Jerome Engel, senior fellow and founding executive director, Lester Center for Entrepreneurship, and adjunct professor, emeritus, Haas School of Business | July 16, 2022
From Today’s Headlines ….. NYT July 16, 2022
President Yields on Climate Plans as Talks Collapse [page A1]
Trading Coal for Sunlight, Power Plants Get New Life [page A12]
E.V.s Selling at a Record Pace Despite Shortages [page B1]
Do you see a pattern here? Where government is stymied by the self-interest of individual politicians [in this case Senator Joe Manchin III], the market-power of industry and individuals responding to the unrelenting existential global challenge of climate change incentivizes solution-providing businesses move forward. This is an important example drawn from life. This morning, while having my ritual morning coffee and newspaper time, this insight called out for exposition. But is this a robust process or just a one-off fluke convergence of diverse facts?
In my upcoming book. Clusters of Innovation in the Age of Disruption, I argue that indeed the market place can and does respond to external shocks [such as the Covid pandemic, climate change, political instability, etc.]. Further, I argue that this response is strongest in ecosystems where entrepreneurship and innovation are robust contributors. And I recognize that this positive response is best enabled when enlightened governments provide enabling conditions and constructive incentives. These premises are buttressed by evidence gathered from ecosystems around the world.
All well and good you might say. On their face these ‘arguments’ may seem self-evident. Why call them out so boldly? Because on days like today, when it appears that even the most enlightened and well-intentioned policy makers and politicians are impotent in the face of corrupt and self-interested stakeholders, it is an optimistic thought that “wisdom of the crowds” will prevail and private markets can still make progress, while governments preen and plod. We need strong governments, but we need not wait to take action. As investors awaken to “impact strategies”, entrepreneurs experiment with enabling technologies and business models, and consumers make enlightened choices, we can all find a way to contribute.