Why Are Some Societies More Entrepreneurial than Others? • Hacker News Board

Re: Why Are Some Societies More Entrepreneurial than Others?

#71

Post by tinyhouse » Mon, Sep 23, 2019, 2:12 PM UTC

ido wrote: post #24

kayaeb wrote: post #14

There's a good book on this called "Why Nations Fail," [1] they posit that extractive economic policies (corrupted governments) essentially de-incentivize entrepreneurial businesses, while inclusive policies cause them to thrive. They use this argument to counter "Guns, Germs, and Steel" [2] to explain dramatic economic differences across country borders in similar environments. [1] https://www.goodreads.com/book/sho…

Interesting! Anecdotally I'm an Israeli who moved to Europe (first Austria then Germany) and at least from my layman's perspective both of these countries seem both a lot less entrepreneurial than Israel and a lot less corrupt... So I wonder if something unusual is going on or if one or more of my perceptions are wrong.

One possibility is that in rich countries with less corruption where people can have high-paying jobs that are not stressful and can still have plenty of personal time, the incentive of looking for alternatives (like starting you own business) is not that high. Another way to put it is that in Israel it's more of a survival culture and many people see entrepreneurship as a path out. There are many countries similar to Israel that are less innovative; this can be explained by the fact that Israel is still an advanced country with good universities and military that always needs to improve.

On the other hand, entrepreneurs are usually independent people who really value freedom and don't like to work for others. Regardless if they can find a good job or not. So I'm not sure if my first theory holds. Maybe Israelis are just more independent then the average European (which can be explained by the culture and environment too).

Re: Why Are Some Societies More Entrepreneurial than Others?

#72

Post by ch4s3 » Mon, Sep 23, 2019, 2:13 PM UTC

cpursley wrote: post #63

lnsru wrote: post #47

Earlier quoted context omitted.

IDF is a great Israel’s advantage. This high quality manpower is not only highly qualified, but also understands hierarchy and is not afraid to take responsibility when needed. The same is valid for Switzerland and their mandatory military service. University cannot replace army.

I don't understand the down votes (maybe they are anti-Israel?). Heck, I'm pretty libertarian but see the value in a mandatory military service. There's many lessons to be learned in an environment like that including how to effectively work together, take initiative as well as the lifelong relationships you create.

Doesn’t mandatory service violate the Non-Agression Principle[1]? It is after all coercive by definition.

[1]https://en.m.wikipedia.org/wiki/Non-aggression_principle

Re: Why Are Some Societies More Entrepreneurial than Others?

#73

Post by jdm2212 » Mon, Sep 23, 2019, 2:21 PM UTC

ramtatatam wrote: post #67

Nations developed different set of laws. Nations with simpler laws make it simpler to take risk. To run business means take risk, but you will never win if you have state as your enemy. I say this from experience, was living in both over bureaucratised country with such complex regulations that even bureaucrats could not follow. In such country your business relies on mood/honesty of public servant who handles you. I…

The paper argues the opposite explicitly. From the abstract: "Rather, the evidence shows that the strongest predictors of cross-national variation in entrepreneurial activity were normative, with social norms being the most strongly associated with entrepreneurialism and rates of organizational founding."

Re: Why Are Some Societies More Entrepreneurial than Others?

#74

Post by cpursley » Mon, Sep 23, 2019, 2:25 PM UTC

ch4s3 wrote: post #72

cpursley wrote: post #63

Earlier quoted context omitted.

I don't understand the down votes (maybe they are anti-Israel?). Heck, I'm pretty libertarian but see the value in a mandatory military service. There's many lessons to be learned in an environment like that including how to effectively work together, take initiative as well as the lifelong relationships you create.

Doesn’t mandatory service violate the Non-Agression Principle[1]? It is after all coercive by definition. [1] https://en.m.wikipedia.org/wiki/Non-aggression_principle

Yes, which I one of the reasons I'm still against it. Just acknowledging the potential upsides.

Re: Why Are Some Societies More Entrepreneurial than Others?

#75

Post by jdm2212 » Mon, Sep 23, 2019, 2:28 PM UTC

jmkd wrote: post #17

Always worth zooming out and considering this study that relates average temperature to economic production, claiming 13C as a sweet spot https://www.nature.com/articles/nature15725

I believe the conventionally accepted explanation for this is Acemoglu's, and it's that GDP is an Nth-order effect of climate. Warm weather -> highly productive agriculture -> landholders become extremely wealthy -> oligarchic government -> low GDP. Think of the American North and South before the Civil War, where slavery and inequality took hold in the highly agriculturally productive South but never in the North. The North wound up poor and more egalitarian, but eventually industrialized and overtook the South.

Edit: warm weather also happens to correlate with another natural resource: oil. Oil tends to produce a similar dynamic -- whoever owns the oil owns the government and badly mismanages the government for their own benefit. The exceptions prove the rule: Alaska and Norway were both established, egalitarian societies before the oil was found, in contrast with Middle Eastern petrostates, Russia and Venezuela.

Re: Why Are Some Societies More Entrepreneurial than Others?

#76

Post by notfromhere » Mon, Sep 23, 2019, 2:35 PM UTC

petra wrote: post #59

Zeitgeschehen wrote: post #31

Earlier quoted context omitted.

>Sure, most of it is invisible on the international scale, but it's there and underpins an economy of specialists. Actually a not insignificant part of these backwater businesses are so called Hidden Champions[1]. Basically, small companies who are still leader in the world market for their very specialised product. [1] https://en.wikipedia.org/wiki/Hidden_Champion

What does "small companies" mean in this context ? Do they do engineering or manufacturing? And how could they maintain an advantage over so many others and of course over large companies ? Where's the r&d budget coming from ? And what about marketing ?

