Amid all the political angst among nations on the front pages of our newspapers, economic policymaking is enjoying a peaceful period. Ahead of this year's Global Entrepreneurship Congress in Milan, we look at some of the efforts among governments to listen and learn in a mutual effort to grow economies.
What new approaches can governments implement to leverage entrepreneurs as allies for job creation and economic growth? Ministers responsible for such policies from around the world will soon gather in Milan at the Global Entrepreneurship Congress (GEC) to explore this very question. Leaders will share ideas and experiences about how to better enable entrepreneurship, new enterprise formation, and SME growth overall.
While the GEC has traditionally been a massive gathering of entrepreneurs, investors and startup support programs, participation from governments -- one of the feeders of entrepreneurial ecosystems – is on the rise. It is not clear if this is because startups are fun and dynamic or whether this awakening by decision-makers has been driven by greater awareness of the data on new firm formation and economic growth
Either way, it is welcome.
The first-of-its-kind Ministerial for the GEC will be led by Maria Contreras-Sweet, the Administrator of the U.S. Small Business Administration. As I mentioned in last week’s post, she is herself a successful entrepreneur who knows well the needs of founders of new and growing businesses. She will be joined on the podium by Federica Guidi, the Italian Minister for Economic Development, who also has extensive private sector experience having served as CEO of a global engineering firm. They will be joined by the likes of Gordan Maras, Croatia’s Minister of Entrepreneurship and Crafts, and Enrique Jacob Rocha, the President of Mexico’s new agency the National Institute of the Entrepreneur, among others.
As technology has broken barriers to connectivity around the globe, the potential for small and growing enterprises to have an outsized impact on national economies has never been greater. Governments have a renewed role to play in creating the conditions necessary for enabling today’s tech-savvy business founders to pursue new ways of bringing innovative products and services to market, both locally and globally.
The Ministerial is designed to allow Cabinet-level decision-makers a unique opportunity to side step their usual agendas with each other around issues like trade barriers, and share information about emerging best practices in domestic policymaking and programming within highly diverse entrepreneurship ecosystems. The goal is that these government leaders will return home with new ideas for spurring new firm formation and supporting small business.
While it is easier than ever to connect with people in all corners of the globe, there are still very few global forums in which the high-level officials responsible for entrepreneurship can learn from one another and, potentially, join forces in developing our one global entrepreneurship ecosystem. The value proposition of today’s existing multilateral economic forums is questionable. They may be suitable vehicles for negotiating trade deals, but not for adopting the global economic imperative of finding more effective approaches to stimulate new firm growth. This requires open source collaboration not secretive economic negotiation. All boats rise when economies generate more new firms.
While the Ministerial agenda for Milan is being set by the leading Ministers present and still be further defined by staff, here are some of the questions likely to be raised:
Government and the entrepreneurship ecosystems
What are smart ways for government to catalyze enterprise formation and growth without trampling on the chaotic nature of entrepreneurial dynamics? What processes can governments use to develop the right mix of rules, regulations and incentives to create a thriving entrepreneurship sector? Is there a government succeeding or failing in this regard?
Fostering young and growing businesses
What approaches have worked (evidenced effectiveness) and what could work in the future (policy experimentation)?
How can governments level the playing field for anyone anywhere at any time to start and grow a business that sells to anyone anywhere at any time?
How can governments promote competitive markets in which new entrants are not crowded out by large existing firms. This is a particular problem in many emerging markets where certain economic sectors, such as telecommunications remain dominated by monopolies.
The Ministerial will be led by Contreras-Sweet who since taking office in April last year has sought to expand the reach of the SBA’s services, including its flagship loan guarantee program, through for example more modern online services that pair loan seekers with lenders. One such program, LINC, is aimed at younger, tech-savvy entrepreneurs who are used to fast and simple. Through LINC, they can fill out a 20-question online form and have lenders from around country begin competing for their business.
The SME Ministerial at the GEC will likely produce more questions than answers. This should prompt governments to ask why they are not learning more from their counterparts overseas and if successful prompt others to call for similar meetings. New policy concerns are being unearthed by policymakers, researchers and entrepreneurs all the time.
For example, incentivizing crowdfunding and other financial innovations that increase the pool of startup capital while protecting against abuse, is only a recent subject of widespread interest among SME policy influencers. I have heard staffers from both the Italian and United States government lamenting their common challenge of getting their respective “Securities and Exchange Commissions” to act promptly on new rules of engagement.
Another new concern arises around how to collect better data on what is or is not working in supporting entrepreneurship and small business development – something new to most agencies of government. Still another is how to leverage trends such as the emergence of the sharing economy and the maker movement. The list of potential topics is endless.
In the case of the Ministerial at the GEC in Milan, discussions will therefore continue the next day after the SME Ministerial, at an open GEC Research + Policy Summit, with input from data experts such as EJ Reedy from the Kauffman Foundation, Joe Greewood from MaRS Data Catalyst (Canada), and Felipe Hoffa from Google Cloud. There will also be a meeting of the Startup Nations group – a collection of startup-savvy policy advisors driving the development of new policies targeted at new firm acceleration. Setting such ministerials within a broader discussion around stimulating entrepreneurship is a very healthy way to build a team atmosphere of leaders and feeders from all elements of the ecosystem, working together on a common goal.
Of course, the real value for Ministers is on the sidelines. I once spent a great deal of time organizing a parliamentary exchange. While the formal sessions were important, clearly the value proposition for the participants was after hours. Perhaps too for the Ministers coming to Milan, the most interesting conversations will be the informal story sharing around strategies with other government leaders and the over 5,000 entrepreneurs present. Whether explaining how they persuaded someone from within their ministry or agency or other branch of government to support their efforts or whether listening to how an entrepreneur would make the same sale, I hope the GEC continues to provide a forum for entrepreneurship evangelists from both the public and private sector. Government sets the rules and incentives and is just as much a part of the solution as the innovator, investor, educator or, of course, entrepreneur.
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