Entrepreneurship as a National Security Initiative

Entrepreneurship as a National Security Initiative April 24, 2009 Richard Boly, National Security Affairs Fellow, Hoover Institution [email_address]

- Entrepreneurship & terrorism: two sides of the same coin - Context matters - Fatalism vs. self-determination - Entrepreneurship IN Government (an aside) - A case study of a replicable model for nurturing elements of the entrepreneurial ecosystem - Lots crammed into a short talk What to expect:

“ Whether individuals follow the formal rules legislated by governments will depend to a large extent on the alignment between formal rules and informal norms of conduct.”

Sautet, Frédéric. "The Role of Institutions in Entrepreneurship: Implications for Development Policy." Mercatus Policy Series Policy Primer , February 2005. norms laws & regulations norms laws & regulations “ non-virtuous entrepreneurship” e.g. Mafia, Camorra, 'Ndrangheta, terrorism “ virtuous entrepreneurship” e.g. Silicon Valley, United Way, Craigs List

Terrorists’ University Degree Source: Gambetta, D. and Hertog, S., “Engineers of Jihad” Sociology Working Papers, University of Oxford 2007 (404 members, 30 nationalities, 9 large groups)

Does Success Depend on Forces Outside Our Control? Source: Pew Global Attitudes Survey, Oct. 2007

The Sea Star & the Spider The Apache & the Inca The Starfish and the Spider , Brafman, O. and Beckstrom, R. 2006 (Aside)

- Building the elements of an entrepreneurial ecosystem is possible.

The United States leads in bottom-up, market-based creation of high growth, new companies.

U.S. embassies are well suited as honest brokers to promote the growth of indigenous entrepreneurial ecosystems networked to U.S. counterparts.

Promoting entrepreneurship abroad focuses on fulfillment of the American dream and is good public diplomacy.

Assumptions/Empirical Questions:

Entrepreneurial vs. Bureaucratic Capitalism Entrepreneurial Capitalism - Schumpeter’s “creative destruction” - Messy, bottom-up, unplanned - Private actors create new venture ecosystem - Government creates positive policy framework Bureaucratic Capitalism - National champions - Centralized, top down, negotiated industrial policies - Job preservation, not job creation - Sacrifice growth for stability - E.g. Failure of EU’s Lisbon Agenda

Source: Carl Schramm, “Building Entrepreneurial Economies,” Foreign Affairs , July 2004

Move research to market

Grow risk capital markets

Spur innovation by strengthening the Intellectual Property Rights (IPR) regime

- Create and promote Italian entrepreneurial role models

Case Study: U.S. Mission Italy’s Partnership for Growth Building the “New Venture Ecosystem”

Move Research to Market

National Science Foundation Fellow

Two-day visit by Stanford President Hennessy

- Italian Academics for Entrepreneurship

Exchanges for university tech transfer officers

Biotech guru road show

Life sciences exchange project (NIH, Pittsburg Life Sciences Greenhouse)

Italian Academics for Entrepreneurship Raffaele Oriani LUISS Guido Chiarotti SISSA Stefano Fantoni Director, SISSA Alberto Di Minin Sant’Anna Francesco Sacco Bocconi Paolo Cremonesi Milan Politecnico Leo Miglio Milan Bicocca Stefano Zambon U. of Ferrara Max Bergami ALMA Graduate School Paolo Milani U. of Milan Ruggero Frezza U. of Padova Chiara Franzoni Turin Politecnico Rosa Grimaldi U. of Bologna Roberto Guerrieri U. of Bologna Manlio Del Giudice UNISOB, Naples Alessandro Sannino U. of Lecce Ferruccio Fiordispin SIAF Volterra

Angel investor exchange

U.S. entrepreneurs-in-residence

- Keynote speech at biennial Italian Venture Capital Association global meeting

Conference on venture capital with Columbia, Harvard, Stanford, and INSEAD alumni

Pitching session for 20 Italian start ups with Silicon Valley VCs

Established Italian Angels for Growth

VentureCamp and TechGarage

Conference on improving the regulatory framework for VC and angel investing

Grow Risk Capital Markets

Spur Innovation by strengthening the Intellectual Property Rights (IPR) regime

Demystifying the patent process (webinar)

Kauffman Foundation iBridge

Conference on the Bayh-Dole Act

IPR conference with Italian magistrates and U.S. Patent and Trademark Office, Department of Justice

- Ministerial conference on IPR protection with the Foreign Minster and Minister of Economy

WIPO/CRUI conference

Does Success Depend on Forces Outside Our Control?

Create and Promote Italian Entrepreneurial Role Models

Face2Face: Capturing Creativity (40-episode

webinar series)

First Generation Network

Mind the Bridge (business plan competition focusing on entrepreneurs already in the workforce)

Fulbright BEST Silicon Valley Immersion Program

Day-long Entrepreneurs’ Summit at the Ambassador’s Residence

Università di Torino Università di Genova Università di Bolzano Università di Padova Politecnico di Milano Università di Brescia Suor Orsola Benincasa Università del Sannio Università La Sapienza Università Tor Vergata Università Roma Tre Luiss Università Face2Face: Capturing Creativity Università II di Napoli Università di Camerino Università della Calabria Università di Lecce Università di Trento Università Bocconi Università di Firenze Università di Pisa Scuola S. Anna Participating Universities Università di Catania Università di Pavia Università di Ferrara ALMA Graduate School Politecnica delle Marche Università dell’Aquila Università di Bari Università di Palermo Università di Udine Università di Milano, Bicocca

President Bush Meets with First Generation Entrepreneurs, Fulbright BEST Scholars June 13, 2008, Rome, Italy

Institutionalizing and Spinning Out: A Sustainable Future for the P4G Partnership Summit, May 20, 2008, Venice Ambassador Ronald Spogli 15 Partner Organizations 300 Policy Makers, Entrepreneurs, and Media

Terrorist Kidnappings + Killings Per Capita (excluding Iraq, Afghanistan) Source: Geoff Lewis, Fortune, June 2007 Source: National Counter Terrorism Center, 2007 Report 15 29 51 (Entrepreneurial Rank out of 53 Countries) 46