Global Entrepreneurship S
eptember the 11th means something very
different
for the people of Chile. It refers not to the events in New York and Washington
in 2001, but to a military coup in Santiago de Chile on the same date in 1973. That was a long time ago and most people in Chile prefer to talk about the peaceful transition back to democracy and how income per head has tripled since the Presidential election of
1990. To economists
everywhere Chile serves as one of the world’s economic laboratories, an outlier in Latin America where market solutions predominate in the areas of education, health, pensions and infrastructure more than anywhere else in the region. To some, this is why Chile has the highest per capita income in Latin America and is the first South American country to join the OECD. This is certainly the case made in an extremely readable book ìGuide to the Perfect Latin American Idiotî. Though of course, there is a different argument made in Open Veins of Latin America: Five Centuries of the Pillage of a Continent, the book Venezuelan President Hugo Chavez gave United States President Barack Obama at a Summit of the Americas.
Chileans reading this will want me at this point to stop talking about the past and instead start talking about the fantastic initiative that is Start-up Chile but to appreciate the context, I do have to mention the influence of Milton Freidman. Friedman, winner of Nobel Memorial Prize in Economics in 1976, was almost certainly the most influential economist of the second half of the 20th century. After the military coup of 1973, Freidman visited Chile
but much more
significantly, many graduates of the Chicago School of Economics where he taught were appointed to important positions in the new government. Their influence was such that Chile’s economic policy came to be known as that of The Chicago Boys. Friedman had issues with this, including his insistence that political freedom had to accompany economic freedom, but his ideas were influential to the extent
that Chile did not follow the policy of overcoming underdevelopment through government spending and centralised planning as did others in the region.
Fast forward to the present day and in the view of The Economist Chile’s approach is under greater strain now than at any time since 1990. The issue gaining most attention are the protests of middle class students and their demands that the state assume a dominant role in education, while barring for-profit providers. Again, my Chilean readers will not want me to mention the name of photogenic left wing student leader Camila Vallejo Dowling with her ‘soft green eyes’
To create a tech centre like Silicon Valley, you need to first attract smart entrepreneurs from all over the world. Then you have to create entrepreneurial networks and instill a spirit of risk
(say the Chicago Tribune), a stark contrast with the Monty Burns like features of President of Chile (and yes, billionaire) Sebastian Pinera. The protests are about more that just education, they are about the direction of Chile and an insistence of a new dialogue. The generation that grew up after 1990 do not fear that their country is at risk of descending into the chaos that is Venezuela or, increasingly now, Argentina. They believe they should have prosperity and quality of opportunity. So what to offer them?
Start-Up Chile
Enter Nicolas Shea, another Chilean of Irish descent, and Vivek Wadhwa, an Indian technology entrepreneur
who was a late entrant to academia. Nicolas studied at Stanford University in Silicon Valley where he came under the spell of the undoubted magic of a place that sees some become millionaires in their 20’s and others build era defining products that span the world. Chile too is in America, but what does this Silicon Valley place have that makes it special and could the same happen along Calle Bernardo O’Higgins? Wadhwa’s contribution to this question came partly from the research he had done but also his own experience as an entrepreneur. His philosophy is that basically,
it’s
about people. He became one of the first people to openly criticise the development model of just providing office space near to a university and in his words ‘wait for the magic to happen’. Instead, what he proposed was a people centred approach to start-ups.
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