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Pio Manzu Award Speech: Building an Entrepreneurial Society in Italy (October 14, 2012)
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Pio Manzu Award Speech: Building an Entrepreneurial Society in Italy (October 14, 2012)


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  • 1.   The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ ________________________________________________________________________   231  Forest  Street,  Babson  Park,  MA  02457  USA  +1  (781)  239-­‐6290   Building  an  Entrepreneurial  Society  in  Italy1   Small  Business  is  the  Problem  to  be  Solved:  Growing  Businesses  are  the  Solution   Daniel  Isenberg,  Professor  of  Entrepreneurship  Practice,  Babson  Global   Executive  Director,  Babson  Entrepreneurship  Ecosystem  Project,  October  14,  2012     Three  months  ago  quite  by  coincidence,  I  discovered  that  10  of  my  former  students  from  Harvard   and  Babson  over  the  past  7  years  have  started  ventures  from  scratch  which  have  created  over  2000  jobs   and   well   over   $1   billion   in   wealth.   One   is   an   online   gaming   company   in   Latin   America,   one   is   an   outsourcing  company  in  India,  one  is  a  biotech  company  in  Israel,  one  is  a  direct  insurance  company  in   Japan  that  went  public  last  year,  and  one  is  a  media  company  in  Silicon   Valley  that  was  just  bought  by  Google  for  a  reported  $250  million.   These  examples  of  extraordinary  growth  have  all  occurred  during   the  worst  recession  we  have  seen  in  our  lifetimes,  a  recession  that  has   brought   some   of   the   world’s   biggest   economies   to   the   edge   of   bankruptcy,  and  it  is  not  over  yet.   This   extraordinary   growth   is   what   I   call   entrepreneurship:   the   creation  and  capture  of  extraordinary  value  using  brains,  and  hard  work,   often  going  against  conventional  wisdom.     This  extraordinary  value  is  being  created  at  the  very  same  time  that   our   economists   and   our   political   leaders   from   Italy   to   the   US   are   debating  fiercely  on  whether  stimulus  or  austerity,  whether  integration   or  autonomy,  will  create  prosperity.  This  extraordinary  value  creation  is  taking  place  at  the  same  time   that  leaders  from  the  Middle  East  are  all  quite  understandably  worried  about  the  looming  tidal  wave  of   joblessness,  estimated  by  some  to  reach  a  100-­‐million-­‐job  deficit  in  just  a  few  more  years.   So  it’s  ironic,  isn’t  it,  that  right  under  our  noses,  under  the  radar,  while  the  great  leaders  of  great   nations  are  expending  great  effort  to  create  growth,  these  entrepreneurs  and  thousands  like  them  are   actually   doing   it;   they   are   not   waiting,   they   are   simply   growing.   They   did   not   get   their   ideas   from   professors  or  governments  or  the  EU  or  consulting  companies  or  from  experts.    They  did  not  take  a   penny  of  public  funding.  Nor  is  anyone  of  them  from  a  wealthy  family  or  have  a  name  that  magically   opens  doors.  These  are  people  just  like  you  and  me,  just  like  the  person  sitting  next  to  you.  They  are   everyone.   These  entrepreneurial  ventures  are  surprising,  and  that  indeed  is  what  entrepreneurship  does:  it   surprises  us.     ____________     But  I  have  another  surprise,  one  that  may  make  us  feel  uncomfortable  because  it  also  goes  against   conventional  wisdom.  These  entrepreneurs  never  view  themselves  as  small.  They  never  see  themselves   as   SMEs   (small   and   medium   enterprises).   In   fact,   when   I   talk   with   them,   they   find   the   term   “small”   distasteful.   If   you   want   to   offend   them,   then   call   them   small   businesses   or   SMEs.   Rather   they   see   themselves  as  big  companies  in  the  making.  They  are  going  to  big  and  powerful  enough  to  sell  to  the  big   companies,   they   are   going   to   compete   with   the   big   companies,   and   they   are   going   to   buy   the   big   companies.  The  concept  of  small  is  anathema.  One  of  them  says,  “Think  big;  thinking  small  is  a  crime.”  I   don’t  believe  that  thinking  small  is  a  crime,  but  thinking  small  does  not  drive  growth.  Thinking  big  drives   growth.  Thinking  small  has  its  place  in  poverty  alleviation  which  is  important  of  course,  but  thinking  big   is  what  drives  economies  forward.                                                                                                                             1  Address  given  October  14,  2012  at  the  ceremony  of  the  Award  of  the  Gold  Medal  of  the  Pio  Manzu  Center,  Rimini,  Italy.  
