Posts tagged with: entrepreneurship

The original Article Who’s Responding: “The Call of the Entrepreneur” in La Spezia was written by Francesco Bellotti for the Italian newspaper “Avvenire” (translation and editorial contributions from Michael Severance):

Kishore Jayabalan responds to questions in the industrial city of La Spezia

“The Christian entrepreneur is not the person who goes about wealth creation all week and then leaves a nice offering at church on Sunday. Rather, he is exemplified by the type of person who gives the best of himself to create wealth and opportunity for himself and others,” said Mr. Kishore Jayabalan, Director of the Italian office of the American think tank, Acton Institute, while introducing the premier showing of the Acton documentary “The Call of the Entrepreneur” at the Teleliguria Sud TV studios in La Spezia, Italy last February 19.

The documentary’s showing and debate on television was organized in collaboration with the Movement of Christian Workers of La Spezia before a private audience of entrepreneurs, business executives, and free-lance professionals invited from the northern Italian region of Liguria.

“No doubt there are greedy entrepreneurs, just like any other group of greedy professionals and tradesmen,” Mr. Jayabalan said. “But they are certainly not defined by this (vice).”

For the good entrepreneur, “risk-taking is born out of his trust and hope in the future. He perceives things that others do not easily see and works to build something where there is nothing.”

Continuing his reflection on the entrepreneurial vocation, Jayabalan stressed that economics is not like a game of poker.

“Economics is not zero sum game in which the rich get richer at the expense of the poor. The free market is a means by which all of man’s material needs may be satisfied.” The entrepreneur must “study his fellow men in order to better satisfying their needs. In this way, his creative work contributes to the common good. What’s more, he creates jobs while risking his very own well-being.”

To be sure, it is not this way for all entrepreneurs, but “we must know how to recognize and value such a vocation that is absolutely rich in meaning, especially in the social sense,” said Jayabalan.

When asked, how can we help support the growth of entrepreneurship, Jayabalan concluded by saying “we cannot “program or plan” for good entrepreneurs to come about. Indeed, they are persons who respond to a certain calling. But, at any rate, there are some fundamental conditions which our state institutions must guarantee to facilitate entrepreneurship, namely: respect for private property, rule of law, minimal bureaucracy, and fair taxation.”

One of the panelists at the debate, Massimo Ansaldo, an attorney and executive member of Italian Catholic business society “Compangnia delle Opere di Liguria”, said: “When thinking about it, the principle of subsidiarity must be followed, in order for us to pass on social responsibility from the state directly into the hands of the local private intermediaries, such as the family, businessmen, professional associations and cooperatives.

Gianluca Ceccarelli, an infopreneur on the discussion panel, said, “With my work, I am able to support my family. I am not interested in earning huge lumps of money, but rather reinvesting it to continually improve my state…The internet affords endless information and opportunity for growth. It is an incredible phenomenon, though we need to know how to take advantage of what it offers, otherwise we can easily lose our wealth.”

Gian Piero Marafante, an entrepreneur in attendance, gave his reactions to the documentary: “What I like most is teamwork in building up business. Often people ask me why I am so willing to share my business secrets with my colleagues. My answer is that, first off, no one can take my experience from me. But, above all, when teaching others my skills I contribute to the growth of the team and gain tremendous satisfaction from this.”

Finally, Rev. Pietro Damian of the nearby Diocese of Massa Carrara and immigrant from Bucharest, gave his personal testimony from the speaker panel: “When I arrived in Italy, I came to understand the ‘secret’ of economic development in Western countries.”

“Unlike in communist countries where the state owned everything, here people could freely develop (wealth) according to their own talent and ingenuity,” he said.

“My participations in Acton’s educational initiatives (Acton University) in the United States has enriched my knowledge and inspired my pastoral outreach to promote the values that have made our civilization great. Without faith, we risk stifling progress, even in economic terms! Instead of ideologically demonizing business, let’s inspire a rebirth of a culture that unites free enterprise with ethical responsibility, as we find its very foundation in our Christian faith.”

The Acton Institute’s Italian premier of “The Call of the Entrepreneur” in the city of La Spezia was the first of many more showings foreseen in the coming months to stimulate debate in Italy on the virtues of entrepreneurship. Soon the American think tank will travel to Verona for another showing of its documentary before members of the Union of Christian Entrepreneurs and Managers from the Italian region of Veneto.

