In many places, business is viewed
as the enemy and people who own and run businesses as evil and greedy.
Negative attitudes are reflected in bureaucracies formed to control
business, and heavy taxation aimed at penalizing businesses for being
profitable. Not surprisingly, these places don't see much entrepreneurial
activity.
The difference in attitudes can be observed a number of ways. First
is the attitude toward failure. In some families, cities, regions
or countries, business failure is seen as dishonor to the family.
People who have tried and failed are ostracized by family and friends
and face a lifetime of social stigma. Such economies find few people
willing to take the risk of starting a business.
In other areas, failure is seen as acceptable. People who are willing
to risk personal security and wealth are actually admired -- even
if they fail. Their family accepts them, employers view their experiences
as valuable and are eager to hire them for the insight gained from
the negative experience. In the hotbeds of entrepreneurial activity
in the United States, failure is viewed as the first level of their
education. Employers actually seek them out.
A second difference stems from a culture of freedom and property rights.
In my travels abroad, I have observed that the thing that makes the
United States so desirable for entrepreneurs is the capital market.
People are free to invest in almost any venture. There are institutions
that connect entrepreneurs with people who have money to invest. Tax
rates allow people to save enough money that they are willing to risk
a piece of it on a new, risky venture. People can do with their money
what they wish and do not have heavy-handed rules and restrictions.
In many countries, an entrepreneur without sufficient capital cannot
start a business unless she/he is connected with a powerful family.
Tax rates may be so high that unless the business does spectacularly
well, it is not worth the risk. Even worse, if an entrepreneur does
do well, she/he becomes a target for corrupt bureaucrats, con artists
and extortionists. Kidnapping for ransom is a common occurrence in
some countries. Aggressive protection of property rights is essential
to a culture that wants entrepreneurial activity.
Finally, the educational system is also key to supporting entrepreneurial
activity. If the education system seeks conformity as its objective,
entrepreneurs do not flourish. If the education system encourages
innovative thinking and disagreement, entrepreneurs are created.
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Some of the
best teachers I know have an interactive style. They will occasionally
argue with students even if they agree with the student's answer,
because they know that the process of arriving at the answer is more
important than the answer itself. They feel success when the student
feels confident enough in his/her analysis and logic to aggressively
argue back. But in some cultures, students would never argue with
a professor. They sit silently and absorb the presented material and
never learn to think and act for themselves.
Unfortunately in business, there are few absolute
answers. Rather, the answers keep changing over time. Absorbing current
wisdom without challenge may make a person unwilling to do anything
that flies in the face of it.
To be successful, entrepreneurs must have the
courage and confidence to defy conventional wisdom, the freedom to
do what they need to do and social support if they fail. |
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