New Gold Mining for Entrepreneurs


Published on

Printed on Dec 8 2010 in The Economist

Published in: Education
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

New Gold Mining for Entrepreneurs

  1. 1. The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ Entrepreneurship is the New Gold Rush: Mining a Renewable Resource Daniel Isenberg, Ph.D. Professor of Management Practice, Babson Global Executive Director, the Babson Entrepreneurship Ecosystem Project December 8, 2010 While the price of the glittering metal clanks noisily through the $1400 ceiling in London and New York, a rush to corner the market on a natural resource of a different sort is starting in Santiago, Chile, and Barcelona, Spain; not for precious metal but for precious mettle. Entrepreneurship. Emprendimiento Entrepreneurship is the scarce and valuable resource of today’s societies, driving economic growth and social development. Rather than being the result of “national competiveness,” “clusters,” the “knowledge economy,” and “innovation systems,” – policy makers’ present palavers—entrepreneurship is their root cause. Policy makers must understand entrepreneurship causes economic development, creates the foundations for sustainable clusters, and creates national and regional competitiveness and innovation; not the other way around. With that in mind, ambitious new organizations such as Start-up Chile and BarcelonaActiva are mining the world’s “entrepreneurial supply chain” to capture as much entrepreneurship as they can, with the belief that globally-oriented entrepreneurs will kick-start the next entrepreneurial revolutions in Latin America and Europe. $50 million in cold cash. In November, Start-Up Chile opened its arms to the first crop of 25 ambitious teams of young entrepreneurs from 13 countries, including France, China, Portugal, Spain, Israel, and India, with their exciting ideas in tow. According to Nicolas Shea, who came back from Silicon Valley to turn his idea for Start-Up Chile into a reality, "Today it is about global entrepreneurship. Unlike countries such as Ireland or India, the Chilean ‘Diaspora’ is very small, so we need to accelerate with people from all around the world. “ So rather than erecting fences and legislation to exclude them, the Chilean government greeted these future immigrant-entrepreneurs with $40K grants, one-year resident visas, a launch pad, networking to resources, and non-financial support from a dedicated professional business development team. All of this with no-strings attached. The new project spawned by the Ministry of Economics’ InnovaChile will ramp the number of teams from 25 to 100 and then to 1000 as Start-Up Chile, with an investment of $50 million in cold cash to rapidly seed the country’s ripe environment with a global strain of entrepreneurs. Do it in Barcelona. Whereas Start-Up Chile provides hard currency, Barcelona Activa’s “Do It In Barcelona” program reaches out to future entrepreneurial Argonauts with softer support, such as coaching, English-language access to local resources, training, and various office and business spaces, including a venture incubator and venture-friendly temporary space. Already many hundreds of foreign ________________________________________________________________________ © 2010 Daniel Isenberg +1 (781) 239-6290
  2. 2. The Babson Entrepreneurship Ecosystem Project __________________________________________________________________ start-ups have come to Barcelona to check it out, and more than 60 (one third) of Activa’s venture incubator residents, are foreign, mostly from Germany, US, UK, and Netherlands. Hoping the best of these crops will take root and even cross-pollinate the local flora, these bold experiments are consistent with my own and others’ observation that, throughout the world entrepreneurs tend to concentrate in “watering holes,” where different species of startups gain sustenance to grow and prosper. One of the best examples is the for-profit Cambridge [USA] Innovation Center where, according to co-founder Tim Rowe, 300 startup tenants are happily packed into 3 floors of a building opposite MIT. And where the entrepreneurs gather, the capital, support professionals, educators, and customers are close behind. Of course, an elaborate entrepreneurship ecosystem has evolved over decades in Kendall Square in Cambridge, and CIC is both a cause and effect. So in parallel to packing in these high potential startups, Start-up Chile and Barcelona Activa will have make sure to foment the entire ecosystem in parallel. As Start-Up Chile’s Shea starkly puts it: “Entrepreneurship is the single most important variable in the innovation equation.” In fact, entrepreneurship’s “spillovers” go far beyond innovation and even economics, as many entrepreneurs give back to society through philanthropy (a la the Giving Pledge) or public service (a la NYC’s Mayor Bloomberg and Chile’s own President Pinera). And when they succeed, entrepreneurs also like to create more and more entrepreneurship, either by serial venturing or nurturing others’ startups with advice or investment, so that success breeds success, and entrepreneurship becomes a renewable resource as well as a valuable one. As economist Schumpeter told us 70 years ago, entrepreneurship is the positive economic force that “destructs” old industries to pave way for innovation and progress. So policy makers are well advised to treat entrepreneurship as a strategic natural resource for their societies, and create ambitious programs like Barcelona Activa and Start-Up Chile that foster it. Rather than invest billions in ephemeral national innovation systems or ineffective economic cluster strategies, public leaders should be directly investing in tangible entrepreneurial resources that create lasting value. Long ago Mark Twain quipped, “Iron ore cannot be educated into gold,” nor does it need to be. The real resource, entrepreneurship, can be owned, sown, grown, and educated. So while speculators are protecting their assets by sinking them into a glittering metal, let’s remember that all that glitters is not gold, and let’s secure our futures by creating a lot more entrepreneurs. Daniel Isenberg is the founding Executive Director of the Babson Entrepreneurship Ecosystem Project and Professor of Management Practice at Babson Global. Professor Isenberg has taught at Harvard, Columbia, INSEAD, Technion, and Reykjavik. From 1987-2004 he lived in Israel and contributed to the entrepreneurial revolution there as an entrepreneur, venture capitalist, consultant, and educator. A frequent Harvard Business Review contributor, in June, 2010 Harvard Business Review featured Professor Isenberg’s “How to Start an Entrepreneurial Revolution” as the “Big Idea” lead article. His popular blogs have appeared in Forbes, Huffington Post, Economist, and Harvard Business Review Online. ________________________________________________________________________ © 2010 Daniel Isenberg +1 (781) 239-6290