Igniting innovation
"UNEMPLOYMENT is creeping ever higher. In the United States it will soon exceed 10%. In parts of Europe it is closer to 20%. Around the world young people are finding it all but impossible to get a job.
So far policymakers have focused on rescuing the economy from free fall, boosting demand, however indiscriminately, and rescuing failing companies, however expensively (AIG received $180 billion-worth of government support). But policymakers are beginning to turn their minds to the potentially more rewarding question of creating tomorrow?s jobs, rather than trying to save yesterday?s. The buzzwords in government circles are entrepreneurship, innovation and venture capital.
This makes perfect sense, in theory. Innovative start-ups are efficient engines of job creation and long-term economic growth. In America start-ups have accounted for almost all the net job creation in the past couple of decades. In the developing world, new technologies are helping to break the cycle of poverty. An extra ten mobile phones per 100 people in a typical developing country boosts GDP growth by 0.8 percentage points, according to the World Bank, by helping small entrepreneurs flourish."
The Economist is recommending the Israeli Model.
"Last year Israel, a country of just over 7m people, attracted as much venture capital as France and Germany combined. Israel has more start-ups per head than any other country (a total of 3,850, or one for every 1,844 Israelis), and more companies listed on the NASDAQ exchange, a hub for fledgling technology firms, than China and India combined. It may not have the same comforting ring as ?the Swedish model? or ?the polder model?, but when it comes to promoting entrepreneurship, ?the Israeli model? is the one to emulate.
So far policymakers have focused on rescuing the economy from free fall, boosting demand, however indiscriminately, and rescuing failing companies, however expensively (AIG received $180 billion-worth of government support). But policymakers are beginning to turn their minds to the potentially more rewarding question of creating tomorrow?s jobs, rather than trying to save yesterday?s. The buzzwords in government circles are entrepreneurship, innovation and venture capital.
This makes perfect sense, in theory. Innovative start-ups are efficient engines of job creation and long-term economic growth. In America start-ups have accounted for almost all the net job creation in the past couple of decades. In the developing world, new technologies are helping to break the cycle of poverty. An extra ten mobile phones per 100 people in a typical developing country boosts GDP growth by 0.8 percentage points, according to the World Bank, by helping small entrepreneurs flourish."
The Economist is recommending the Israeli Model.
"Last year Israel, a country of just over 7m people, attracted as much venture capital as France and Germany combined. Israel has more start-ups per head than any other country (a total of 3,850, or one for every 1,844 Israelis), and more companies listed on the NASDAQ exchange, a hub for fledgling technology firms, than China and India combined. It may not have the same comforting ring as ?the Swedish model? or ?the polder model?, but when it comes to promoting entrepreneurship, ?the Israeli model? is the one to emulate.
posted by Dody G. at 4:47 PM
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