In the Wall Street Journal of 28th Aug ’06, came across an Op-Ed comment on Innovation and Europe (“Innovation, innovation, innovation” by Ann Mettler, Director of Lisbon Council, a Brussels-based think tank).
It echoed a lot of thoughts and comments I have heard in various discussions on this topic. Some excerpts:
“When recently asked what his top priorities were for his country’s European Union presidency, Finnish Prime Minister Matti Vanhanen had jus three words to day: “Innovation, innovation, innovation”. A collective nod went through Europe, a continent that never tires of pledging to build a knowledge-based economy, a place where politicians incessantly talk up entrepreneurship and risk-taking…”
“Innovation European-style, on the other hand can be summed up as follows: We like the buzz of the word innovation, and we certainly want the prosperity and growth that usually comes with it. But in reality, we prefer to keep everything exactly the way it always has been. And because innovation is such a fuzzy and complex phenomenon, we thought we could attain it by simplifying it to a formula – 3% of gross domestic product spent on research and development equals innovation” and drill our officials to repeat it with prayer-like conviction. Amen.”
Complex it certainly is- but no one would argue that a large (and often overlooked) factor in this “formula” is the quality of education – particularly in schools.
So its no surprise that the article praises the Finnish school system which underwent comprehensive reforms through the 90s to move from a position slightly better than OECD average to being the top-performer in the achievement tests today.
The article pointed out that Europe spends only about half as much per college student as the US does). As I was reading it, I remembered this front-page story from the Daily Mail published just two days before (Aug 26th ’06), “Thousands of children fail to reach English and maths targets” …and remembered Boris Johnson’s lament in the Daily Telegraph, the same week, on falling interest in Science and Technology amongst University students in Britain.
So will the EU have to depend on immigrant students and researchers to make up the shortfall in science and engineering graduates? And does this have any implications for innovation? What happens if/when these researchers/ scientists decide to go back to their countries of origin…when opportunities as well as standards of living, both increase to a point where a reverse brain drain* begins? What implications does this have for national competitiveness?
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*See this interview of, David Heenan author of “Flight Capital: The Alarming Exodus of America’s Best and Brightest” for some more thoughts on this.
September 1st, 2006
Posted by
Shantanu |
Globalization, Immigration |
3 comments
Yesterday. I finally managed to have a look at Ben Casnocha’s blog. Ben has impressive credentials. Although very young (under 20!), he has already founded a company, been an entrepreneur & CEO and is currently working on a book. He writes engagingly on a variety of themes – one of his favourite is “Globalization”.
While browsing through his writings, I came across this. Ben quotes from a recent Financial Times article that lamented the loss of craftsmen and skilled artisans across Europe – symbolised in the profile of “Thierry Millet, a Paris-based umbrella repairman. Millet mends 8,000-10,000 umbrellas a year. His business is struggling because umbrellas are cheaper than ever (manufactured overseas) and people are choosing to throw them out and buy new ones instead of sending them in for repair.”
Thierry Millet blames “globalization” for his dwindling business.
It reminded me of a recent TIME cover story, provocatively titled “Italy vs. China”. It contrasted the plight of Italy’s struggling craftsmen and designers of premier goods (in a specific case mentioned in the article – high end furniture) with increasingly sophisticated Chinese manufacturers. The article mentioned how entire towns that specialised in forms of craft were coming under threat in a rapidly globalizing world economy.
The magazine’s readers had differing perspectives on this: “Some readers blamed Europe’s decline on its economic inefficiencies. Others criticized Asia’s unfair labor practices”.
But few would disagree that the social security and welfare systems that exist in the West today are under threat.
As TIME reader Diego Amicable put it in his letter to the magazine: “In order to compete, Italians will have to give up the buying power and social security they are used to. Italy has been living under the delusion that the manufacture of quality chairs is rocket science. It has failed to invest in research, education and high technology. Now the reality is hitting home, and Italy will go down. The question is how far down.”
The possibility that there may be stagnation or even a decline in living standards in the West rarely finds its way in discussions – it is an emotive issue…politically sensitive and difficult to rationalise to a generation that has not faced any hardships.
Globalization will be wrenching for more than a few.
While some people still think only of “sweat shops” and cheap wages when they talk “globalization”, craftsmen like Thierry Millet are beginning to feel the pain.
Value judgements rarely influence outcomes though…and whether we like it or not, this change (and the accompanying shock) is almost inevitable.