Electronic engineer Dr. Francesco Bellotti is Professor of Industrial Research and Development for the University of Genoa.

Blog author: abradley
Wednesday, February 9, 2011
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My latest for Acton Commentary. I’m also adding a couple of videos from Hotep and the Institute for Justice.

Let the Hustlers Hustle

By Anthony Bradley

If necessity is the mother of invention, then there is nothing worse than quenching the entrepreneurial spirit of people seeking to improve their situation by imposing arbitrary third-party constraints. America’s unemployment problems linger because hustlers cannot hustle.

For many, “hustling” connotes business activity that is shady, or even illegal. But in the black community it is common to use the term to describe the entrepreneurial spirit that drives people to take risks to meet one’s needs and to provide legitimate services through creative enterprise in the marketplace. The latter view is the one taken by indie Hip-Hop mogul Hotep, who has created Hustler University as an effort to redeem hustling as a way to create space for economic empowerment. Clients include the NAACP, the Urban League, Clemson University, the National Education Association, Illinois Public Schools, and Morehouse College.

Hotep defines a “hustler” as “an enterprising person determined to succeed, [a] go-getter.” Participants in Hustler University are exposed to the idea that human beings were made to be innovative and creative and “to manifest our dreams into creation,” says Hotep. Among the Hustler’s 10 Commandments that Hotep aims to teach today’s entrepreneur are the aphorisms “your network is your networth,” “the early bird gets the worm,” and success is “where opportunity meets preparation.”

Hotep offers helpful direction, but for independent-minded hustlers to succeed and thereby benefit both themselves and their communities, they need an environment that provides them opportunities to work freely. While there are many factors that keep entrepreneurial spirit dormant such as laziness, the absence of mentors, and skill deficiencies, one of the greatest obstacles is the mass of regulations generated by federal, state, and local governments.

The Institute for Justice recently released a report describing how government regulations prevent entrepreneurs from taking off. In Houston, for example, hustling a mobile food truck business is nearly impossible. For starters, a would-be mobile food entrepreneur must obtain a license from the City of Houston Department of Health and Human Services. Potential hustlers must submit, in-person, two sets of plans that satisfy a 28-point checklist. During the government truck inspection, the vendor must provide extensive documentation including an itinerary and route list. He is required to pay $560 in fees, which includes $200 for the installation of an electronic tracking device. Operators must also disclose their menu, including every ingredient used as well as its origin, and how each dish is prepared. Even worse, a form must be filled out for each ingredient. This is just a sampling of the regulations in one city. Similarly daunting tangles of red tape exist in every jurisdiction in America, preventing entrepreneurs from starting and maintaining small businesses.

It’s clear that this regulatory regime especially hurts small businesses, the primary source of new jobs. Mark Crain, William E. Simon Professor of Political Economy at Lafayette College, conducted a study several years ago describing the disproportional burden imposed by federal regulations on small business. Crain found that firms with fewer than 20 employees spend 45 percent more per employee complying with federal regulations than do larger firms. Small firms spend 67 percent more per employee on tax compliance than larger firms do, and, compared to the largest companies, more than 4 times as much ($3200 vs. $700) per employee to comply with environmental regulations.

The black unemployment rate currently (January 2011) stands at 15.7 percent. Hispanics are a little better at 11.9, but both lag whites at 8 percent. The last thing we need are burdensome government regulations preventing hustlers from hustling. Whether intentionally job-killing or not, these types of government regulations dampen the entrepreneurial spirit of people who are trying to improve their situation and make contributions to the civic good by providing services that people need. Based on employment figures, these regulations arguably affect blacks and Hispanics disproportionately.

If America is really serious about addressing abysmal unemployment rates, federal, state, and local governments would do well to take the handcuffs off of hustlers and free them from the regulations that keep them from creating wealth. In other words, get government out of the way and let the hustlers hustle!

An interesting report in The Economist on the rise of flashy and free spending entrepreneur “gazillionaires” in India and China and how they are perceived:

In much of India, life is getting perceptibly better each year. Wealth per person has vaulted by 150% in the past decade, from $2,000 to $5,000. Many Indians think the nation’s entrepreneurs deserve some of the credit. In Dharavi, a slum outside Mumbai, an illiterate mother called Aruna sits in her tiny one-room flat, which is home to ten people. Asked how she feels about the rich, she says: “They have worked hard. And we must work hard, too.” Her eldest daughter has a job entering data at a bank. The next one is studying diligently. The family may be near the bottom of the ladder, but it sees a way up.

