Entrepreneurship as a National Security Initiative

April 24, 2009April 24, 2009Richard Boly, Richard Boly,

National Security Affairs Fellow, Hoover Institution National Security Affairs Fellow, Hoover Institution boly@hoover.stanford.eduboly@hoover.stanford.edu

- Entrepreneurship & terrorism: two sides of the same coin

- Context matters

- Fatalism vs. self-determination

- Entrepreneurship IN Government (anaside)

- A case study of a replicable model fornurturing elements of theentrepreneurial 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.

normslaws &

regulations

normslaws & regulation

s

“non-virtuous entrepreneurship” e.g. Mafia, Camorra, 'Ndrangheta, terrorism

“virtuous entrepreneurship” e.g. Silicon Valley, United Way, Craigs List

0%

5%

10%

15%

20%

25%

30%

35%

40%

Engine

erin

g

Scienc

es

Islam

ic S

tudi

es

Med

icin

e

Busine

ss/ E

cono

mics

Educ

atio

n

Other

Unkn

own

Terrorists’ University DegreeTerrorists’ 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)

0

10

20

30

40

50

60

70

80

UnitedStates

Indonesia Russia Morocco Turkey Lebanon India

Perc

ent

Yes No

Does Success Depend on Does Success Depend on Forces Outside Our Control?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

Case Study: U.S. Mission Italy’s Partnership for Growth

Building the “New Venture Ecosystem”

- 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

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 OrianiLUISS

Guido ChiarottiSISSA

Stefano FantoniDirector, SISSA

Alberto Di MininSant’Anna

Francesco SaccoBocconi

Paolo CremonesiMilan Politecnico

Leo MiglioMilanBicocca

Stefano ZambonU. of Ferrara

Max BergamiALMA Graduate School

Paolo MilaniU. of Milan

Ruggero FrezzaU. of Padova

Chiara FranzoniTurin Politecnico

Rosa GrimaldiU. of Bologna

Roberto GuerrieriU. of Bologna

Manlio Del GiudiceUNISOB, Naples

Alessandro SanninoU. of Lecce

Ferruccio FiordispinSIAF 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 theForeign Minster and Minister of Economy

- WIPO/CRUI conference

0

10

20

30

40

50

60

70

80

United States

Sweden

Britain

J apan

J ordan

Czech Republic

Malaysia

France

Israel

Mexico

ChileBrazil

South Africa

China

Poland

Turkey

Lebanon

ItalySouth Korea

India

Source: Pew Global Attitudes Survey, Oct. 2007

Per

cent

Yes No

Does Success Depend on Does Success Depend on Forces Outside Our Control?Forces Outside Our Control?

Create and Promote ItalianEntrepreneurial 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 FirenzeUniversità 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 ScholarsJune 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

0

0

0

0

0

0

0

0

Terrorist Kidnappings + Killings Per Terrorist Kidnappings + Killings Per Capita Capita (excluding Iraq, Afghanistan)(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

-Colombia, and Mexico

-Egypt, Lebanon, and Turkey

-India, Indonesia, Malaysia, Pakistan, Philippines, and Thailand

-Denmark, France, Greece, Netherlands, Spain, and Sweden

Promoting Entrepreneurial Capitalism

Some Possible Candidates Countries (not exhaustive):

Next Steps:

- Case Study of Italian Partnership for Growth

- High-Level Seminar on Promoting Entrepreneurial Economies as U.S. Foreign

Policy

Richard Boly, Richard Boly, National Security Affairs National Security Affairs Fellow, Hoover Institution Fellow, Hoover Institution boly@hoover.stanford.eduboly@hoover.stanford.edu

Thank You

Questions?