Nations can be start-ups, too

That is my latest Bloomberg column, here is one excerpt:

The virtues of business startups have led to many a success story. These enterprises start with clean slates. They embody the focused and often idiosyncratic visions of their founders. The successful ones grow faster than their competitors. Even after they become larger and more bureaucratic, these companies often retain some of the creative spirit of their startup origins.

It is less commonly recognized that some nations, including many of the post-World War II economic miracles, had features of startups. For instance, Singapore started as an independent country in 1965, after it was essentially kicked out of Malaysia and suddenly had to fend for itself. Lee Kuan Yew was the country’s first leader, and he embodied many features of the founder-chief executive: setting the vision and ethos, assuming responsibility for other personnel, influencing the early product lines in manufacturing and serving as a chairman-of-the-board figure in his later years.

Other start-ups nations have been UAE, Israel, Taiwan, Hong Kong, Cayman Islands, Estonia, South Korea, and of course way back when the United States.  You will note that many of these examples are imperfectly democratic in their early years, and they do not in every case grow out of it.  And this:

The world today seems to have lower potential for startup nations. This is in part because international relations are more peaceful and also because most colonial relationships have receded into the more distant past. Those are both positive developments, but the corresponding downside is not always recognized, namely fewer chances for reshuffling the pieces.

This is the close:

To paraphrase John Cleese from Monty Python, the startup nation concept isn’t dead, it’s just resting. Whether in business or in politics, the compelling logic of the startup just isn’t going away.

The best chances for future start-ups may be in Africa, around the borders of Russia, and perhaps someday (not now) Kurdistan.  Do read the whole thing.

Comments

Most of the political momentum today is to strip the United States of its Anglo "national start-up" heritage and transform it into something less unique and more antique. As a native of Los Angeles, I'm increasingly reminded of, say, the Ottoman Empire.

Serious question, Steve: why do you stay in LA? Or even in California, for that matter? What's keeping you there?

Why don't you move someplace else that better fits your racial/political preferences?

Same reason as most of them live there: the weather

When I ask that question of LA people who can afford to move they explain how they effectively live inside a nice safe enclave.

Won't the diversity eventually just follow you around wherever you go?

This explains why we should support the political right to secede whenever possible. Texas, New Hampshire(North New Hampshire), Catalonia, Scotland etc.

The list fails to include the most populus and consequential startup nation of the 20C-Pakistan.

Pak...a country of 200 M souls and a GDP less than that of geriatric Greece, with a mere 10M. Lots of Pakistanis here in Greece, where I'm at the moment, but most of them, strangely, unlike Indians, speak little English. I thought they lerned english is skool? I guess not, but I hope they can at least recite the first stanza of the Koran, or else they learned very little indeed.

A boring TC article, but inspired by the article I did learn that FYROM (Macedonia) has a GDP per capita of 14k USD (!) and as an aside what a National Savings Rate is (Gross National Savings, a misnomer): http://www.economywatch.com/economic-statistics/economic-indicators/Gross_National_Savings_Percentage_of_GDP/

And Bangla Desh (more population than Pakistan, I think).

Not quite.
Pakistan 182 million, Bengaladesh 157 million.
Put together, more people than the United States' 317 million.

A good reminder that not all startups succeed.

We are full of failed start-up nations here in Africa...

Slovakia, Czech Republic, Moldavia?

Also, does the Euro throttle or assist start-up culture?

Plus the former Yugoslavia nations, all startups too?

They're more like a law firm splitting up like in the Good Wife. A dissolved partnership.

Why is the most recent startup nation in such bloody civil war?

"South Sudan became an independent state on 9 July 2011, following a referendum that passed with 98.83% of the vote.[17][18] It is a United Nations member state,[19][20] a member state of the African Union,[21] of the East African Community,[22] and of the Intergovernmental Authority on Development.[23] In July 2012, South Sudan signed the Geneva Conventions.[24] South Sudan has suffered internal conflict since its independence; as of 2016 it has the second highest score on the Fragile States Index (formerly the Failed States Index)." Wikipedia

Oil and religion are pretty relevant. But it seems the mess right now is not very well understood.

I don't know what's going on in South Sudan lately, but a long time ago the Nuer of the South Sudan were famous among anthropologists like Evans-Pritchard for how well their "segmentary lineage" family structures facilitated "Me against my brother, my brother and I against our cousin, my cousin and us against the world" conflicts.

For example:

The Segmentary Lineage: An Organization of Predatory Expansion
Marshall D. Sahlins
American Anthropologist
New Series, Vol. 63, No. 2, Part 1 (Apr., 1961), pp. 322-345

Why use generic "Religion"? Are Christian theocratic states or iChristian fundamentalist the insurgents slaughtering, raping and enslaving somewhere?

Too lazy to look up all the details.

My money is on it being full of South Sudanese, with their various foibles that make building a Western style nation state with democratic and inclusive institutions a problem.

Very few countries start with genuinely clean slates. Taiwan is basically the last outpost of the pre-Communist Chinese government while places like Israel, U.S. and Hong Kong inherited their laws and institutions of government from colonial predecessors.

"Very few countries start with genuinely clean slates. "

Sure, but start ups aren't genuinely clean slates either. The founders came from somewhere with some experience.

You mean like South Vietnam?

I agree. I think one reason that economic progress in the world is slowing (aka, the "Great Stagnation") is because the "frontier" is shrinking. The world is becoming smaller. This matters because just as it is easier to start a company with relatively modest capital needs, it is probably more feasible to start a country were existing claims to land and resources are not strong. Consequently the opportunities for experimentation at the national/state level may be declining. Of course, frontiers need not be strictly geographic, and even geographic frontiers can emerge where none was obvious before (e.g., Israel). Still, in the short to intermediate term, the concept of frontier seems to me to be shrinking.