But this in China:

The perception that commercial success often depends on political ties makes inequality in China more galling. In the mid-1980s Chinese incomes were more evenly distributed than India’s—hardly surprising, since China was nominally communist and India is afflicted by a caste system. But now China is less equal than India, with a Gini coefficient of 0.4 to India’s 0.37. China has 800,000 dollar millionaires, but also 400m people who live on less than $2 a day.

Acton Institute Honors Richard M. DeVos with Faith and Freedom Award

GRAND RAPIDS, Mich. (Sept. 2, 2010) – Richard M. DeVos will receive Acton Institute’s Faith and Freedom Award in October for his remarkable accomplishments in business, American cultural life and philanthropy.

Rev. Robert A. Sirico, president and co-founder of the Acton Institute, cited DeVos for his “decades-long exemplary leadership in business, his dedication to the promotion of liberty, his courage in maintaining and defending the free and virtuous society, and his conviction that the roots of liberty and the morally-charged life are to be found in the eternal truths of the Judeo-Christian tradition.”

DeVos will receive the award on October 21 at Acton’s 20th Anniversary dinner in Grand Rapids. For more on the event, please visit: www.acton.org/dinner

Richard M. DeVos

Few American stories better encapsulate the value of hard work and free enterprise than that of Richard M. “Rich” DeVos. In the late 1940s, DeVos and friend Jay Van Andel became independent distributors for Nutrilite. The California manufacturer of vitamins used a person-to-person direct-selling approach that DeVos and Van Andel adopted when starting Amway from their Ada, Mich., homes in 1959. Together, they refined the direct-selling method of offering individuals the opportunity to build businesses of their own that became the model for scores of direct-selling companies and marked the start of a major worldwide direct-selling industry. Amway, a subsidiary of Alticor, now operates in more than 80 countries and territories around the world and enables more than 3 million people to own independent businesses.

DeVos and his wife, Helen, generously support hospitals, colleges and universities, arts organizations and Christian causes in their hometown of Grand Rapids, and they support numerous organizations in Central Florida. Among the many institutions they have helped create are DeVos Children’s Hospital, the Cook-DeVos Center for Health Sciences, the DeVos Communications Center at Calvin College, the DeVos Campus of Grand Valley State University, and the DeVos Place convention center. Florida contributions include the DeVos Sport Business Management Program at the University of Central Florida, and the Orlando Magic Youth Foundation. DeVos owns the Orland Magic NBA franchise.

DeVos is also an accomplished author. In his books, DeVos presents his most poignant stories and important principles. Compassionate Capitalism (1994) outlines 16 principles for integrating compassion with free enterprise. A later work inspired by DeVos’ heart transplant, Hope from My Heart (1997), imparts ten lessons for life on subjects including persistence, confidence, optimism, respect, and faith. President Gerald R. Ford hailed the book as “exciting, inspiring, and down-to-earth with God-given advice for everyone.” Ten Powerful Phrases for Positive People (2008) continues DeVos’ mission of sharing wisdom from his remarkable life experience and his philosophy.

DeVos is a graduate of Grand Rapids Christian High School and attended Calvin College in Grand Rapids. He served in the United States Air Force from 1944 to 1946. Rich and Helen DeVos, who have been married more than 60 years, have four children and 16 grandchildren.

The Faith and Freedom Award was established as part of the Acton Institute’s tenth anniversary celebration in 2000. The award recognizes an individual who exemplifies commitment to faith and freedom through outstanding leadership in civic, business, or religious life. For this award, the Institute commissioned a sculpture of Lord Acton, the Institute’s namesake, who held firmly to the two pillars of faith and freedom.

Past recipients include, with date of award: John Marks Templeton (2000); Cardinal Van Thuan (2002); Rocco Buttiglione (2004); Charles W. Colson (2006); Mart Laar (2007); and William F. Buckley (2008).

Link to news release on Acton Press page here.

This August 3 Wall Street Journal article is based on a Legatum Institute survey comparing Indian and Chinese entrepreneurship and raises important issues about the roles of the state and the family in promoting entrepreneurship.

The common elements between Indian and Chinese wealth-creators are their optimistic view of the future, compared to Americans (“Why I’m Not Hiring”) and Europeans (“Everything’s Fine With Greece, Just Ignore Some Facts”) presumably, and their lack of concern about the impact of the global financial crises on their businesses.

