Obama’s greatest legacy may be the global entrepreneurship he sparked
Vivek Wadhwa, Fellow, Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford University
It is rare to go to a government event, especially where political leaders are speaking, in which you 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 last week. I thought it would be nothing more than a publicity vehicle for the administration. But I left extremely impressed with the dynamism and energy that it generated and the positive impact it had on the entrepreneurs who were there from the United States and the developing world.
This was the seventh annual GES. The first, which was 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 scope has since been expanded to include entrepreneurs from all communities.
Government efforts to promote entrepreneurship always fail because they focus on building science parks and top-down clusters. Policy makers 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. And then entrepreneurs need to be educated and provided with mentoring, inspiration and seed funding. This is exactly what the GES is doing — by design or by accident.
The highlight of the Stanford event was the president on stage with Facebook chief executive Mark Zuckerberg. Obama interviewed 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 having governments remove roadblocks. He also lectured entrepreneurs on how to pitch their start-ups to investors.
In the United States, we have the American Dream; 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 (PK) Gulati told me about how rapidly policies changed after the 2012 GES, which was held in Dubai. There were many legal obstacles to e-commerce and Internet start-ups that were not getting resolved. On the sidelines of GES, enabled by the 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 has one of the most vibrant entrepreneurship communities in 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, said GES had 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 having a U.S. 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 United States, Modi even persuaded Obama to hold the next GES in India.
U.S. Chief Technology Officer Megan Smith, whom I have known since the days she was working on moonshots at the secretive Google X labs, said that after spending time in Kenya, Uganda, Senegal and Nigeria, she learned the potential of uplifting entrepreneurs. She believes that this is the best way to boost these nations’ economies. Smith said that after she joined government, she also realized the opportunity to lift up American entrepreneurs, particularly those in the country’s rural parts. This is why she has been working on globalizing Silicon Valley’s best practices “to provide them with the resources and networks for funding, talent, partnerships, peers and more so they can grow their ideas, iterate and scale.”
The program Obama 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 facilitating entrepreneurship across the globe.