Those of you who have read history would of course remember that a similar fate befell the artisans and weavers of India* when the industrial revolution made it possible to produce goods (in particular textiles) very, very cheaply and in enormous quantities. E.g. Nick Robins notes in this essay that “… Between 1814 and 1835, British cotton cloth exported to India rose 51 times, while imports from India fell to a quarter. During the same period, the population of Dacca (a major textile weaving centre) shrunk from 150,000 to 20,000. Even the Governor-General, William Bentinck, was forced to report that ‘the misery hardly finds parallel in the history of commerce. The bones of the cotton-weavers are bleaching the plains of India.’”
It would seem as if the wheel is coming back full circle…but is it really that simple?
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* For those of you with more than a passing interest in this subject, I would recommend this utterly fascinating historical research paper
August 22nd, 2006
Posted by
Shantanu |
Globalization |
one comment
Some interesting statistics from the Mid-Year IPO Update (June ‘06) from America’s Growth Capital
- In the first half (upto May) of 2006, there were 130 IPOs on AIM vs. 48 for the NASDAQ..”
- Against an average of 157 Technology IPOs in the US between ‘91 and 2000, the average since 2001 has been 31.
- Between 2001 and 2006 (annualized), average number of IPOs on AIM has been 177, NASDAQ average has been 93.
- US AIM IPOs (Tech and non-Tech) will this year likely exceed 10% of all IPOs on AIM.
Keep Reading…
August 10th, 2006
Posted by
Shantanu |
Globalization |
no comments
A few days ago, Iggy Bassi (a friend from Monitor Co.) very kindly sent me some excerpts from a book that he has edited with Jeremy Grant titled, Structuring European Private Equity.
In an insightful chapter on “European Venture Capital”, Iggy and co-author Vesa Jormakka (Argo Global Capital) make several interesting points.
In their introductory paragraphs, they talk about Globalization as being one of the key strategic challenges facing European VCs
The key strategic challenge for European VC funds is to recognise the current wave of global market and geopolitical trends and position themselves in a timely and innovative manner to justify sustained limited partner interest and continue supporting entrepreneurship.
They then talk about how Globalization is fundamentally altering the landscape – not just for start-ups – but for VC firms as well.
Keep Reading…
August 7th, 2006
Posted by
Shantanu |
Globalization, Venture Capital in Europe, What VCs really do |
3 comments
Two weeks ago, I spent a very interesting couple of hours at the London Business School with Prof. Gerry George and his summer school students, where I was on a panel discussing entrepreneurs and teams that we like to invest in.
After the session, I had a brief discussion with a few students on Globalization and how this was fundamentally changing the way we are looking at businesses and opportunities.
Val Agostino of eBags, who was at the session later sent me the link to this amazing article on Business 2.0 “The Mighty Micro-Multinational” by Michael Copeland:
(Business 2.0) – WHEN WORKING IN THE TROPICAL SUN BECOMES too much for Ivko Maksimovic, the lanky Serbian heads to one of the Dominican Republic’s pristine white-sand beaches… Maksimovic, 29, is the CTO of Vast.com, a startup search company based in San Francisco. He lives in the Dominican Republic because it’s warm and far from Serbia’s troubles. He works for Vast because his bosses think he’s the best person for the job, and it doesn’t matter much where he is physically as long as he has a broadband connection.
Vast launched a year ago in its present form and now employs 25 people who work across five time zones, four nations, and two continents–all of which makes it a particularly striking example of a growing breed of startup that can best be described as a micro-multinational.
I can see these kind of companies becoming the norm rather than the exception in the years to come. In the past few months alone, I have come across at least three start-ups that have operations across three continents.
Keep Reading…
July 31st, 2006
Posted by
Shantanu |
Entrepreneurship, Globalization |
3 comments
Over the last 2-3 days, I have been looking at how many blogs cover globalization as a theme…I did not find many. However, there were a few notable exceptions.
Ed Sim has a category called Globalization on his blog, Beyond VC and some interesting posts Eric Briy’s blog also has globalization as a category (although not in the context of venture capital). Nevertheless, it has some interesting posts such as this.
I also looked the Venture Capital Blogs Resource Page and checked the dozen or so VC blogs listed there – again I could not find anyone (other than Ed Sim’s blog above) which explicitly had “Globalization” as a category – although they probably would have covered it in some of their posts..
So is this just hype or are people still figuring it out? I know I am…
July 24th, 2006
Posted by
Shantanu |
Globalization |
no comments