But Indians and Chinese differ widely on why they become entrepreneurs in the first place, where they look for capital, and whether they look to the state to support and encourage them. As the article’s subtitle puts it, “Indians believe they succeed despite the state. The Chinese say they succeed because of it.”

I draw two conclusions from the study: Those who favor freedom, creativity and self-employment seek limited government, while those who seek greater wealth for its own sake are seemingly indifferent about the size and scope of government. And greater trust in the family seems to go along with less trust of the state.

It follows that friends of freedom and the family ought to favor the Indian to the Chinese version of entrepreneurship.

This week I’m attending Mises University, one of the largest and most rigorous summer courses in the Austrian School of economics (or “reality economics,” as my friend Michael McKay likes to call it).

Among the various lectures, there was one in particular that struck me as particularly relevant to the work of the Acton Institute. Peter Klein, professor of economics at the University of Missouri, delivered a presentation on entrepreneurship, a large part of the focus of his academic work.

Dr. Klein approaches the subject of entrepreneurship from the more realistic Austrian perspective. Rather than viewing people as examples of the homo economicus, as almost robotic, quantitatively-driven machines, Dr. Klein views human beings as unique and free actors. When we act, we do so under conditions of time and uncertainty. Though every human action presupposes cause and effect, there is no guarantee that our instincts are correct or that our efforts will pay off. In this way, every one of us, whenever we choose some action, is a kind of entrepreneur. In the face of uncertainty, we have an intended – but not guaranteed – result of action.

Combine that with the Austrians’ very realist take on production: production is not some kind of abstract graphical function, but the concrete act of taking a natural resource (e.g. some wood, a stone,  some metal ore), and using one’s labor – almost investing a part of oneself – to physically transform it.

In a very broad sense, we all participate in this two-sided entrepreneurial action: actively and consciously transforming the world around us, and doing so in the face of uncertainty and imperfect knowledge.

In a much more specific sense, this activity applies to the people we would usually call entrepreneurs (Ludwig von Mises called them, “entrepreneur-promoters”). These are the businessmen we all know: the small-business owner, the investment banker, the risk-taker. These are individuals whose entrepreneurial spirit in a special way exceeds those of everyone around them. They are the ones willing to take on greater risk, confront greater uncertainty, and make more difficult decisions.

In any case, I find that this realistic description of the role of entrepreneurship fits extremely well with the theology in The Call of the Entrepreneur. In the film, we learn that the entrepreneur is a “co-creator”: He  participates in the act of transforming raw materials and natural resources into products for consumers; but the entrepreneur does so by investing time and energy into the production process. And creativity and imagination play an indispensable role in this process of co-creation.

I remember a kind of feeling of awe when this thought dawned on me during Dr. Klein’s lecture. Here we find yet another example of how the market process, when understood and employed correctly, is not simply a morally indifferent result of choice, but a morally positive thing. Society and its consumers are made better off, and both the laborer and the entrepreneur are reminded of their human dignity as they participate in God’s work of fashioning the world.

This week’s Acton Commentary from Baylor University economics professor John Pisciotta:

Americans have less confidence and trust in government today than at any time since the 1950s. This is the conclusion of the Pew Research Center survey released in mid-April. Just 22 percent expressed trust in government to deliver effective policies almost always or most of the time. With the robust expansion of the economic role of the federal government under George W. Bush and Barack Obama, the Pew poll is evidence of an opportunity for advocates of freer markets.

That Americans distrust their government is not unadulterated good news. An effective rule of law, one aspect of which is a government that can be trusted to act justly and equitably, is a necessary precondition of the free and virtuous society. Still, in the context of the extraordinary extension of government control in areas such as finance and health care, news of political skepticism offers an opportunity for those who recognize that both the moral and economic wellbeing of our nation depends more on the health of individuals, families, and other institutions than on the engineering of bureaucrats. The apostle Peter advised Christians to “always be ready to give an answer” to those who ask for “a reason of the hope that is in you” (I Pt 3:15). This advice is relevant for defenders of private sector reliance. We must not merely repeat slogans regarding private enterprise. We must express the reasons why we defend decentralized, voluntary organization of our economy over centralized control. Here are my top 10 reasons, in reverse order, for the hope that is within me.

