Great HBR podcast on the ways that governments can encourage entrepreneurship (http://blogs.hbr.org/cgi-bin/mt/mt-tb.cgi/7390).
The bullet point summary:
Governments can’t imitate Silicon Valley. It was the product of a very patricular set of circumstances in a particular time period. Silicon Valley probably couldn’t imitate itself again today.
The desire for Governments to create a similar entrepreneurial hotbed is commendable because it points to the acknowledgement of small growing companies and their role in contributing disproportionately to economic growth.
A healthy ecosystem for entrepreneurship must include:
- Public leadership
- Supportive regulation and policy
- Conducive social norms
- Capital availability
- Large customers willing to work with small suppliers
Many countries have strong elements of this ecosystem but few have all. Among the best countries for entrepreneurship are:
- Taiwan
- Israel
- Denmark
- Chile
- Rwanda
Regarding the effectiveness of microfinance, we need to help micro-financed businesses take a more aggressive approach allowing them to grow and expand in a big way. Large successes in entrepreneurial companies have a very important stimulating effect on the community, in the same way that Skype helped stimulate entrepreneurship in Estonia.
It can be said that the biggest mistake countries can make is looking outside of their boarders too much. Entrepreneurship is part of the human spirit and is a form of self expression in the same way art is. Governments need to encourage entrepreneurship from their people and stoke that fire. By encouraging and empowering the people these governments will see the best results.
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