Monthly Archives: November 2017

The complexity of innovation policies – the example of Malaysia

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I was lucky to meet last week two economists from the International Monetary Fund who are the authors of the working paper The Leap of the Tiger: How Malaysia Can Escape the Middle-Income Trap. It is not directly linked to high-tech innovation and I am not an economist; my expertise is limied to the nano-economics of start-ups. This being said, I was very impressed by the analysis of Reda Cherif and Fuad Hasanov.

In general, I read more about developed countries and high-tech entrepreneurship, Silicon Valley, obviously, but also the example of Israel, Finland, France, Chile… Lerner, Saxenian and Mazzucato have been important authors for me. Hasanov and Cherif explain how Malaysia tried to develop its economy and relatively failed compared to Taiwan and Korea. The reasons are complex and the interested person should read their paper.

They really show the complexity of things and again the recipe needs so much fine tuning, with no guarantee of success. The addition of Chile, Thailand and Norway in their analysis, makes it really rich. I understood that a combination of strong state support (incentives, funding, sometimes protection) and competition in the private sector (so many Korean automotive firms were initially created) with an emphasis on its ability to export is very striking. Why did Nokia succeeded for some time and not Alcatel maybe explained with their arguments. They also put a lot of emphasis in the ability to innovate, a must to enable exportations.

So Mazzucato is right, the state has an entrepreneurial role, but individual initiatives seem to be also important, something I had not necessarily understood in the cased of Taiwan and Korea. The diaspora of engineers who studied and work abroad (in the USA mostly) was instrumental to the economic development and innovation once they came back (sometimes many years later) in their home country…

Where the Small-Town American Dream Lives On

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“As America’s rural communities stagnate, what can we learn from one that hasn’t?” is the subtitle of Our Town by Larissa MacQuhar in the Nov 13, 2017 paper edition of the New Yorker. The online title is Where the Small-Town American Dream Lives On. It is a strange and fascinating analysis of America. (By the way in the same edition, you can also read The Patriot a critic of the collected nonfiction of Philip Roth, another enlightening explanation of what American-ness is.


The Chamber of Commerce in orange City, Iowa. Photograph by Brian Finke.

Towards the end of this 10-page article, the author writes: In his 1970 book, “Exit, Voice, and Loyalty,” the economist Albert O. Hirschman described different ways of expressing discontent. Your can exit – stop buying a product, leave town. Or you can use voice – complain to the manufacturer, stay and try to change the place you live in. The easier it is to exit, the less likely it is that a problem will be fixed. That’s why the centripetal pull of Orange City was not just a conservative force; it could be a powerfully dynamic one as well. After all, it wasn’t those who fled the town who could push it onward, politically or economically -it was the ones who loved it enough to stay, or to come back.
Americans, Hirschman wrote, have always preferred “the neatness of exit over the messiness and heartbreak of voice.” Discontented Europeans staged revolutions; Americans moved on. “the curious conformism of Americans, noted by observers ever since Tocqueville, may also be explained in this fashion,” he continued. “Why raise your voice in contradiction and get yourself into trouble as long as you can always remove yourself entirely from any given environment should it become too unpleasant?”

There are many other interesting descriptions of people leaving and those staying; and of their ambitions, their motivations. I am not sure how this relates to innovation and entrepreneurship, but I remember Robert Noyce, one of Silicon Valley’s fathers with born in a small town in Iowa… and moved first to MIT for his PhD and then West.

How Do You Teach High-Tech Entrepreneurship according to Randy Komisar

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It’s the 4th time in a few days that I show the video below to people. It is rather old (dated 2004) and it is just great. A sentence I remember from the first day I watched it is the following: “I think there’s stuff you can’t possibly learn in school and I’m not even sure you can learn that on the job. There’s an entrepreneurial character. Some people have it and some people don’t. Some people may not think they have it, and they may have it. A lot of people they think they have it, and many don’t.” Here is the video and then the full transcript…

I think what can be taught, by and large, is a set of very basic skills about the various domains required for startup to succeed: finance, organizations, transactions, strategy, business models. You can get an exposure to that which can raise your entrepreneur IQ a hundred points. Because starting without that context, it could be awfully hard to understand what’s happening around you as you work in these environments let alone try to do it. I also think you can get exposure to the personality and character of entrepreneurship through the case study method in particular. You can begin to see the tortured lives that many entrepreneurs have to live in order to pursue their dreams. And you can get a sense of how that relates to your abilities to cope and to make tradeoffs in your life.

