It’s Time to Make the Transatlantic Relationship Entrepreneurial
As an entrepreneur, I'm quite interested in business models. One of my objectives as a European Marshall Memorial Fellow was to understand how entrepreneurship works in Americaa —and to figure out how to translate this entrepreneurial spirit to the very different context of Italy. In particular, I hoped that my MMF trip would allow me to observe diverse environments and hear different perspectives. I wanted to know how American small businesses start, how they develop, and above all, how they create a competitive advantage.
The first stop on our trip provided me the general framework to understand this question. In Washington, I learned that membership in the United States Chamber of Commerce is not mandatory for companies, yet there are 3 million member companies. It’s in companies’ best interest to join. In Italy, in contrast, it is mandatory that a business join the Chamber of Commerce, and there are local branches in every municipality. This renders the Italian Chamber less powerful. Instead, voluntary associations like Confindustria and Confartigianato function as more pointed and representative membership groups for companies. This comparison suggests that voluntary association seems to drive innovation. As we've moved through our travels, I’ve learned that entrepreneurialism in America is not confined just to business. In Michigan, I found that entrepreneurship is mainly sustained by non-governmental organizations and philanthropic foundations that provide education and fundraising support.
Indeed, Detroit offers examples like the Eastern Market Corporation for the food sector or the Kresge Foundation which supports entrepreneurs. Detroit is also home to a very important venture capital fund, the Renaissance Venture Capital Fund which is a ”fund of funds” that invests in emerging innovation companies. The criteria they use to choose companies to invest in are threefold: 1) technology risk level 2) market risk level 3) and last but not least, people. Investing in people as a business practice is the biggest American innovation I’ve observed. So how do American enterprises develop? Some of them don’t, I’ve discovered. Lots of them do not survive more than 3 to 5 years. The ones that manage to survive and develop are those that are able to create a concrete competitive advantage. Our MMF travels have shown us many such examples. A sort of "social entrepreneurship" seems to be part of the competitive advantage of many other companies. In North Dakota, for example, the farm I’m now staying at is run by a new generation of land entrepreneurs that are investing in new techniques of cattle-raising. They do not just rely on tradition; they try to anticipate the new needs of customers. A social entrepreneur is one who assumes risk and seeks exchange not just for money, but also to create a good environment for his or her workers, with real returns for the community in which the company is situated. Like America, Italy too is producing a new generation of social entrepreneurs and business-minded people committed to equity. It’s time to get together to share our best practices, to ensure thriving business and social climates on both sides of the Atlantic. In short, it’s time to be entrepreneurial about transatlantic exchange.
Francesca Zecca, Director of PROGETTO ED, is a 2012 European Marshall Memorial Fellow from Italy
The views expressed in GMF publications and commentary are the views of the author alone.