It is rare to go to a government event, especially where political leaders are speaking, in which one can stay awake or be truly inspired. Indeed, I had very low expectations of President Obama’s Global Entrepreneurship Summit (GES), which was held at Stanford University in the latter half of June. I thought it would be nothing more than a publicity platform for the administration. But I left very impressed by the dynamism and energy that it generated and the positive impact it had on the entrepreneurs who were there from the US and the developing world.
This was the seventh annual GES. The first one held at the White House in 2010, was announced by Obama in Cairo in 2009 to “deepen ties between business leaders, foundations and social entrepreneurs in the United States and Muslim communities around the world”. Its ambit has since been expanded to include entrepreneurs from all creeds and communities.
Government efforts to promote entrepreneurship invariably fail because they focus on building science parks and top-down clusters. Policymakers believe that by erecting fancy buildings and providing subsidies to select industries and venture capitalists, they can create innovation hubs. This is the wrong approach. What needs to be done instead is to remove the obstacles to entrepreneurship and change the culture so that failure is accepted and experimentation is encouraged. Moreover, entrepreneurs need to be educated and provided with mentoring, inspiration and seed funding. This is exactly what the GES is doing — by design or accident.
The highlight of the Stanford event was the president sharing the stage with Facebook chief executive Mark Zuckerberg. Obama interacted with fledgling entrepreneurs from Egypt, Rwanda and Peru and caught the audience off guard by removing his jacket and joking about his inability to “wear a T-shirt like Mark for at least another six months”. Mariana Costa Checa of Peru was still in shock when she said, “I’m still trying to get over the fact that you just introduced me.” Obama talked about the importance of building networks, changing cultures and governments removing roadblocks. He also lectured entrepreneurs on how to pitch their start-ups to investors.
In the United States, we have the American Dream and we often put entrepreneurs on a pedestal. To the rest of the world, this is unimaginable, a culture shock.
United Arab Emirates-based investor Prashant Gulati told me about how rapidly policies changed after GES 2012 which was held in Dubai. Prior to the summit, there were many legal obstacles to e-commerce and Internet start-ups that were not getting resolved. On the sidelines of that GES, prompted by the US state department, the Emir of Dubai, Sheik Mohammed bin Rashid Maktum, convened a meeting of all stakeholders to remove the barriers and give priority to entrepreneurs. Four years later, Dubai hosts one of the most vibrant entrepreneurship communities of the Middle East, and one start-up, Souq.com, has achieved the status of a unicorn, with a billion-dollar valuation.
The 2013 summit in Kuala Lumpur led to the creation of the Malaysian Global Innovation & Creativity Center. Asran Dato Gazi, who heads this program, says the summit prompted their prime minister to work toward changing the country’s culture and removing regulatory obstacles to start-ups. The government also created educational and support programs, which have so far taught 15,000 entrepreneurs and incubated 150 companies.
The impact of a US president hyping entrepreneurship can also be seen in India, where prime minister Narendra Modi launched a program called Startup India to reduce regulations and fees, provide education and infrastructure and facilitate seed funding for start-ups. His focus is on lifting up disadvantaged communities and women. During his recent trip to the US, Modi even persuaded Obama to hold the next GES in India.
US chief technology officer Megan Smith, whom I have known since the days she was working on moonshots at the secretive Google X labs, says that after spending time in Kenya, Uganda, Senegal and Nigeria, she has discerned the potential of uplifting entrepreneurs. She believes this is the best way to boost national economies.
Smith says that after she joined government service, she also became aware that GES summits also suggest ways and means to lift American entrepreneurs, particularly those in the country’s rural outbacks. This is why she has been working on globalising Silicon Valley’s best practices “to provide them (other countries) with the resources and networks for funding, talent, partnerships, peers and more so they can grow their ideas, iterate and scale.”
The program President Obama has launched is timely and important. After all, the strongest weapon to shift geopolitical balances isn’t nukes or missiles any more, it’s technology. And there really is no better way of spreading American ideals and democracy than encouraging entrepreneurship around the world.
Vivek Wadhwa is a fellow at the Rock Center for Corporate Governance at Stanford University, USA