March 17, 2009
George W Bush is reputed to have said that the French don’t have a word for ‘entrepreneur’. Whether he said it or not – probably not – the assertion contains a grain of truth. In its strictest sense the French word means a contractor, possibly a businessman, but does not convey the idea of a ‘get-up-and-goer’.
The French mind is ill-attuned to so vulgar a concept as entrepreneurship. Being a self-starter is tantamount to being an upstart. The highly organised pecking order of French society traditionally manages things from the top down. Dirigisme, which is a French word, gets in the way.
For decades now, the French government has practised the art of parachuting people from the administrative top into the upper echelons of industry – a practice known as pantouflage, another uniquely French word. The practice is accompanied by a tradition of favouring the graduates of the Grandes Ecoles for the choice jobs in French society. Top of the list comes the ENA, with the Polytechnique not far behind.
The mentality of these people is illustrated by the reaction of an énarque to my foolish question whether his fellow-énarques would rally round if one of them made a mistake (their team spirit and sense of common cause is renowned). “An énarque would never make a mistake,” he replied.
There are some French entrepreneurs who defy the system. One of them, Malamine Koné who launched the very successful Airness footwear company, declares that “the French system is more rigid, more cautious and less risk-taking than the American one. In France, the entrepreneur is afraid of failure.”
So much for France. Unfortunately, the lack of an entrepreneurial spirit is also widespread in other parts of Europe, most notably but not exclusively the countries to the South. The lure of a secure future has been the dominant motive for young Europeans, particularly in the Latin cultures but also elsewhere. Witness the Austrian university graduate who took out an insurance policy at the age of 21 to finance ‘a decent funeral’ for himself. He was taking no chances, even beyond the grave!
In Spain, Italy and elsewhere, young people are still brought up in the secure bosom of the family (a phenomenon which, with falling birthrates, is now deflating fast!) to look for a ‘safe job’ for life, previously in banking or law, then and now in the public administrations.
And yet there are startling exceptions, even in Italy. My favourite example is a small ceramics factory near Rome, in an area where neighbouring communes impose fairly heavy local taxes but operate on different tax years. This factory is mounted on wheels and, when the reckoning time to pay tax arrives, the owner has a tractor drive it off to another commune!
But there are more productive forms of Italian entrepreneurship. The SMEs in the area around the town of Treviso, north of Venice, have an output that exceeds the Gross National Product of Greece. Yet, in what the Global Entrepreneurship Monitor 2008 report defines as the innovation-driven economies, Greece comes top in Europe for ‘overall entrepreneurial activity’, followed by Iceland and Ireland (oh, dear!), Finland, Norway and Spain. Maybe Greek performance owes a lot to self-employed restaurateurs, shoemakers and the like.
European aversion to taking a chance in life is a cultural and societal phenomenon, reinforced by the view that going bankrupt carries a personal stigma. A Catalan university professor who works both sides of the Atlantic says: “All my American students want to start their own businesses. My European students just want a safe job.”
American entrepreneurship comes from the impulse of the American Dream and the tradition embodied in the phrase ‘Go West, Young Man’. It reflects the reality of a huge country with almost limitless natural resources. The impulse is now muted by events, but the spirit is still there. In the words of the GEM 2008 report, “in the United States there is more early-stage entrepreneurial activity than in EU countries and Japan.”
The phenomenon of risk aversion plays a key role in deciding whether countries and cultures encourage going into business on one’s own, rather than seeking a secure job in an organisation. The concept is enshrined in a characteristic identified by Gert Hofstede, the Dutch social psychologist. Known as the ‘Uncertainty Avoidance Dimension’, it could also be described as tolerance of ambiguity. At the time of Hofstede’s research, this dimension was particularly high in Greece, Portugal, Belgium, France and Spain.
But maybe things are starting to change. In an international survey, the French Sofinco consumer credit organisation offered 15-19 year-olds in eight countries four options as “the best way to make money”: hard work, taking risks, luck and honesty. The popularity of taking risks took everyone by surprise. While the British kids unexpectedly opted for hard work, and the risk averseness of the French and Italians and Spanish showed up again in the results, the Portuguese (32%), the Dutch (42%) and – oh, surprise! – the Germans (42%) rated taking risks first. But maybe these youngsters will change their minds back to ‘default’ when they reach a more responsible age.
The key to the EU’s Lisbon Strategy is entrepreneurship. The closer we get to 2012, with the economic downturn now to be taken into account, the less sure we can be of achieving the Lisbon Agenda. Something serious needs to be done to change mentalities!Author : Richard Hill