Cross-posted from The Economist, Dec 21, 2010
New Gold: Mining For Entrepreneurs, by Daniel Isenberg (Executive Director of the Babson Entrepreneurship Ecosystem Project, and Professor of Management Practice, Babson Global)
While the price of gold skyrockets at $1400 an ounce, far-sighted individuals in Barcelona, Spain, and Santiago, Chile, are looking to corner the market on a more renewable resource: entrepreneurship, or emprendimiento. This scarce and valuable resource drives economic growth and social development. Despite what policymakers will tell you, it is the root cause of national competitiveness, clusters, the knowledge economy, and innovation systems. Not the other way around.
With that in mind, ambitious new organizations like Start-up Chile and Barcelona Activa are mining the world's "entrepreneurial supply chain" in the belief that globally-oriented entrepreneurs will kick-start the next economic revolutions in Latin America and Europe.
In November, Start-Up Chile welcomed 25 teams of ambitious young entrepreneurs from 13 countries, including France, China, Portugal, Spain, Israel and India. "Today it is about global entrepreneurship," said founder Nicolas Shea, who returned to his native Chile from Silicon Valley to create Start-Up Chile. "Unlike countries such as Ireland or India, the Chilean diaspora is very small, so we need to accelerate with people from all around the world. "
Rather than erecting fences and legislation to exclude them, the Chilean government greeted these future immigrant-entrepreneurs with $40K grants, one-year resident visas, networking opportunities and non-financial support from a dedicated business development team. All with no strings attached. And a new project spawned by the Chilean Ministry of Economics, InnovaChile, will invest $50 million in Start-Up Chile with the aim of increasing its number of teams from 25 to 1000.
Whereas Start-Up Chile provides hard currency to would-be entrepreneurs, Barcelona Activa's "Do It In Barcelona" program provides non-financial support, such as coaching, English-language access to local resources, training, and various office and business spaces, including a venture incubator and venture-friendly temporary space. Hundreds of foreign start-ups have shown interest, and 60 current residents of Activa's venture incubator (representing one third of the total) are foreign -- mostly from Germany, US, UK, and Netherlands.
Such concentrations of entrepreneurial activity are known as "watering holes", and are exemplified by Kendall Square, Cambridge [USA]. Initiatives like the for-profit Cambridge Innovation Center are both cause and effect of the elaborate entrepreneurial ecosystem that's developed there, attracting the capital, support professionals, educators and customers that follow closely behind entrepreneurs. It's this symbiotic entrepreneurial growth that Start-Up Chile and Barcelona Activa hope to cultivate.
Channeling Schumpeter, Start-Up Chile's Shea said, "Entrepreneurship is the single most important variable in the innovation equation". And, in fact, its positive effects go far beyond innovation: many entrepreneurs moonlight as philanthropists--a la the Giving Pledge--or become public servants, like New York's Mayor Bloomberg and Chile's own President Sebastián Piñera. Others create further entrepreneurship through serial venturing, or by investing in new start-ups. And, as success breeds success, entrepreneurship becomes a self-renewing resource that fuels economic growth.