I think there’s stuff you can’t possibly learn in school and I’m not even sure you can learn that on the job. There’s an entrepreneurial character. Some people have it and some people don’t. Some people may not think they have it, and they may have it. A lot of people they think they have it, and many don’t. The entrepreneurial character is very, very comfortable with uncertainty and ambiguity. That entrepreneur character is very capable of understanding and targeting opportunities that others don’t see and is tenacious about their pursuit. At the same time, they remain permeable to know ideas and to course corrections from feedback from the market and from people who might have more experience or more insights than they’ve got. There’s a personality that works in this environment. And there’s a personality that I think is uncomfortable. And I try to explain this in particular in the classes that I teach. There is a badge of courage in being an entrepreneur. I mean, we sort of, you know, if you read the press and you read the local technology rags you know there is a real sense that entrepreneurs are a special super breed. They’re different. They create a lot of value. I love working with them.

But if you’re not an entrepreneur that’s OK too. There’s lots of other value to be created. There’s lots of other things to be “attacked” in the market place that maybe more appropriate. So I think you can learn a lot. And I think you can accelerate your ability to learn more by building a context. But I think ultimately you got to ask yourself a hard question. Am I suited for the uncertainties and ambiguities, the ups and downs, and the risks of being an entrepreneur, or am I not?

Facts, Truth, Courage…

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The word Start-up is controversial. Money, business are often the synonymous and at the time of the Paradise Papers, they do not have good press, with reason! I sometimes had to “defend” and I would still defend a world that is important … And more widely, I believe, we must fight to defend the importance of facts and a “dirty word”, truth, with courage. In a world where communication is confused with information (already at the beginning of the 20th century, Schumpeter explained that capitalism could not exist without marketing and advertising) it is important that the voices defending the facts, truth with courage be heard. For this reason, I have sometimes come out of the strict framework of technology, innovation and high-tech entrepreneurship to mention intellectuals who seem important to me. Harari, Piketty, Fleury, Stiegler, Picq.

A long introduction to mention a beautiful interview of Pascal Picq on France Inter this morning: “We must deconstruct male domination in Hollywood as elsewhere.” The link to the site in French is here. A brief excerpt: “Note: the bonobos, who are close to us, have not evolved like us. Homo sapiens is one of the most violent species towards its females, so women. The degrees of this violence vary according to time and culture. The dominant status is exercised with regard to Nature on the one hand, and women on the other hand. The behaviors of male dominance that are rooted in our human societies are the result of a behavioral evolution, and not of a natural and genetic determinism. In the bonobos, the female is dominant, the violence of the relations is mastered by the hedonic relations, and the bonobos live according to a model of gynocracy. The bonobos and the men did not have the same behavioral evolution. And I say that we can not blame our nature, as some do, in the principles of male dominance that have been imposed on humans. It is a behavioral evolution that has become embedded in agricultural societies and industrial societies. Historically, where foods or things are produced, men tend to take control of production and reproduction.”

I should have added that this interview is related to the Oscar granted last night to Agnès Varda for her career and coincidence or not, my previous article in French only – If you do not love me, I can tell you that I do not love you either – dealt with Sandrine Bonnaire, the actress of Agnes Varda in the magnificent Vagabond.

In all disciplines, scientific or not, complexity makes it difficult sometimes, not to say often, to assert truths. They seem sometime to be moving. But there are facts that one must always analyze as honestly as possible with courage and then we can come out with truths. Thanks to these intellectuals who work without dogma and help us understand the world.

And to finish on a “lighter” touch, here are two works by Obey whose artistic fight is magnificent!