They're businesses that hyper-specialize in one area and have done so over the long-term. The markets are too small for some giant conglomerate to come in and dominate, so it gives an opening for smaller firms to dominate the global market for said good - while it won't have your next unicorn, the markets are great enough to create prosperity for the owners and the local region. Germany has this spread over the country fairly uniformly, so it creates a wide platform for economic prosperity even in rural areas.

The companies themselves are usually under 50M Euro and have under 500 employees, and export-oriented. They've been a big target for Chinese acquisition, usually for companies that don't have any family to inherit the enterprise.

Re: Why Are Some Societies More Entrepreneurial than Others?

#77

Post by wdroz » Mon, Sep 23, 2019, 2:42 PM UTC

lnsru wrote: post #47

breadandcrumbel wrote: post #37

In the last few years I had the chance to live in Amsterdam, Buenos Aires, Perth, Sofia and Tel Aviv From all of those cities Amsterdam and Tel Aviv a lot more innovative and the number of entrepreneurs was high (at least felt like it) I think that there are few criterions that a city need to have to become a tech hub - Relatively small city - Society who worship startups and entrepreneurs - Many Programmers and engi…

IDF is a great Israel’s advantage. This high quality manpower is not only highly qualified, but also understands hierarchy and is not afraid to take responsibility when needed. The same is valid for Switzerland and their mandatory military service. University cannot replace army.

Unlike IDF, the army is only mandatory for men in Switzerland. A lot of men are also doing alternative services (civil service or civil protection) instead of the army. In 2008 [0], only ~65% of men was declared fit for the military during the recruitment process (on 38.597 young people).

IMO I wouldn't conclude that the "high quality manpower" is due to the half of the half of the population.

[0] - https://web.archive.org/web/20110724085052/http://www.vtg.ad...

Re: Why Are Some Societies More Entrepreneurial than Others?

#78

Post by oblio » Mon, Sep 23, 2019, 2:46 PM UTC

bsanr2 wrote: post #54

kayaeb wrote: post #14

There's a good book on this called "Why Nations Fail," [1] they posit that extractive economic policies (corrupted governments) essentially de-incentivize entrepreneurial businesses, while inclusive policies cause them to thrive. They use this argument to counter "Guns, Germs, and Steel" [2] to explain dramatic economic differences across country borders in similar environments. [1] https://www.goodreads.com/book/sho…

Are there any failed nations without a relatively recent (<100 years) history of economic or political exploitation by a contemporary superpower?

It's far from failed, but Argentina used to be a top 10 country in the world. Most of their woes are self-inflicted.

Re: Why Are Some Societies More Entrepreneurial than Others?

#79

Post by oblio » Mon, Sep 23, 2019, 2:48 PM UTC

jdm2212 wrote: post #75

jmkd wrote: post #17

Always worth zooming out and considering this study that relates average temperature to economic production, claiming 13C as a sweet spot https://www.nature.com/articles/nature15725

I believe the conventionally accepted explanation for this is Acemoglu's, and it's that GDP is an Nth-order effect of climate. Warm weather -> highly productive agriculture -> landholders become extremely wealthy -> oligarchic government -> low GDP. Think of the American North and South before the Civil War, where slavery and inequality took hold in the highly agriculturally productive South but never in the North. T…

Counter-point : Russia.

Re: Why Are Some Societies More Entrepreneurial than Others?

#80

Post by repolfx » Mon, Sep 23, 2019, 3:02 PM UTC

coldtea wrote: post #39

repolfx wrote: post #23

Earlier quoted context omitted.

Watch out for a scaling fallacy. If the Dutch are just as entrepreneurial as Americans, then there will be way more successful Americans and American companies because the USA is so much bigger. Ditto for China. You'd really need to calculate "successful entrepreneur per 100,000 people" or something like that. Also, selection bias. You're on a tech website. Switching to Denmark for a second, the Danes are incredibly…

> You'd really need to calculate "successful entrepreneur per 100,000 people" or something like that. Even that wouldn't be enough, because the supporting apparatus and immediate market for a Dutch entrepreneur would be still very much smaller than for a US based on - so Dutch entrepreneurs should expect less support and not as good environment for their steps to grow their company, even if as a ratio there are e.g.…

You're assuming you can know (or rather, that a bureaucracy can know) what the 'correct' size for any given business is.

Google is a medium sized company by many measures. There are companies with far more employees, offices, and physical footprint for example. Who are you to say that this company is a "behemoth" but for example Volkswagen ($221 billion of yearly revenues) is not? Where is the line drawn?

I think a lot of entrepreneurs are motivated by the thoughts of huge success. If a government says that success will be punished the moment two-bit competitors complain (as e.g. tiny websites that nobody ever cared about complained about Google Shopping), then why set out on the arduous journey to create a big firm?

AMD vs Intel is different. In cases like that, it's obvious how to avoid problems: don't pay companies to not use your competitors. That seems reasonable.

But with something like Google Shopping vs companies so small and worthless that the EU's press release doesn't even bother to name them (nor does Wikipedia's page on the case), it's not at all clear what lessons entrepreneurs should draw. Don't add features to your own product? Don't be too successful? I followed all three cases closely and frankly to me the enforcement looks arbitrary and vindictive (and yes I'm an "EU citizen"). The Commission decided - entirely arbitrarily - that Google Shopping must be the dominant way to buy things online, which will come as news to people who use Amazon or Ebay or European equivalents like Zalando.