Is the United States Losing its Entrepreneurial Edge?
March 16, 2009
Color of course would enhance these 
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As I have travelled the world the last year I have been struck more than once by the fact that many other countries seem to exhibit a much hungrier, edgier entrepreneurship than we now see in the United States. Maybe we have gotten complacent and comfortable with our style of entrepreneurship. It strikes me that it is a much more centralized, corporate led brand of entrepreneurship than I have seen elsewhere. I wrote previously of the retail environment in Egypt where it seemed everyone wanted to serve the tourist industry. I experienced the same in Turkey where everyone was a salesperson selling whatever was available.
Handmade shoes selling for $30 (click to enlarge)
I have spent the last month in Buenos Aires and I am seeing the same type of capitalism exhibited in Argentina. In the retail sector, for example there are no large department stores. The retail is highly decentralized and spread throughout the city at street level. There certainly are a few stores of corporate type ownership with multiple locations but largely the retail seems to be Mom and Pop type stores that occupy their 4-6 meters of street frontage and sell clothing, shoes and all manner of retail goods.
Buenos Aries, a city of 13 million people has many of the type shops that design and produce their own goods. An excellent example is 2S doble sentido, a women’s shoe and accessory store that produces one of a kind shoes and jewelry for women. They sell them out of their single location on Paraguay Street. They occupy a 5-meter storefront and the production is done in the basement. I have attached pictures of the shop and some of the stock. The shoes are very artsy and colorful and really unlike any I had seen elsewhere. I talked to the owner and he told me they had been in business for eight years. The first four were spent making shoes in there home and selling them at arts and craft fairs throughout the city. For the last four years, they have occupied the Paraguay St location.
Many other stores do the same type thing only different type products. They produce clothing, shoes on a totally custom basis.
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In my mind, that is a very edgy, risky form of entrepreneurship. The business owner needs to be able to do all things, assess customer demand and needs, manage and maybe do production, sales and marketing.
The type of entrepreneurship we now exercise in the USA seems quite a bit more controlled and less risky. Corporations following a formula that has been proven elsewhere undertake a lot of growth. Consider GAP, Old Navy, Applebee’s, Nordstrom… they have all developed common products and systems and duplicated them throughout the country.
Have we gotten lazy and risk averse in the good old capitalistic USA? Is this just a natural maturation process? Will countries like Argentina and Turkey find that their business interests will consolidate and centralize as their economies mature? That is a definite possibility for a developing country like Turkey but it is harder to consider Argentina an underdeveloped country. It has a much more mature economy than Turkey and capitalism has been practiced there for a long time.
Another example of this trend in Argentina is the restaurant industry. Other than the ever-present McDonalds and Burger Kings, there is very few chain or corporate restaurants. Yet on every block, there are cafes, pizza joints, parillas (Argentinean beef restaurants) and all other manner of eating establishments. There does not seem to be a need for formulaic, franchised restaurants like those that we see in the states. Again, this seems to be a much riskier type of capitalism.
As I write this, I am on a 17-hour bus to Port Iguazu. Iguazu Falls is the largest falls in South America and is a major tourist attraction. This leads to my final example of Argentinean entrepreneurship- the bus lines… There are 162 bus companies in Argentina! Retiro bus station in Buenos Aries is four city blocks long and has over 150 bus parking places. Buses leave there for all parts of South America. Competition has done an interesting thing. The bus companies offer all manner of services and service levels. You can choose from a cama, semi-cama and full cama service. Full cama is a first class service with hot meals, drinks and a seat that reclines fully into a bed. I was even given a bottle of trademark Malbec Argentinean wine to go with my dinner. I got great nights sleep while I traversed the country.
It seems the good old USA would be ripe for this kind of service. Yet, I think we still have two bus companies that offer the same thing- slightly reclining seats with no meal service. Where are the entrepreneurs on that one?
So, are we losing our entrepreneurial edge? Are we getting lazy and losing the creative entrepreneurship that built our country? If we are, what does it mean in the long run? I do not have the answers to these questions, I am just posing them but they are worth pondering. One hundred sixty two bus companies, that’s right, one hundred sixty two…competing in the same station…all manner of decorated buses, wild colors, whitewall tires, fully reclining seats… think about it…that’s competition, that’s entrepreneurship!
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3 Responses to “Is the United States Losing its Entrepreneurial Edge?”
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That was really interesting John. I think that you’ve made a really valid observation. I am so sick of the corporate model for most things in this country. I would love to see more of this kind of entrepreneurship here. Sounds like your family is all having a really wonderful experience. When will you be back in Wenatchee?
Love, your favorite cousin
Cynthia
John,
Good to hear that your travels are well ! I am sure it is always exciting to see how different cultures and infrastructures do their business. I believe that bigger is not better and also think many companies take the “franchise” approach to growth, which also leaves them open to the domino effect. Entrepreneurs want growth and success but can easily lose sight when trying to compete with the “big” companies…..when really it is the majority of the “big” companies that have lost touch with the consumer. We shouldn’t compete so much with the “big” companies, but just give the consumers what they want.
Good luck on your travels !
Kevin Cox
Coaxsher Inc.
John: Bless you for your astute analysis! We have just returned from 10 weeks in South America and I witnessed the very things you discuss while in Buenos Aires! But, not only there! Brazil is popping with eager entrepreneurs, as well as Peru and certainly, Chile! To some degree, we may have “regulated” ourselves out of the small entrepreneur type businesses on which Amercia has grown. Looking forward to seeing you soon! Jane