His articles are generally to be found in Harvard Business Review, but with a little editing and a few photographs added on, Daniel Isenberg could easily be writing for National Geographic. The Harvard don studies the entrepreneurial species in different regions of the world, and his insights are many.
“The social meaning of risk taking varies,” he says. “When you start an enterprise, does your culture allow you to borrow money from friends and relatives? Or even from banks? Some countries encourage entrepreneurship and others don’t .”
One measure of a society’s entrepreneurship levels is its attitude towards failure. In China and Japan, there’s a big stigma attached to business failure, making it quite impossible for a failed entrepreneur to recoup and try again. “In some societies, business failure marks you for life,” says Isenberg.
“On the other hand, in countries like the USA, UK or Israel, it doesn’t necessarily do you any damage, unless you failed because of some unethical conduct.”
Indeed, American business history offers up many instances of tycoons who went bankrupt several times before they built their fortunes. And the American corporate world usually sees entrepreneurial experience as an asset and those who have it are a valued commodity. American and British entrepreneurs also tend to take bigger bets, whereas the Japanese are far more cautious.
Isenberg uses a baseball analogy, “The Japanese go for base hits rather than try to hit a home run. In Japan, you don’t just quit a steady job to start off on your own, you leave the company gradually There are no leaps and bounds and $20 billion business plans. Japanese entrepreneurship is incremental.”
And then there are the financial institutions, whose policies have a big impact on a country’s entrepreneurship levels. In Europe, for example, Britain and Holland are the entrepreneurial champs, while France and Germany score low on Isenbergs ratings. “The financial institutions of France and Germany generally don’t encourage risk taking,” he says.
What’s the Indian attitude towards entrepreneurship? Isenberg diplomatically avoids a categorical answer, but the evidence is that Indian attitudes to business failure have traditionally tended to be close to that of the Chinese and Japanese. Recall the movies of yesteryear, where failed businesses were depicted as irreversible tragedies, with everyone concerned doomed to a life of penury. But attitudes are changing and Isenberg now sees great entrepreneurial optimism in India.
“India’s greatest asset is its youth,” he says. “The largest chunk of the India’s population is in the 18-35 age group, and that’s a time when people are the least afraid to take risks. On the other hand, India’s greatest liability is the corruption in its system, which is a big dampener to entrepreneurship.”
Isenberg first came to India three years ago to write a Harvard Business School case study on the Bangalore-based Tejas Networks, which he now uses in his very popular second year elective on international entrepreneurship. The case is meant to illustrate how enterprises today go global from the start, rather than plod through the local-regional-nationalglobal phases and Isenberg even has a theme song for it in Leonard Cohen’s First we take Manhattan, then we take Berlin.
“Access to information has been the biggest factor contributing to this global mindset,” he says. “The other factor is the global flow of capital, which enables people to go wherever the money is. The flow of people is slower, but it’s becoming easier now. India’s large expat community is contributing to its entrepreneurial drive. Some them are doing it from the West, others are coming home.”
Launching yourself as a global entrepreneur means competing with the best in the world from the word go and that can’t be easy. But Isenberg has with him dossiers on dozens of entrepreneurs who have done it. One of his favourites is Microfinance International, a company started by a Japanese entrepreneur in Washington DC, which helps Latin American migrants in the USA send cash home at a fraction of the price charged by global giants like Western Union.
“Once you include the bottom of the pyramid in your business plans, there are a lot of spillover business opportunities,” says Isenberg, borrowing from fellow-academic CK Prahalad. “Social entrepreneurship is one of the biggest areas of entrepreneurship, a tremendous number of young people are inspired to go in for it today.”