For entrepreneurs to thrive there is a lot that needs to go right… that “lot” is composed of things like funding, clients, product and services offering, timing in market, business management abilities, employees, security etc. For that to happen they need as much support as possible. Support in the shape of incubators, mentoring, accelerators, funding, sponsoring, lenient supplier conditions (i.e. not 90 days wait for payments), subsidised offices (to keep costs down), etc.
That there are great big corporations keen on providing this is actually a miracle for it really only serves these organisations in the long run. There is virtually no real benefit in the short run for them to do so (it certainly would provide less headaches to just buy from other big guns in business).
So for large corporates to want to think for the long run – something that is becoming more and more challenging as each day passes (think shareholder pressure) – the business environment that they live in should be conducive for them to do so.
Take Switzerland for example. Hate the swiss as much as you want, but one thing they got right is creating one of the world’s most boringly predictable governments. Barring any major shock, you can plan your tax structures, subisidies, incentives etc for many years to come and accordingly make plans. In a country where the future is unknown organisations will tend towards more opportunitistic investments and short term transactions instead of building a long term supply chain and investing structurally for the benefit of all. This is not of course something anyone will admit to (it would be PR suicide to do so).
This is why I get frustrated when ministers change and chop the regulatory environments or create a concern in the business world about consistency and predictability. It influences companies to really do nothing more than pay lip service to developing the economy and entrepreneurs vs truly doing so in the hope of building an amazing supply in the long term of businesses to work with.
Of course this is a generalisation. Different industries have different requirements, and still – in my experience – most larger corporates put much more effort into creating an amazing ecosystem in which entrepreneurs plug in when they are not concerned about the future.
And of course different corporations have different requirements. Ones whose HQ is in a particular country will tend to invest more in their surroundings ecosystems than visiting ones. Extractive industries (mining, agriculture) by their nature are invested in the longer term. Some – for example Unilever – who have spent substantial time and money in gaining market share in a country – will also tend to be less opportunistic in their behaviour.
And still – my experience on the ground is that real entrepreneurial ecosystems that are also effective – really only start transitioning from lip service and symbolic setups to really powerful setups once long term fears are addressed (for example, the South African fantastic Innovation Hub in Pretoria).
That political winds change is normal. It happens in any country. But political appointees need the maturity to realise that they role is not in changing the course of their ships overnight but rather to make small corrections to improve the course of the ship. Too many a times I have seen how politicians act like newly appointed CEOs who try in the first 100 days to leave a big impact… Fine if you are running a commercial entity, but very risky if you are running national interests.
Boring is also important in terms of allowing institutional knowledge to form. The headaches involved in having to put together, communicate and educate the entrepreneurial population about how to setup a company, what the tax requirements are, etc after each change make it an enormous waste of time and resources for people wishing to start a business. Boring is healthy because it means more people know “how to do something” and as such provide a broader base of accessible knowledge where formal training is difficult to provide.
Boring is also good because it allows everyone to know what the rules of the game are. Changing rules (e.g. BEE scoring, etc) creates confusion and friction when it comes to understanding the value of support structures. Who wants to invest heavily into supplier development programmes if one is not sure if they will still apply 5 years from now (and I am talking purely from the regulatory side – not the ethical argument that it is crucial for growth to support entrepreneurs).
My favorite corporate example of boring was the company ABB. A global conglomerate employing 140.000 employees with a headquarter of less than 1% of that employed at headdquarters. Their processes and procedures means that (theoretically) everyone knows how things work and thus the system is much smoother for the conduit of their business.
Boring is processes and procedures. Boring is systems and guidelines. Boring is knowing what is set in stone and what is open to innovation.
Here’s to boring! One of the most beautiful things you can call a country. 🙂