Updated: 8/15/2007; 1:10:23 PM

Dispatches from the Frontier
Musings on Entrepreneurship and Innovation

daily link  Tuesday, October 26, 2004

Policy Theory and Entrepreneurial Fact

Presumably, ranking states according to a formulation of a "policy environment for entrepreneurship" is intended to be predictive.  At a minimum, it's not unreasonable to expect that the theories underlying such rankings would help us understand actual entrepreneurial experience.

Hmm...

I received the 2004 edition of the Inc. 500 this afternoon.  The following is a list of the states with the highest number of Inc. 500 companies per capita.  At the very least, such experience-based data is suggestive of a pretty healthy entrepreneurial environment:

1. Utah (28)
2. Virginia (15)
3. Delaware (23)
4. Colorado (9)
5. Massachusetts (41)
6. Montana (38)
7. Tennessee (16)
8. Washington (4)
    Maryland (21)
10. Arizona (17)

The numbers in the parentheses are the 2004 rankings of those states according to the Small Business Survival Index.  At first blush, there doesn't seem to be a correlation.

Costs matter.  Taxes matter.  Regulatory barriers matter.  But, they aren't the only factors that matter.  Furthermore, costs - viewed in isolation - don't tell us much.  If tax revenues are invested in public goods such as education and transportation systems, and if regulations reduce economic externalities and help facilitate effective markets, it's at least possible that taxpayers in Utah, Delaware, and Maryland might actually be getting a pretty good entrepreneurial bang for their tax buck.

I don't think I'll base a prescriptive entrepreneurial ranking on that assumption, though.

Related: Ranking Entrepreneurial Environments

 
9:40:20 PM permalink 


If You Can Survive, You Shall Succeed

In a review (registration required) of His Excellency George Washington , New York Times writer Michiko Kakutani writes:

What remains surprising about the narrative of Washington's life is the supremely ordinary nature of his virtues. He was not a military genius: Mr. Ellis notes that "he lost more battles than he won; indeed, he lost more battles than any victorious general in modern history." He possessed neither the wisdom of Benjamin Franklin, the intellectual sophistication of Thomas Jefferson, the effusive charm of John Adams nor the political instincts of James Madison. What Washington did possess in spades was ambition, stamina and the dogged ability to learn from his mistakes. He realized during the French and Indian War and later at Valley Forge, Mr. Ellis writes, that if you can survive, "you shall succeed." (emphasis added)

Washington was neither a brilliant military strategist nor inspired tactician.  His genius lay in his ability to hold his army together long enough to draw France back into the war and win the battle that ultimately counted.

As with Washington, many a successful entrepreneur has retrospectively been accorded genius.  Genius can help, to be sure.  I suspect, though, that fortitude and adaptiveness are more common ingredients of entrepreneurial success, even in the face of repeated, ultimately temporary, failures.  In the end, I find that inspirational.  I'm not likely to become a genius.  However, I can certainly be stubborn, and the notion of learning how to be a better learner seems within reach.

Related: The Source of Entrepreneurial Genius

 
8:50:59 AM permalink 


Copyright 2007 © W. David Bayless