  • 2.   The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ ________________________________________________________________________   231  Forest  Street,  Babson  Park,  MA  02457  USA  +1  (781)  239-­‐6290   I  have  heard  it  said  in  the  past  few  days  here  in  Rimini  that  small  companies  are  the  backbone  of   the  Italian  economy  and  I  have  heard  similar  statements  in  almost  every  one  of  the  20  or  so  countries  I   have   consulted   to,   including   the  US.   This   is   wrong:   Somebody   has   been   telling   you   the   wrong   thing.   Small  companies  are  not  the  backbones  of  any  economy,  and  if  they  are  then  we  are  in  bad  need  of  a   chiropractor.  Ambitiously  growing  companies  are  the  backbones  of  a  healthy  economy.  The  research  on   this  is  getting  clearer  all  the  time.  Small  companies  without  growth  are  the  problem  to  be  solved;  they   are  net  job  destroyers,  not  net  job  creators.   Let  me  repeat  that  to  be  very  clear:  small  companies  are  the  problem  to  be  solved.  We  need   growing   companies.   We   need   growing   entrepreneurs   with   big   ambitions   and   big   visions.   This   ambition,  these  big  visions,  drive  prosperity,  innovation,  and  quality  of  life.   ____________     Can  that  happen  in  Italy?  It  can  and  it  does  and  it  is  happening.  I  have  no  doubt  that  it  can  be  much   greater   and   happen   much   faster.   The   human   capital   is   here.   The   success   stories   are   here.   The   reputational  capital  is  here.  The  financial  capital  is  here:  It  takes  very  little  money  to  create  the  growing   ventures   I   am   talking   about,   if   you   unleash   the   entrepreneurial   spirit   that   runs   so   deeply.   It   takes   commitment  and  understanding,  not  money.   I  also  have  no  doubt,  that  without  these  entrepreneurs  breaking  loose,  economic  prosperity  will   remain  elusive.   I  have  been  asked  to  give  advice  to  the  Italian  leaders  and  here  are  some  suggestions  based  on  our   work  around  the  world:   1. Get   clear   about   the   difference   between   small   companies   and   entrepreneurs.   Be   clear   that   venture   growth   is   the   top   priority,   not   small   enterprise.   That   is   not   as   simple   as   it   sounds   because  it  requires  a  change  in  mindset.  Don’t  glorify  small;  celebrate  growth,  not  stagnation.   2. Help  foster  conditions  targeted  to  the  very  best,  to  the  most  talented,  the  most  ambitious,  the   hungriest  for  achievement  and  success.  If  you  serve  them  well,  everything  else  will  take  care  of   itself,  and  there  will  be  more  dignified  jobs  and  prosperity  for  all.  Entrepreneurial  achievement   is  democratizing,  and  entrepreneurship  is  the  best  equal  opportunity  employer  there  is.   3. Don’t  spoil  them:  these  entrepreneurs  know  that  easy  money  from  the  bosom  of  government  is   unhealthy  and  distorts  markets;  they  are  looking  to  prove  themselves  only  in  the  marketplace.   To   make   good   wine,   as   you   in   Italy   know   better   than   I   do,   you   need   to   stress   the   roots.   Entrepreneurship  becomes  strong  in  the  face  of  adversity  and  some  stress.     4. Removing   obstacles   is   much   more   important   than   creating   incentives.   You   have   so   much   native   entrepreneurial   spirit   that   mostly   you   need   to   get   out   of   the   way.   Mostly   you   should   invest  in  creating  a  fair  and  transparent  system,  in  and  of  itself  not  a  simple  task.  Why  not  ask   entrepreneurs  how  to  do  that;  they  will  tell  you.  Listen  to  them,  not  just  to  the  economists  and   professors.   5. Governments   cannot   and   should   not   pick   winning   companies   or   select   winning   sectors   or   winning  opportunities.  Entrepreneurs  are  good  at  sniffing  out  the  opportunities,  usually  where   the  rest  of  us  think  there  are  none,  and  if  they  are  not  yet  good  enough,  let  them  learn,  through   intelligent  trial  and  error.   6. At   the   federal   level   what   you   can   do,   in   addition   to   modeling   good   governance   and   transparency,   is   to   foster   a   culture   of   meritocracy,   increase   labor   flexibility   and   liberalize   bankruptcy   laws.   It   is   becoming   clear   from   experience   around   the   world   that   if   you   make   it   structurally  easy  to  fail,  you  will  be  amazed  at  how  many  more  will  try  to  succeed.   7. Finally,  nations  are  only  of  limited  usefulness  is  fostering  entrepreneurship  ecosystems.  Around   the  world,  entrepreneurship  occurs  in  very  geographically  concentrated  pockets.  So  encourage   the  mayors  here  of  Rimini  and  Bologna  and  elsewhere,  along  with  their  private  leaders,  local  
  • 3.   The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ ________________________________________________________________________   231  Forest  Street,  Babson  Park,  MA  02457  USA  +1  (781)  239-­‐6290   entrepreneurs  and  family  businesses,  the  universities  and  the  foundations,  to  band  together  to   foster  the  culture,  the  mindset,  the  regulations,  the  capital  system,  and  the  entrepreneurship   education.     Entrepreneurship  is  transcendent.  It  spans  the  globe’s  almost  200  nations  and  all  of  our  spoken   languages.  It  can  be  a  force  for  global  understanding,  and  even  peace,  because  entrepreneurs  around   the  world  speak  the  same  language.  Like  art  and  music  and  literature,  entrepreneurship  is  part  of  the   human  experience.  It  transcends  races,  religion,  age,  and  gender.    Victor  Hugo  once  wrote  that  there  is   no   army   as   powerful   as   an   idea   whose   time   has   come.   Entrepreneurship   is   an   idea   whose   time   has   come.   ____________________________________________________________________________________   Daniel   Isenberg   is   a   Babson   Global   professor   of   Management   Practice   and   the   founding   executive   director  of  the  Babson  Entrepreneurship  Ecosystem  Project  (BEEP),  the  global  action  research  subsidiary   of  Babson  College,  the  world  leader  in  entrepreneurship  education.    BEEP  creates  projects  around  the   world  to  foster  substantially  greater  levels  of  entrepreneurship  in  specific  regions.  For  more  information,   visit   www.entrepreneurial-­‐   and   or   contact  Dr.  Isenberg  at  Daniel  Isenberg  has  a  Ph.D.  in  social  psychology  from   Harvard  University.