In an era where the role of America in the global
economy is increasingly uncertain, I believe that one of our chief and
most respected outputs will be entrepreneurism.
Fareed Zakaria’s new book
on post-American world order is a fascinating read. I won’t speak to
the political ramifications of the new world order that Zakaria
outlines, but I was struck by the one important element of America’s
lingering contribution to the world that he seems to have missed:
entrepreneurship.
American history is full of stories of great entrepreneurs. Like in
many situations, there was a strong self-selection bias. If you were
rugged and daring enough to venture across the Atlantic Ocean, you were
more likely to be willing to shake things up in society than go along
with the status quo. Walter Isaacson’s biography of Ben Franklin shows
that Franklin – the ingenious inventor, philosopher and writer – was
above all a great entreprenuer who combined practical application with
commercial instincts.
Thomas Edison, still the holder of more US
patents than any individual in history, continued in this great
tradition throughout the 19th century. Bill Gates, Steve Jobs, Michael
Dell and other modern iconic entrepreneurs continue to inspire young
entrepreneurs around the globe to pursue the art of the possible.
In recent years, the venture capital industry has tried to
institutionalize entrepreneurship and export it. By working with
different entrepreneurs in a range of industries across a range of
business cycles, VCs try to figure out the formula for entrepreneurial
success and impart those lessons on the next generation of young
Franklins and Edisons.
After 30-40 years of perfecting the recipe,
they have begun to export it beyond America’s shores. In the last
decade, VCs from Silicon Valley and Boston have jumped on airplanes and
traveled throughout Europe, Asia and beyond to instill their brand of
entrepreneurship, sponsoring venture capital funds in these regions and
localizing their company-building lessons and discipline.
China’s venture capital industry has exploded, from nothing a decade
ago to over $1.4 billion in 2007, with expectations that it will grow
tenfold in the next few years. India’s story is a similar one, with $1
billion in venture investments made in 2007. A closer look at the
firms making these investment reveals American roots. Many of the
general partners were educated in America – typically at Harvard or
Stanford.
Many of the firms contain executives that learned the art of
venture capital in America, either as VCs themselves or entrepreneurs
at VC-backed companies. And an increasingly number of firms are
sponsored or partially owned by American VCs. Kleiner Perkins,
Sequoia, Benchmark, Accel, DFJ and many other top-tier venture capital
firms have developed subsidiaries or joint ventures in Asia and Europe
to practice the art of venture capital (it’s still not yet a science!)
in those geographies.
Thus, although America’s corporate, political and military dominance
may be waning – as Zakaria reports – I would argue its entrepreneurial
influence is ascending, in an accelerated fashion.
