Entrepreneurship is a revolutionary act. It is the desire to change the world. Creativity and innovation are the basis of entrepreneurship and are fed by everything in a market, from national policies and attitudes towards science and technology, law and intellectual property, democracy and government, ecology and the environment, arts and the media.
Why then do some government deem some forms of creativity favorable and others not so unfavorable, such as artists, political activists, radical scientists and journalists? The answer reflects a market’s maturity and level of economic development.
It is ironic in emerging markets, where social policies are sometimes underdeveloped, that governments favor “mainstream” creative entrepreneurs to create jobs. Meanwhile, they try to restrict or control members of an “unfavorable” creative class. This is a shame because it is the latter who are actually responsible for the cultural soul of a market.
Several emerging markets have achieved astonishing growing rates without considering the indirect impact of these unfavorable creatives. Just today PWC released a report with predictions for the world in 2050. It says Turkey is expected to be the 12th most powerful economy and China will be first. Are we sure the growth of those nations will continue? Will the perceived culture of fear created by intimidation and restriction of such creative personae non-grata sustain their booming economies?
It is no coincidence that the growth of companies such as Airbnb, Kickstarter and ZipCar are directly or indirectly associated with the arts or movements such as Occupy Wall Street or the rise of quiet revolution, says Sara Horowitz, the founder of non-profit Freelancers Union. Airbnb co-founder Brian Chesky is reportedly “rarely seen without a drafting pen and sketchbook in hand.” So suppressing groups such as Occupy or even less organized protests may be counterproductive for the future of successful start-ups.
At a TED conference, Rhode Island School of Design president John Maeda said that those in positions of power in developed countries are often aware that artists will eventually emerge as the new business leaders. “Creativity is more than just filling office spaces with red bean bag chairs, squishy balls, and colorful markers—kid stuff,” Maeda said. “Creativity is an arduous process, one that forces you to be open and think imaginatively. That’s what many businesses want to do. And that’s what artists do.”
Studies cited by Richard Florida, senior editor at The Atlantic and global research professor at New York University, conclude that the creative class, which includes these creative people on the fringes, is economically essential even during periods of crisis.
How then to explain China as the New World power?
Can the same be said of emerging markets? The same places where policies present challenges to the freedom of speech and expression for creative people who are critical of or stand apart from the establishment? As MIT professor in Chinese economy and business Yasheng Huang points out in the MIT Technology Review for China:
The factors that drive a country to grow when its GDP per capita is $500 are totally different from the growth drivers when a country has a per capita GDP beyond $5,000. At $500, you can copy the technology and production methods of other countries and drop them into your economy. Those premium features of a country’s political system, such as rule of law, intellectual property rights, labor rights, and democracy, are not that important. Indeed, they can be a hindrance, because at that low level of per capita GDP, these Western institutions inflict transaction costs rather than facilitate growth.
The factors that increased China’s GDP per capita tenfold in nearly 20 years won’t bring it much further, Yasheng says. Controlling the arts, sciences and access to the internet in a country that fears unfavorable creatives stifles innovation. Indeed, Florida agrees, China might be growing very fast but it certainly lags on innovation and creativity, factors which will hurt it in the long term.
In an article for The Washington Post, leading China investor Xu Xiaoping believes China won’t be innovative for at least 20 more years and will remain a “cloning country” because of the government’s unwillingness to promote creativity and free thinking. Xu reckons China won’t have “artist-entrepreneurs” such as Steve Jobs or Bill Gates in this generation.
That’s also reflected in Turkey, the other star emerging economy.
Turkey, although by no means as politically restrictive as China, is another rising star with a booming economy. GDP per capita has more than tripled in almost 10 years, from $3,553 in 2002 to $10,524 in 2011. Its upward economic trend has seen average an annual real GDP growth rate of 5.2% over the past nine years. The current Turkish government is not yet satisfied. It wants Turkey to be one of the world’s top 10 economies by 2023, with GDP per capita of $25,000, which is just about half that of the US.
Will the same environment of rule of law, intellectual property rights, labor rights and democracy that increased Turkey’s GDP per capita to $10,524 in 2011 propel it to the government’s target? Indeed, the same government has a plan to increase research and development by 2023, according to the OECD Technology, Science and Industry Outlook report, with an additional allocation of $217.4 million to the Scientific and Technological Research Council of Turkey, the main body for organizing national R&D activities. But is pouring money on the issue enough to sustain what The Economist dubs the “Boom on the Bosphorus”?
It may be, but how then to explain Turkey’s other overtures that squelch creativity? Late last month, 2,000 police descended on the campus of Middle Eastern Technical University to block a student protest. The university happens to be among the best entrepreneurial ecosystems in the country, but the government’s actions essentially squashed young people’s right to express themselves, their desire for creativity and essentially created a culture of fear. This government also happens to lead the world in requests for Google to remove content from the Internet and has the most journalists in jail. Is it aware how this impedes its ability to become a top-10 economy and attractive investment destination? This culture of fear created among those unfavorable creatives has not showed up in GDP yet, but it may be in the long run.
These are not just rhetorical questions. Rather, they force a fundamental reckoning about the type of society and economy a government wants to foster. Studies show that there is strong connection between the creative class and levels of entrepreneurship in a region. Arts, design, media and entertainment function “can be a driver of creativity and entrepreneurship across a region,” Florida says.
Courage is the first step of the creative process. By restricting free thinking, especially for those whose existence is based on asking questions, governments prevent this very basic first step. Currently, there is no pressure on emerging economies with astonishing growth rates to make their markets more creative. But they must proceed with caution: What brought their economies to this level won’t carry them into the future.