10. Difference in competition. Competition is at work in both government and private markets, but the competition in markets is more civil and evenhanded. Business competition is similar to golf. Each competitor works to improve his own performance. Political competition—between parties, between candidates for office, and among legislators—is more like basketball. While a competitor works to elevate his own game, participants also attempt to undercut, debilitate, and intimidate opponents. It is common to see political advertising that is hostile, even to the extent of lying about the opponent. Combative ads are the exception in business appeals to consumers.

9. Enterprise expansion. In private markets, a business venture has to be profitable to expand, whereas expansion is “in the DNA” of government ventures and programs. Program beneficiaries and bureaucratic suppliers work in collaboration with elected politicians to expand particular government programs. The basic idea is this: If a government program is good, an expanded program would be even better.

(more…)

As we’ve noted before, the Planet Money team is on the ground in Haiti getting a hands-on look at the economic situation after the disaster. Today they broadcast a moving story of an entrepreneur who lost all her capital in the earthquake. Now she totes a 30+ lbs. bin of chicken necks to make a few dollars a day.

The story is a testament to the power of micro-finance, the complications of an international import operation, and the bookkeeping practices of a purveyor of chicken necks. Check it out and visit the Planet Money blog tomorrow to get the follow-up on how Yvrose fared with her lender.

Blog author: jballor
Tuesday, February 16, 2010
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NPR’s Morning Edition had a touching piece the other day that illustrated how great a blessing business can be, and just how terrible things can be when there’s no freedom to innovate, produce, and create wealth. Chana Joffe-Walt and Adam Davidson of Planet Money put together the narrative of George Sassine of Haiti and Fernando Capellan of the Dominican Republic, “Island Of Hispaniola Has Two Varied Economies.”

Both men shared the same dream: to open up a T-shirt factory. Sassine has had to struggle through all kinds of adversity in the attempt to realize his dream. And just as it was about to take off for good, to really get going, the earthquake hit. Says Sassine, “I’ve had a coup d’etats. I’ve had hurricanes. Now, I have an earthquake.” The “simple cut-and-sew factory” that Sassine had managed to put together lies in ruins.

Cappellan, on the contrary, started with a simple cut-and-sew operation, but in the interim has enjoyed great success; “His business now is, as they say, several steps up the value chain from the dream he started with.”

Sassine puts his finger on what differentiates him from Cappellan. It’s not ability, or ingenuity, or diligence. What has really prevented Sassine from doing for Haiti what Cappellan has done for the Dominican Republic?

Sassine asserts assuredly of Cappellan, “fortunately, for him, his country, his government was behind him. Me, I’ve been having governments against me all my life.” Political instability, corruption, and tyranny are what kill dreams like Sassine’s and Cappellan’s.

Blog author: jballor
Monday, February 1, 2010
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Business Weekly, a production of BBC World Service, had an informative feature on Toby Sheta, a Zimbabwean mobile phone trader, who provided insights into the courage and tenacity required of entrepreneurs under Mugabe’s brutal dictatorship (you can download the original Business Daily story in MP3 format here).

During the worst times of the Mugabe regime, Sheta would illegally buy and sell fuel coupons, a profitable enterprise because of the chaos of governmental interference in international trade and domestic fuel markets. Sheta says in the context of survival the “black market actually became the formal market,” the place where products were available. “For us the black market was the real market.”

Sheta says that what he gained as an entrepreneur in the emergency economy translate into more normalized economic conditions: “The skills that were learned and some of the principles that we’re using apply in any situation.” Sheta says, “Zimbabweans overall have gone through a school, a very informal school that was first upon us, in some ways in a positive way for us, to actually think and work for ourselves, work with our hands and see where we can see opportunity.”

Risk is a constant feature of enterprise, and Sheta testifies to the survival of the human spirit of innovation: “What I’ve learned is, even as I think of Haiti right now, as long as you’re human, and you’ve got your two feet, your two hands and your brain is still functioning, you’ll survive.”

“As you go into the problems you also go in terms of our creativity and learn how to survive,” he says.

As put by dairy farmer Brad Morgan, featured in Acton’s The Call of the Entrepreneur, “You put your butt in the corner, you’d be surprised what you can achieve.”

In terms of Zimbabwe’s future, Sheta points to stabilization in 2010 and beyond, in part because of the dollarization of the economy, and he concludes that Zimbabweans have “graduated to another level” from the emergency school of economics under Mugabe, looking forward to “see opportunities where in the past we wouldn’t have seen those opportunities.”