Risky Business
Rene Carayol
05-Nov-07
Take one outgoing Prime Minister with an unquestioned flair, a natural charisma and the confidence to make radical decisions. Add his successor, a former Chancellor of the Exchequer; a man with a dour public persona and a history of taking the cautious path. The equation doesn’t immediately point to a new era of British politics in which risk is once again embraced instead of being talked about dismissively as yet another four-letter word.
But appearances can be deceiving. Already Brown has put the building blocks in place to take advantage of the potentially booming entrepreneurial class of the future that has been slowly building across the land – the vast and diverse set of immigrants and ethnic minorities that has enabled Britain to flourish as one of the most cosmopolitan societies in the world. It is a situation that all of ‘Old’ Europe is waking up to. The UK, France, Italy, Germany, Spain, Scandinavia and the Benelux countries have become so risk adverse that we have all started to become embarrassingly late arrivals at any new business success parties.
The big question is “why?”
Is it our heritage?
Is it complacency?
Could the original seats of power in Europe have become fat cats that no longer have the appetite for success compared with the new boys on the block like Russia, India and China?
If the latter is the case, then the US remains a conundrum. It has been the richest country in the world for as long as most people can remember, but it is still the most entrepreneurial and still has the biggest drive to keep getting better. It remains the hungriest to succeed.
Maybe it’s how the Americans deal with failure. Did you know that there are more economic and corporate suicides in Japan than there are traffic deaths? The stigma of failure is so colossal that many pay the ultimate price.
In Germany the director of a failed company is struck off for 12 years. In Italy it is 7 years, but nobody bothers to check. In the UK it is 3 years, but on the other side of the pond there is an entirely different system; most people tend to file for Chapter 11. This enables a troubled business to ‘reorganise’ its contractual and debt obligations so that it can make a fresh start. No other country in the world follows this simple rationale, which basically states that the value of a business is greater if sold or reorganised as a going concern than as the value of the sum of its parts if sold off individually.
Everywhere else governments seem to form a gleeful part of the hanging committee for failing businesses.
And it is this approach that makes the business landscape a bleak and unfriendly one in Old Europe compared with the US. In America your stock continues to rise even if you fail.
Blue chip boards consistently look for people that have ‘been there and done that’; individuals that are eager to prove people wrong, have experience when the going gets tough and wont make the same mistake twice.
But the real reason behind these cultural differences might go even deeper than that.
The founding fathers of the USA were from Old Europe. They left because they had absolutely nothing to their name and the New World promised a fresh start despite having little else to offer other than land and natural resources.
These pioneers had to fail and fail fast before they enjoyed any success, making the United States the most failure tolerant country in the world in the process.
And yet the UK was also not always so risk adverse. After the bloody attacks of Eastern Europe at the start of the 1900s, many persecuted Jews were forced to leave their homeland and flee to the United Kingdom as a safe haven. Jewish men arrived with nothing but the shirts on their backs and the dream of sending for their family when they had established themselves. They knew only how to trade and gravitated towards the market stalls and the penny bazaars of the northern market towns of England. From these humble beginnings came the huge retail empires of Marks & Spencer, Dixon’s and Tesco.
As immigrants they had nothing to lose and adopted a risk embracing strategy in a strange land with a drive and hunger to succeed and see their families again.
They were the entrepreneurs of their age and offered a huge lesson to many.
But their sons didn’t suffer as they had and were sent to the playing fields of Eton and Rugby and then on to the universities of Oxford and Cambridge. Without the struggle the entrepreneurial spirit was lost and although many went in to the family businesses, they soon left. There was no longer the appetite or the graft. History dictates that as soon as any void is left, it is always filled. The new global entrepreneurs come from the emerging markets with a fresh desire to win. It’s little surprise that some of the richest people in the world now hail from Russia and China. These are the individuals that are taking the risks once again. Old Europe, especially the UK, has had an extraordinary run of prosperity, bringing with it a feeling that the bad times are over and the good times are here to stay.
The newcomers to the European Union have not all had it quite so easy and the entrepreneurial spirit of the former Eastern bloc is causing a stir in the comfy West.
Boy, do we need it.
As has been said by many, especially the renowned business psychologist Dr Adrian Atkinson, entrepreneurialism cannot be taught or learnt. Your risk profile is shaped between the years of 7 and 14 and after that you either have it or you don’t.
If you live in a world of plenty there is little chance that you will have the appetite to go out and become a wealth creator. If you live in a world that is trying to catch up, the desire and the hunger become a part of every day life.
Gordon Brown now has the chance to shape the next decade of economic and demographic growth in the UK and the signs are there that it has become a pressing priority of his to promote entrepreneurialism not amongst the educated or the privileged, but amongst those that are struggling to make ends meet.
At a time when terrorism is threatening to undo the fabulous steps that have been taken to integrate society in Great Britain, there’s nothing that unites people of every background more than a common goal.
It’s time for Gordon Brown to provide one.
