such as the X Prize, in spurring innovation.

This blog looks into the value and typology of business plan competitions that exist out there. We often wonder whether these a) are good teaching tools b) are good business planning tools and c) whether they are useful policy tools for economic growth, innovation, and education. These goals are a bit different from contests like the X prize, but similar enough to warrant investigation.

I often wonder of these are American constructs or these are human constructs. The love of competition and recognition for greatness and success?

From the BusinessWeek article by Steve LeVine,

These days, patrons are knocking on Diamandis’ door. “I don’t make the claim that incentive prizes are a panacea,” he says. But he adds that there are hundreds of billionaires on the planet. “There will come a time when you can only name so many buildings,” he says. “I won’t be surprised if over the next decade we see $100 million or $1 billion megaprizes to solve big problems. We are genetically bred to compete.”

Although his name is most associated with scientific contests today, Diamandis isn’t the first to see that money can be a powerful motivator. Prizes to determine how to measure longitude were around for 200 years before British clockmaker John Harrison solved the mystery in 1761. More recently, contests helped begin the canning industry, accelerate progress in the automotive industry, and produce the first computer to beat a chess grandmaster (Garry Kasparov in 1996). In the 20th century, government grants and corporate R&D budgets became the favored way to fund scientific advances, with contests almost dying out until Diamandis came along.

But can prize money do more than existing incentives?

The notion that wealthy philanthropists will back these contest is a pretty novel notion, especially given the research that Zoltan Acs is currently engaged in regarding the role of philanthropists in increasing opportunity in the American capitalist system.

BTW, after reading about the founder (Peter Diamandis) I wonder how does he and his organization fit into our developing notions of social entrepreneurship. Its clear that Diamandis is an entrepreneur — but is commercial space travel an important and scalable social goal? I am sure that I am not aware of the practical uses of commercialized space travel, as opposed to my assumption that it is space toursim for the Super Rich. Are we going to start sending our trash into space in order to green the planet? Will we grow food in space and then ship it back to the earth? (not good for the locally grown movement, I’d imagine or the farmers in Iowa)

The X Foundation has some more contests coming up including a few in the transportation, alternative fuel, and energy space.

Zoltan Acs Interesting Theory on American Capitalism

I attended a really intriguing talk by Zoltan Acs earlier this week where he discussed his latest research on American Capitalism. His basic thesis is that the US exhibits such high rates of entrepreneurship, innovation, and growth because of philanthropy.

Philanthropy in the US is much larger and intertwined in the US social and cultural institutions than other OECD countries. Zoltan argues that it is the mechanism of philanthropy that reconstitutes opportunity (via the wealth accumulated by US entrepreneurs) back through society. Philanthropists have used  foundations (Ford, Gates, Rockefeller) and world leading universities (ie Duke, U of C, Stanford) to improve society and expand opportunity in a variety of directions.

In most other countries it is the government that takes accumulated wealth and decides where it goes. Or elites keep wealth and live behind big walls. Or in some cases it is a combination of both. The US system that Zoltan describes appears unique.

I find Zoltan’s ideas pretty compelling and it doesn’t hurt that they fit within the frameworks of American Exceptionalism that I am making use of for my dissertation.

(I am looking for any of Zoltan’s writings on the topic and will post when I find).

(Campus) Entrepreneurship: The Next Frontier?

Early this semester (way back in January) I met with Zoltan Acs to lay out  a directed reading (independent study) in Entrepreneurship that I am completing. Zoltan recommended that I look at Frederick Jackson Turner’s Frontier Thesis on the US and see if it might fit with my research on Campus Entrepreneurship

Looks like we are not the only people making use of Turner’s ideas. On May 19, Michael S. Malone wrote an Op-Ed in the WSJ titled, “The Next American Frontier.” He too was using Turner’s ideas to offer an alternative way of understanding the rise of entrepreneurship in the US. It is a great piece.

Below is excerpt from Malone, below that is a pdf version of a ppt that I presented to my other class this semester (Advanced Qualitative Methods with Janine Wedel) in mid-April.

For three centuries the frontier had defined us, tantalized us with the perpetual chance to “light out for the territories” and start our lives over. It was the foundation of those very American notions of “federalism” and “rugged individualism.” But Americans had crossed an invisible line in history, entering a new world with a new set of rules.

What Turner couldn’t guess was that the unexplored prairie would become the uninvented new product, the unexploited new market and the untried new business plan.

The great new American frontiers proved to be those of business, science and technology.

Here is the newfrontier PPT that I presented in class. (it is broader than just Turner, but he gets some coverage — his money quote below from 1893)

Since the days when the fleet of Columbus sailed into the waters of the New World, America has been another name for opportunity, and the people of the United States have taken their tone from the incessant expansion which has not only been open but has even been forced upon them. He would be a rash prophet who should assert that the expansive character of American life has now entirely ceased. Movement has been its dominant fact, and, unless this training has no effect upon a people, the American energy will continually demand a wider field for its exercise.

As my PPT highlights, I believe the campus is the new frontier for the US; the campus is continuing to be and will more and more become the locus of innovation and entrepreneurship in the US.

Mason Entrepreneurship Research Conference

I am attending the 4th Annual Mason Entrepreneurship Research Conference (MERC) tomorrow in Fairfax, VA. The conference gets better each year (I presented year 2 on business plan competitions) and I am excited to hear Sankaran Venkataraman (keynote), Sameeksha Desai & Zoltan Acs (on ‘destructive entrepreneurship’), Scott Jackson (on Mass Healthcare Law on Entre), and Jim Wolfe (on teaching entrepreneurship). Here is the full agenda. If they have wifi there, I will try to blog some of the ‘action.’

What Is Social Entrepreneurship?

Over the past few weeks I have been having some great conversations about social entrepreneurship with Zoltan Acs, Prof. at GMU. The area is seeing a lot of activity and research inquiry. The question of what social entrepreneurship is, is far from being answered. (Acs answer is different from the one below)

Below is an excerpt from Tina Seelig’s CreativityRulz Blog. Seelig is the executive director of the Stanford Technology Ventures Program at Stanford University School of Engineering (a legendary institution in campus entrepreneurship).

So, what differentiates a social entrepreneur from a plain old vanilla entrepreneur? I must stay that it isn’t clear to me…. To loosely quote Carl Schramm, president of the Kauffman Foundation, when he spoke at Stanford last year, “all entrepreneurship is ‘social’ because at a minimum it generates jobs and stimulates the economy.” Given that as a baseline, companies can be socially responsible in an endless number of ways. If a company has family friendly policies, it is socially responsible. If a company recycles used materials and installs solar panels on the roof, it is socially responsible. If a company makes medical products that save lives, it socially responsible. If a company makes energy efficient cars, it is socially responsible. A company certainly does not have to be a not-for-profit to be socially responsible.

I would argue that people use the word “social” entrepreneurship because they don’t always know what entrepreneurship is… The way we teach it, entrepreneurship is about identifying problems and solving them by leveraging scarce resources. It means creating value, where value can be measured in a wide range of ways. It is extremely limiting is you define value only as making lots of money.