Sunday, November 2, 2008

"If you have fire in the belly, you go to the U.S."

"The American entrepreneur has a passion for the market,” says Keith Blakely, founder and CEO of Nanodynamics, a pioneer in the revolutionary field of nanotechnology. While European fundamental research can sometimes be superior, American innovation is usually first to market. In the American vision, an idea is good only when the market buys it. Again, it’s a democratic view of the purpose of innovation. This explains the unique relationship in the United States between universities and business. In Western Europe, professors and entrepreneurs seldom talk to one another; in fact, to do so is often regarded as a breach of etiquette. In America, Nanodynamics uses university equipment, consults university professors, and shares its discoveries with universities.

Beyond the democratic principle, another engine is at work within these companies, one that existed on a much smaller scale in the early nineteenth century: what Harvard economist Joseph Schumpeter dubbed “creative destruction” in 1942. Schumpeter meant that the new constantly replaces the old and that the market reallocates resources accordingly. Nanodynamics has offices in a former Ford plant in Buffalo, in the heart of the Rust Belt: low-skill jobs have been replaced with high-skill, better-paying ones. In Yorktown Heights, IBM survived several waves of creative destruction and now prospers by following Schumpeter’s principle internally: the company has sold its personal-computer division to a Chinese firm and now focuses on customer service and developing sophisticated systems.

Finally, there is American cultural diversity (which was not a factor in Jacksonian or Tocquevillian America). Wherever you come from, if you have fire in the belly, you go to the U.S., says Ajay Royyuru, who left India and eventually became manager of IBM’s computational biology center. Does Suvankar Sengupta of Nanodynamics feel nostalgic about Bengal? “As a land of opportunities,” he says, “the U.S. remains unchallenged, while you are never criticized for taking risks. Moreover, when you are good at what you do, nobody in America asks you where you come from.”

“A German company is ahead of us in the market,” admits Caine Finnerty, the Nanodynamics fuel-cell expert and a former Englishman. “But we’ll eventually take over while we tackle the subject from all cultural angles with our cosmopolitan team.”

As Milton Friedman loved to say: only in America.

There are people with fire in the belly all over the world, in every country, culture, race, ethnicity and religion but whose culture and country may not value and encourage the drive and energy of the entrepreneur and innovator. America is a country founded and built by and for people with fire in the belly so it is not a surprise that the US is a destination for those whose entrepreneurial spirit cannot be fully actualized in their countries of origin. Our challenge is to craft a concept of what it means to be an American and a vision of the American Experiment that is upgraded for our 21st century realities that can inspire these immigrants who have the fire in the belly and their children and get them to buy in to this vision and identify with it. Conservatism is incapable of doing this. What we need is a fire in the belly ideology, an entrepreneurial liberalism to counter the collectivist left. If we do this then it will provide the cultural and political context within which the entrepreneurialism expressed in the quoted paragraphs above can thrive in a complex, adaptive, self-organizing society.

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