• William Laraque, Managing Director at US-International Trade Services


• 04.11.2015 12:00 am
undisclosed

It is jokingly said that behind every successful man is a very surprised woman. My grandmother used to say that more truth is said in jest. Behind every great entrepreneur I have met is a pragmatic woman/man. In my experience, genius is the combination of inspiration, hard work and the pragmatic. Every great entrepreneur I know has a great mentor/bookkeeper. Often, this bookkeeper is her husband, his wife. Many say like Mao that "women hold up half the sky," but how many know what this means in a practical sense? Economic developers certainly do not!

During the Enlightenment, de Montesquieu wrote in The Spirit of the Laws that the genius of democracy is the balance of the executive, the legislative and the judiciary. In business, genius is the balance of the imagination with hard work and the pragmatic.

Rottenberg and Bierly write in Making Entrepreneurship Contagious that despite the best efforts of many governments, enterprises have not flourished in Moscow, Chile and Malaysia. They are wrong about Chile but I'll get to that. The authors postulate that nurturing, tough love and capital must be applied by more seasoned entrepreneurs in order for the fledglings to succeed. Barney Frank said the same thing in his guidance to students about transforming the world. You have to be pragmatic and you have to know accounting.

Igniting an economic development transformation requires reasoning. De Condorcet, as Amartya Sen indicates, believed that human reasoning was capable of driving human evolution toward Utopia despite our human limitations. This required an egalitarian society, free of slavery and where women were given equal opportunity for education. The salons of Paris, the crucibles of thought during the Enlightenment were arranged, were catalyzed by women. Some of the salon creators were Marquise de Rambouillet, Madeleine de Scudery, Madame de Tecin, Madame Dupin, Madame Necker, Madame Helvetius, Sophie de Condorcet, etc., etc,. De Condorcet, Leibniz, Diderot, de Montesquieu, etc., etc., were active participants. Leibniz corresponded with over 1,000 people with whom he exchanged ideas, thoughts. Salons, women created the venue for the dissemination of ideas long before the Internet.

Broadening our horizons beyond prejudice, myopia, anachronism and xenophobia, starting an economic development grass fire, requires mentoring and the distribution of capital to immigrant entrepreneurs who are able to benefit their home countries. The general sense is that this process requires venture capital, P2P financing, angel investing or crowdfunding. This is nonsense. Common sense is neither common, nor is it generally held.

Kedar Gupta was able to develop GT Advanced Technologies and ARC Energy into a solar technology and energy world-beaters because of two things. He had a practical wife as mentor/bookkeeper and coach and he had the U.S. Ex-Im Bank.  Venkee Sharma was able to do the same at Aquatech, in Pennsylvania. Sharma calls the U.S. Ex-Im Bank “the bank of dreams.”  Baldev Dugall could do the same at Lumi-Ventures and Lumi-Solair, in NYC, with energy efficiency and solar-powered lighting, but he is too busy transforming the NY tri-state area. Needless to say, these entrepreneurs could use the base of Working Capital Guaranties and other programs of U.S. Ex-Im Bank to transform their native India and indeed are starting to do so. The larger point is that venture capital, P2P financing, crowdfunding, dilute ownership and remove the incentive from genius and innovation.

Government guaranties applied intelligently to international trade transactions that have a historical default rate of .0002% is a reasonable and pragmatic way of driving global economic development. The risk of non-payment as a result of political and commercial risk can be mitigated and rendered manageable with export credit insurance. But first, the process has to be extricated from the choke-hold of ideology. The U.S. Ex-Im Bank just barely made it through the grip of myopia, xenophobia and grossly limited vision.

In sum, genius must be moderated by practicality. Financing of innovation can be driven by credit unions and banks that are incentivized by government guaranties. The fact that this can be turned into an economic development grass fire is not a matter of ideology.  It is a matter of balance, of coaching, of cross-border practicality. If you don’t believe me, ask my wife.