On this thought, it could also be that the start up mentality within a country may decline commensurate with its frontier. For example, it might not be an accident that the U.S. "progressive" era that commenced around 1900 (and thus marked a turn away from the country's start-up roots) coincided roughly with the closing of the U.S. Western frontier.

The Progressives of, say, 1890 onward tended to be WASP descendants of the Founders, along with some Germans and Nordics, who were worried about the drift away from a self-governing Republic that was happening due to increased diversity from immigration, along with plutocracy.

But, yes, the closing of the frontier in 1890 did focus WASPs upon fighting back against Irish urban machine politics and the like.

Please provide at least one reason per putative example in your response.

And shitcan the 'national IQ' business-its garbage.

ps & have you ever even BEEN to PH?

National IQ is garbage only in the minds of mornic liberal cucks.

Yikes. TC has become completely full of himself; and hellbent to kiss every PC arse 'twixt him and the next rung 'o the ladder. This is how Liberty died.

Kurdistan?
Very unlikely an underdeveloped country without any exit to the sea can became a miracle country, unless his neighbors became afluent and friendly.

How is Armenia doing?

I don't know, so I'm asking. Armenia, a tiny landlocked country in a tough neighborhood but with an impressive diaspora, would seem like a best case scenario for an independent Kurdistan.

Armenia isn't doing well. The Armenian diaspora is far wealthier than the Kurdistani, but their borders are closed on two sides and are reliant on Russian military power which they resent (especially when their soldiers go around shooting civilians in Gyumri).

I'm not sure I've been to a country so lop-sided towards its capital. Thanks to diaspora money and Russian investment, Yerevan is the equal of many a European capital. The rest of the country is largely forgotten and has little in the way of natural resources. An interesting metric is that in the 2015-16 season, seven of the nine Armenian Premier League football teams were based in the capital (compare that to neighbouring Georgia where the figure is 3/14). It's similar to how diaspora money and foreign investment has lead to a flourishing, modern Beirut while the rest of Lebanon is left behind.

Kurdistan on the other hand has quite a sought after natural resource. It also has open borders, though how friendly neighbours will be depends on the make-up of an independent Kurdistan. Unlike Armenia, which has trodden the same path for a generation, Kurdistan would start with a clean slate, and if delicately managed they could create a USP of a stable, western-leaning Middle-Eastern nation with a good human rights record.

A lot would need to fall beautifully in place for Kurdistan to truly prosper, but it's potential is far greater than Armenia's will ever be.

Talking about diasporas, Israel was *founded* by a fairly/very wealthy diaspora. Is there a strong correlation between the success of a "startup nation" and the success of it's diaspora?

It would make sense if there is, since the diaspora gives it access to a lot of human and monetary capital.

See Switzerland.

This was precisely the topic in the weekly magazine of Suisse Romande https://twitter.com/lhebdo/status/766186335816253440

The magazine cove is in French but it can be easily translated to "Romande (french speaking) school, manufacturing digital analphabets. Switzerland slowing down progress by deficient coding/data analysis education". While in other regions of the world parents talk about how Steve Jobs did not let his children use a tablet, the crafty Swiss discuss about "we need more coding".

Funny trivia: what's wrong with the line of code in the magazine cover?

That wasn't John Cleese, it was Michael Palin.

"most colonial relationships have receded into the more distant past". Bonkers.

How are the ex-Yugoslav start-ups doing? Is Kosovo an example to us all, for example?
How about ex-USSR? Belarus, maybe.

The acid test will be the successor states when the Chinese Empire breaks up again.

I think most start-ups go bankrupt in the first years...

Slovenia, Croatia, and Montenegro are doing fine. Serbia and Macedonia are muddling through. Kosovo and Bosnia-Herzegovina are meh, but they probably always will be given their composition and nature.

Yugoslavia's fate was sealed the instant Tito died. Its dissolution was inevitable.

Belarus is a stable dictatorship technically in a two-state union with Russia. I expect once Lukashenko retires/dies, Putin will just annex it outright and get it over with.

Will Putin outlast Lukashenko? Who's older/healthier?

Of course, the China miracle will be the gauge for measuring all others. Or was it (a miracle)? Cowen has expressed that there are no miracles, not even China. Adding $9 trillion to annual GDP in ten years is not a miracle? I suppose it's not a miracle if western firms collaborated with China in shifting production to China. Singapore, a Cowen favorite, experienced a 200% increase in GDP during the same period. A miracle? Or is Singapore simply a reflection (beneficiary) of the growth in China, a safe place for China's newly-minted billionaires to store (or hide) their wealth. Vietnam is projected as the next miracle. Is it a miracle if western firms collaborate with Vietnam in shifting production to Vietnam from China (as China enters the new phase of globalization, producing goods for China firms (rather than western firms) to compete with goods produced for western firms (in China, Vietnam, or elsewhere)). Cowen's analogy to start-ups makes perfect sense if the economic miracle experienced by a country is the result of capitalization by firms (western or otherwise) in order to produce goods for the capitalizing firms, the capitalizing firms analogous to the Silicon Valley venture capitalists. Capitalism, it's what makes miracles happen.

Michael Palin, not John Cleese.

Another startup feature of Singapore: the founder had an elite university education, but did not come from the elite class.

Poor comparison. Most startups fail. The human costs of a failed startup, scaled however you want, are far less than that of a failed nation. In other wards, the downside risk is much more consequential.

Absolutely bizarre. Why are these countries "start ups" while the various failed and failing post-colonial states with founders with "idiosyncratic and focused visions" (aka post colonial dictators) aren't? Because TC wants to give a pat on the back (to put it politely) to VCs?

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