This post is part of my Thinking Like an Entrepreneur Series, where I attempt to distil my personal experiences for would-be entrepreneurs.
In the world cup football finals (soccer to my American friends) in Rio de Janeiro last summer, I witnessed the surgical precision with which the German team defeated the Argentines, led by the immensely talented Lionel Messi. Earlier, the technocratic Germans had demolished the Brazilian team, which was missing their injured star, Neymar. Messi is beautiful to watch, even on a bad day, as is Neymar, but if there was ever a demonstration that acting as a team trumps the lone wolf, here it was in all its splendor.
In building new companies or organizations it is clichéd to say, “You must operate as a team, even if hard to pull off.” Here I want to, however, point to a different sense in which entrepreneurship is, at the level of a system (perhaps at the level of a country), a team sport. The sense in which I mean this is that different parts of the entrepreneurial fabric in a location must work together to enable creativity on the ground. Of course, this should concern policymakers, but it should also concern you and me, as we try to develop our own ventures and see our creativity get expressed on the ground.
Let me give you some examples of entities that I think should work in tandem, but in most developing countries, do not.
Consider schools and corporations. Most of those concerned about school reform debate teacher attendance, parental involvement, curricular reform and the like, and this is appropriate. But, it’s not unheard of for corporations to sponsor, say, science prizes to encourage the kids to be innovative, and to act as role models for the kids. In the US, the Intel Science Talent Search competition for high school students is very prestigious, and has been around for years. Intel surely gets some branding value out of this, but more importantly, it is part of responsibility to the fabric of science education in the US.
Some corporations in the developing world have started to pay attention, but not nearly sufficiently. Perhaps more of them can start small. For example, they might sponsor a dozen or so schools and develop the mechanisms to run such a competition. I daresay their rank-and-file managers and engineers will find it energizing as well to engage with talented kids!
As a lost opportunity, it always pains me to find civil society and corporations at odds with one another, what a colossal waste of energy. Why not work together wherever there is common ground? In India, a law was passed to mandate large corporate involvement in corporate social responsibility (CSR). Now that this mandate exists, independent of one’s prior level of enthusiasm regarding the legislation, corporates should now make the most of it. Find an entity doing good social work and work with them to help them scale up their effort. There are dozens of well managed and socially minded organizations; ask me if you can’t find one! Again, it’s not hard; it’s really a mindset issue. In my work with global agribusiness companies in South East Asia (on-and-off over past decade), there were instances of us collaborating with many organizations like this. For example, we worked closely with Conservation International, a global activist organization, in promoting biodiversity and minimizing environmental damage.
Finally, lots of folks from Medellin to Mombasa and Mumbai are trying very hard to spur entrepreneurship in developing countries. But conservatism and aversion to risk-taking remains a big barrier. Of course, there are long-standing mercantile communities emanating in the developing world, for example, the storied Lebanese merchants, or the Marwaris in India, yet the rank and file of societies are incredibly risk averse; with good reason. There are few safety nets. There is no general health insurance (let alone adequate health facilities) and no unemployment benefits, so that if one embraces a risky professional life, there is nothing to fall back on. The general point here is our institutions that promote entrepreneurship must work hand-in-glove with the institutions that provide safety nets.
This will take time, but for now, if our existing entities and corporations learn to de-stigmatize the failure that inevitably comes with risk-taking, and indeed recognize and celebrate it, it will help provide a de facto employment safety net.
To see the promise of this idea, consider the counter-factual. Let me go back to my Brazilian example. The Brazilians under their last President, the charismatic Lula, promoted Bolsa Familia, a conditional cash transfer program that has rightly been celebrated in helping a quarter of Brazil’s population get out of abject poverty to subsistence. But, the next act is not clear. Bolsa Familia does not yet work well with other institutions in Brazil to help those who now have their basic needs met to get to the next level; it does not encourage them to take risks and embrace entrepreneurship.
In a similar vein, my view is that organized microfinance has done incredible work all over the world, in Bolivia, Mexico, India, Indonesia, etcetera. But the poor villagers – mostly women – that it helps have not generally moved up the economic ladder, even though they’ve improved their basic lot. Again, what is needed is for organized microfinance to develop interfaces with other institutional arrangements in society.
Both Bolsa Familia and organized microfinance would do well to work in symbiosis with institutions in their countries that promote vocational skills, so as to provide even more developmental choices to those who benefit from their services already.
A committee I currently chair for the Government of India (NITI Aayog) is trying to foster such productive inter-connectedness among the disparate pieces of the entrepreneurial ecosystem.
Entrepreneurship is a team sport, not just within the team building each enterprise, but also at the level of the institutions in a society. It is, as the Brazilians say, jogo bonito, a beautiful game that we must learn to play much better.