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Matt Spoke: Canada needs an infectious new variant of entrepreneurship

Commentary

Walk into any cafe in Palo Alto, California and you’re sure to witness a strange phenomenon. Strange, that is, if you’re coming from Toronto or any other Canadian city. 

Sitting at tables, huddled behind sticker-covered laptops, these are the hubs of entrepreneurs and aspiring entrepreneurs. The whisper you hear around you will be of people talking about their latest idea, the business they started in their Stanford dorm room or celebrating a recent investment from one of the world’s prominent venture capitalists.

Of course, if you hang out for long enough at the corner of King and Spadina in Toronto, you might hear something similar, but you’ll probably be standing there for hours, if not days, first.

For decades, we’ve obsessed about what makes Silicon Valley unique. We’ve tried to replicate it with our own government-sponsored hubs and innovation centres. But for some reason, we still fall short. 

In thinking about this problem, it might be helpful to consider a different perspective. Maybe we’re not creating enough entrepreneurs, because we don’t have enough entrepreneurs, or because they’re not “infecting” enough people.

That might sound stupid, but hear me out.

Over the past two years, Canadians have been harshly educated about the spread of contagions and the occurrence of pandemics. In essence, we’ve learned two things about pandemics:

  1. More people are prone to get infected if they are surrounded by more infected people; and
  2. The spread of an infection has to do with its own level of transmissibility (or as we now know is called its R0)

So let’s apply these lessons, and imagine a world where we build a pandemic of our own design. But instead of spreading a serious illness, we spread a mentality, a mindset, and a perspective. I’m talking about spreading entrepreneurship as a contagion.

Let’s go back to that cafe in Palo Alto. Why are all those entrepreneurs there? Why is it that as a town, it’s likely 10-100x denser in terms of entrepreneurs per capita? 

A few fallacies to dismiss first. No, Americans are not culturally more inclined to entrepreneurship than Canadians. No, Stanford grads are not more intelligent than any grad coming out of a top Canadian university, or any other top American university for that matter. And no, there’s definitely nothing inherent about California that attracts aspiring capitalists.

Is it possible then that Palo Alto is simply living in a constant state of entrepreneurial pandemic? 

I guess the first question to ask is whether entrepreneurship is contagious. Matt Clancy, a senior fellow at the Institute for Progress and a professor on the economics of innovation, took a stab at answering this question in a recent post called Entrepreneurship is Contagious.

Although the question cannot be definitively answered, there’s a strong argument made that entrepreneurs beget more entrepreneurs. Or put differently, a person is significantly more likely to consider a career as an entrepreneur if they know others who have already done so. 

It’s not much of a stretch to agree with this conclusion. I started my first business six years ago, in large part because of the influence of my brother—an entrepreneur. Since then, all I talk about among my family and my friends is my business. My wife has since gone on to become an entrepreneur, two of my closest friends have, and my brothers and I are venturing into new businesses together as well. Not to say that I caused this, but it’s conceivable that entrepreneurship leads to more entrepreneurship.

Canada’s strategy on this issue should seek to understand this social dynamic. Entrepreneurship is not only about education and funding, it’s about the change in personal identity that it causes. Most people don’t identify themselves based on their job, but entrepreneurs absolutely do. It’s so closely tied to their personal life and brand that it rubs off on the people around them.

So what can we do to kick-start this pandemic of entrepreneurship? 

Back to the two lessons we learned about pandemics, we need to: 1) Surround ourselves with entrepreneurs to increase the chance of “infection” and 2) Increase the R0 of entrepreneurship.

On the first point, it’s quite simple. There are 3 things we can do to meaningfully move the dial. 

  1. Keep more of our graduates in Canada, especially coming out of top schools & programs like software engineering at Waterloo or UBC. There are several mechanisms we could look at to accomplish this, including significant reform in our education subsidy programs that would incentivize Canadian graduates to stay in Canada.
  2. Increase our skilled immigration numbers in entrepreneurship. We already have a great track record of recruiting world-class immigrants to Canada to fill labour market shortages in key areas. Let’s make sure entrepreneurship is one of those areas. Some studies have concluded that over 50 percent of startups in Silicon Valley have had first generation immigrant entrepreneurs behind them.
  3. Spotlight and celebrate the entrepreneurs we already have in Canada. We have some incredible success stories to be proud of as a country, but we could do more to elevate their profiles. Some of the biggest celebrity names in the U.S. are not athletes or politicians, they’re entrepreneurs. The more we celebrate these types of people, the more we’ll create a culture that wants more entrepreneurs in its midst.

The second part of this strategy is called “Increasing the R0 of entrepreneurship”

Essentially, when exposed to entrepreneurship, we want people to be more likely to “catch the bug.” There are two sides to this:

  1. Make entrepreneurship seem more attractive, more sexy, more desirable. At our core, we all want to succeed at something meaningful and be recognized for our work. Too often, entrepreneurs suffer in silence. Although we don’t want to gloss over the fact that this is a tough journey—and it’s NOT for everyone—we should do more to glamorise it. The media should profile more entrepreneurs; the government should point to entrepreneurs as examples of Canadian ingenuity; our universities should encourage students to consider entrepreneurship as a viable career path; our celebrities should partner with entrepreneurs to help grow their profiles.
  2. Make entrepreneurship seem less risky and less scary.  This essentially comes down to incentives. Entrepreneurship is a risky journey. You’re more likely to fail than succeed. So when someone is doing the mental math, they’re asking themselves “What do I have to lose? Probably A LOT, because I’ll probably fail” and “What do I have to gain? Probably NOTHING, because I’ll probably fail.” We need to lower the barriers for people taking their first steps down this path and reduce the downside risks where possible. This could include making entrepreneurs eligible for EI if their venture fails or providing tax incentives to individuals taking enormous personal risks to start companies. 

