Europe’s “Silicon Valley”

“I found an extremely vibrant Portugal. (…) In most of the last 400 years, Portugal has trade with the rest of the world. So it’s a very focused nation, it’s in its DNA to do things and sell them anywhere in the world. (…) Past is past, and seven years ago there was a generation that focused on making a better future. Because these people do not care about politics, IMF or EU decisions. Whatever the circumstances, these people are determined to build great things. It is an unexpected level of positivism. And that can be felt by walking in Portugal.”

The author of these words is Paddy Cosgrave, co-founder of Web Summit, in an interview with Diário Económico, on 5 February. The Web Summit is considered one of the most important meetings of entrepreneurship and technology of the world, and has been held since 2010 in Dublin, Ireland. This year of 2016, and in the next three years, the Web Summit will be held elsewhere. Do you know where? Is it Silicon Valley? London? Berlin? Shanghai? No, it’s really in Lisbon. Speaking of this move to Lisbon, Paddy Cosgrave said that “it is a magical city with so much history. I am very happy that we can call Lisbon our home in 2016. “

These words should make us reflect while Portuguese people. From my point of view, I will share some thoughts with you, based on those statements and on what I observe around me.

About 3 years ago I was in Silicon Valley, California. It was a remarkable experience for me. I will share the details of this trip with you in one of my next articles. In this context, I recalled this trip concerning Paddy Cosgrave’s statements. Silicon Valley is in fact a different place, still far from the Portuguese reality. After returning, several people asked me “but what difference is there that is so great?”. I used a metaphor to explain to them: in a certain place of the world there is a river, which runs from the mountain where it rises, to the sea; In this place all the people are taken to swim towards the mountain; When someone plunges into the river and begins to swim in that direction, obviously he/she feels enormous difficulties, because the current is against him/her; He/she will need to make a great effort to get around, and he/she will have to stop at the bank several times to rest; He/She will even have to be careful not to be pushed back. In another place of the world, distant of that, exists a similar river; But there is a fundamental difference: people swim towards the sea, that is, they have the current in their favour; This allows them, with a controlled dose of effort, to make much more trips in the river, as water helps them to move, rather than hamper them.

We in Portugal are no worse “swimmers” than those in Silicon Valley. We are no less competent, less intelligent, less efficient or less capable. Simply the Silicon Valley system works in a way that enhances entrepreneurship. There it is almost impossible not to undertake. Even the logic of trial-failure is valued, as it demonstrates resilience, persistence and will to win. Here, our “river” runs almost always against the entrepreneur, because most of the time creating a business is an incredible amount of obstacles. We have been improving, it is true, but there is still a long way to go. Portugal has already been an example of entrepreneurship in the

past, when it gave new worlds to the World. Why do we recede? Why are we today, people limited by fear?

Portugal is far from being a paradise for entrepreneurs. But has this prevented many Portuguese startups from being an international success today? No. Did that prevent the Web Summit from choosing Portugal? No. Imagine what would happen if our country was able to build a truly empowering eco-system for entrepreneurs. The Web Summit can help change the overview, but it certainly will not be enough.

Is it possible to turn Portugal into a Silicon Valley of Europe? Is there something stopping us? Only ourselves.

Till next post!

Marco Libório

UWU Solutions CEO / Consultant / Lecturer

blog@marciliborio.me

Entrepreneurship and Socioeconomic Development

What is the true role of Entrepreneurship in promoting the social and economic development of a country or region? Is the phenomenon of Entrepreneurship capable, on its own, of leverage the development of a society? Under what conditions can it do this?

According to the United Nations, “The Entrepreneurship hypothesis being linked to economic growth, finds its most immediate foundation in simple intuition, common sense and pure economic observation: activities that turn ideas into economic opportunities are at the heart of Entrepreneurship. Entrepreneurship is a source of innovation and change, and as such, it prompts productivity improvement and increased economic competitiveness.” (United Nations, 2005). “As regard both qualitative issues and quantitative dimensions of economic development, Entrepreneurship can make a positive contribution. This phenomenon is, generally described, as important for economic development, since it boosts job creation, alleviates the tax burden, and provides competitiveness to the economies” (Naudé, 2008).

Currently, two main models that seek to explain the correlation between “Entrepreneurship” and “Economic Development” can be identified. These are: the Wennekers and Thurik model (1999) and the GEM (Global Entrepreneurship Monitor) research model. Both put emphasis on the individual, the entrepreneur. Entrepreneurship is, above all, an innovative and proactive attitude. According to these studies, macroeconomic policies to encourage entrepreneurship are a very important factor, but not enough to stimulate economic development through entrepreneurship. It is necessary to develop entrepreneurial qualities in individuals, arousing in them the passion for undertaking. This view is shared by other authors. Murphy (1991) emphasizes that “entrepreneurial talent” is extremely important, influencing in a decisive way the size of companies and the growth of the economy. It is suggested that, in the perspective of the economic growth of a society, “it is very important that the most talented and capable become entrepreneurs” (Murphy, Shleifer, & Vishny, 1991).

Taking all this into account, and considering what has already been said about the concept of “Entrepreneurship”, it seems consensual that entrepreneurs can be a key element in the development of societies. But is it always like this? Effectively there can be what can be called of “bad” Entrepreneurship. Many authors, such as Murphy (1991), Baumol (1990), Acemoglu (1995), Mehluma, Moene, & Torvik (2003) claim that more talented and capable entrepreneurs tend to look for activities that are “more prone to profit, and not necessarily socially more useful” (Murphy, Shleifer, & Vishny, 1991).

The “entrepreneurial capacity” of the individual is then the key factor for a “positive entrepreneurship” in the sense of being a facilitator of the economic and social development of a country or region. Focusing the discussion on this point, how can the entrepreneurial capacities of individuals be improved? “Entrepreneurial skills can be improved through the acquisition of experiences, of schooling (…)” (Holmes & Schmitz, 1990). There seems to be

evidence that the way knowledge is shared is extremely important. “Learning by doing” seems to be the right way to boost entrepreneurial skills. “Entrepreneurship is best apprehended through the variety of educational experiences and real-life experience” (Consortium for Entrepreneurship Education, 2011).

In conclusion, it is fundamental that society in general, and official institutions in particular, actively promote “Positive Entrepreneurship”, which is based on the empowerment of the entrepreneurial capacities of each (and everyone), directing entrepreneurs to sustainable activities and businesses, both socially and economically, but also (and not least) environmental. “Experiences in some countries empirically evidence that entrepreneurship can be improved through, for example, education, culture, entrepreneurship awareness as an occupational choice, and through learning by doing” (Naudé, 2008).

Till next post!

Marco Libório

UWU Solutions CEO / Consultant / Lecturer

blog@marciliborio.me