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Entrepreneurship as a Diplomatic Tool

By Anne-Marie Slaughter, Elmira Bayrasli | Project Syndicate | March 23, 2016

Former UK Deputy Prime Minister Nick Clegg on a visit to M-Pesa stall in Mozambique. CREDIT: Cabinet Office (CC).

Armenia and Turkey have long been at odds. Divided over a tragic past, the neighboring countries do not have diplomatic ties, and their border remains closed.

Despite this, in November 2014, a group of Turks traveled to Armenia for Start-up Weekend, an event where aspiring entrepreneurs hone and pitch their ideas to investors and experts. In mixed teams, young Armenians and Turks worked together to build new ventures. "We weren't focused on being Armenian or Turkish—just on being the best," a Turkish participant noted.

That sentiment is exactly what the people who backed the trip—diplomats from the United States and the European Union—had hoped to achieve. For decades they have struggled to find common ground for Armenians and Turks to begin a dialogue. The common personality types, values, and single-minded focus of entrepreneurs created an opening.

Entrepreneurship has become a catalyst for progress in similarly thorny situations worldwide. The focus on job and wealth creation has become a "talking point" upon which nearly all governments can agree—or at least find little with which to disagree. That has made it a handy tool for a new form of diplomacy.

Whether in Africa, Asia, Latin America, or the Middle East, entrepreneurship has improved individual capability, capacity, and connectivity. It has stimulated not only economic activity but also social mobility. An emphasis on entrepreneurship stands the traditional foreign-aid paradigm on its head, because it is based on the assumption that the engine of development is local talent, a class of people—equally distributed throughout the world—with the capacity to innovate and commercialize their innovations.

In Africa, mobile money platforms such as M-Pesa in Kenya and Paga in Nigeria have solved a key problem for millions in their respective countries and across several continents: the lack of financial services. Through a simple text message, anyone with a cellular handset is able to send and receive money. That has helped move money. More importantly, it has given millions of individuals an opportunity to start their own businesses. Unlocking human creativity and ingenuity is lifting millions out of poverty and helping improve national infrastructure.

As fossil fuels contribute to global warming, entrepreneurs in Asia, Latin America, and Europe are pioneering a variety of alternative energy solutions. Start-ups such as Optima Energia in Mexico are harnessing wind, sun, and biofuels to offer sustainable and scalable energy options.

"An entrepreneur is a person with the vision to see a new product or process and the ability to make it happen," writes Steven Koltai in his forthcoming book, Peace Through Entrepreneurship. A former U.S. State Department official who set up the Global Entrepreneurship Program (GEP) in 2009, Koltai describes entrepreneurship as a "job-creating machine." It is the difference between opening a restaurant and reimagining what the experience of eating could be like. Entrepreneurs create new things that in turn create consumer demand for those things.

Last week, GEP, along with the Ewing Marion Kauffman Foundation, the Brazilian NGO ANDI, and the city of Medellín co-hosted the Global Entrepreneurship Congress in Medellín, Colombia. The gathering brought together entrepreneurs, investors, researchers, and policymakers from more than 160 countries to share best practices and work to bolster start-up growth and build the ecosystems in which they operate. Medellin itself is busy transforming itself from a cocaine capital into a start-up hub.

Silicon Valley seized on this phenomenon some time ago, rolling out the red carpet for world leaders such as Indonesia's President Joko Widodo, India's Prime Minister Narendra Modi, and China's President Xi Jinping. These world leaders are looking for the Silicon Valley secret: the magic ingredients that will create an equally vibrant innovation ecosystem in their countries.

Entrepreneurs themselves, however, do not depend on innovation or technology. As Koltai points out, Starbucks built an enormous enterprise around serving a cup of coffee, a centuries old beverage. Today Starbucks employs roughly 182,000 people worldwide—50,000 more than Facebook, Google, and Apple combined. An Argentine, Jordanian, Malaysian, or Spaniard who can visualize and create thriving global demand for a product or service—just as Spain's Amancio Ortega did with Zara—is just as much an entrepreneur as the next Bill Gates is.

From Lahore to Lagos, Mexico City to Mumbai, governments are looking at their own populations as pools of talent waiting to be tapped. It is time for diplomats to do the same. They should support and encourage job creators and problem solvers, and turn development assistance into investments. They should include entrepreneurship in economic policies and trade agreements. They should press governments to allow entrepreneurs to develop their innovations as a component of human flourishing and as an essential source of sustainable solutions for often-intractable problems such as disease, climate change, migration, and war.

Indeed, entrepreneurship, as a channel for young men and women to express themselves, is a compelling weapon in the fight against terrorism and violent extremism. It is an outlet to build and add value rather than destroy it. This is especially important in the Middle East, which is, as the Brookings Institution has noted, experiencing "an unprecedented 'youth bulge.'"

More than 30 percent of the region's population—over 100 million people—is aged 15-29, and a significant number of these young people are unemployed. For them, entrepreneurship and the ability to gain control over their own destinies isn't an option; it is an imperative.

Similarly, entrepreneurship is not just a commercial or economic option for diplomats and policymakers. In a world with ever more pressing challenges—from pandemics to poverty and resource depletion to religious extremists—it is becoming a vital tool of foreign policy.

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