The point of this perspective is not to exhaust every possible policy idea that could positively influence the trend of entrepreneurship in Canada. For what it’s worth, I think the country is already organically seeing a shift in the right direction. But could we move down that path faster and with more intention as a country?

I think we can, and I think we must.

Sean Speer: Will Putin’s invasion of Ukraine finally wake the decadent West?

Commentary

I wrote a column late last year for the National Post marking the thirtieth anniversary of the collapse of the Soviet Union. My main point was that the West’s combination of liberal democracy and market capitalism had been too powerful for the soullessness and inefficiencies of the Soviet system to ultimately keep up. 

But I also warned that it wasn’t self-evident that we still have the collective energy, resolve, and sense of purpose to respond to new and emerging threats. Western decadence may be materially plentiful, but it also makes us increasingly vulnerable to confident, focused, and strong-willed foes.  

I was writing mainly with China in mind. I didn’t anticipate that the foe would be our old Cold War rival, Russia, which as Boris Rassin recently outlined at The Hub, dominated Eastern Europe for several decades through its combination of authoritarian tactics, mechanistic collectivism, and totalizing ideology. 

There’s something striking that Russia’s invasion of neighbouring Ukraine was launched so soon after the major anniversary of the Soviet Union’s demise. It’s as if while we were writing columns commemorating the end of the Cold War, Russian President Vladimir Putin was systematically planning to relitigate its outcomes. 

A revanchist Russia will be alien to those for whom the Cold War is mostly an abstraction. As the passing of time creates growing distance from that tense era, younger generations in Canada and other Western countries have come to lose a sense of both the inherent tyranny of communism and a world marked by conflict and struggle.

Former Prime Minister Stephen Harper warned about this historical innocence in a 2014 speech to a Tribute to Liberty fundraiser. As he put it: “My fear is, as we move further into the 21st century, Canadians, especially new generations, will forget or will not be taught the lessons hard-learned and the victories hard-earned over the last 100 years.”

Harper’s concern is well-founded. After all, more than 40 percent of Canadians were barely born before the Berlin Wall fell in November 1989. Our collective memory and understanding of what he described as a “poisonous ideology” will fade away as older generations pass on. There’s no reason to think that provincial education curricula, which these days seem more focused on faddish ideas than foundational facts, or the broader culture, which has succumbed so much to frivolousness, will reverse these worrying cultural and intellectual trends. 

But the problem isn’t merely about our lack of historical awareness. It’s the deeper drift into decadence that undermines our capacity to withstand major challenges and defend our ideas, interests, and values. The COVID-19 pandemic is a good (or bad) example. 

There was a time early in the pandemic when it seemed like our collective survival instinct would kick in. There was a fleeting moment of national unity, political solemnity, and innovation and dynamism. Early polling in Canada and elsewhere showed that people were prepared to set aside differences, make sacrifices, and do big things. 

Although the extraordinary progress on the vaccines is the most obvious expression of this momentary burst of anti-decadence, it also manifested itself in simple acts like the clanging of pots and pans for health-care workers, a global surge in volunteerism, and a renewed appreciation of the contributions of so-called “essential workers” like grocery clerks, delivery drivers, and long-term care staff. 

The departure from decadence however wasn’t lasting. We soon fell back into the destructive habits of identity politics, sclerotic state action, and cultural shallowness. The persistent yet highly-debatable public health restrictions in Canada and poor vaccination numbers in the United States were a case of our societies snatching defeat from the jaws of victory. 

It now seems clear that the outcome of the pandemic experience won’t be to galvanize our societies out of our collective stupor, but instead to exacerbate the socio-political pathologies that have wrought it. We are bound to emerge from the pandemic more attenuated, more divided, and in turn less capable of confronting future challenges like the next pandemic or responding to geopolitical threats including Russia and China. 

Where do we go from here? We must start by seeing these recent developments with a clear eye. Putin’s excursion into Ukraine is a bet that the West no longer has the wherewithal to stand up to his provocation. There’s no doubt that China is watching closely to see if his bet is right.

If there was ever an action-inducing event, one would think that the first instance of a major power trying to conquer a sovereign nation in 80 years ought to be it. Yet early pronouncements from Western leaders aren’t promising. That the Italians reportedly sought the exclusion of luxury goods from European sanctions is symptomatic of the West’s cultural malaise. 

Let me end with another anniversary of sorts. Late last month, neoconservative thinker Irving Kristol, who passed away in 2009, would have celebrated his 102nd birthday. Kristol used to define the intellectual movement which he helped to found as a group of idealists “who had been mugged by reality.” Western societies must similarly face reality sooner rather than later or risk sliding irreversibly into decline.