government entrepreneurship
DESCRIPTION
This presentation describes the role of governments in entrepreneurship. Some good examples are China Taipei, Red China, Malaysia, Singapore and USA. Governments are traditionally seen as very poor in business management. (I think it still is.) But Taipei and Singapore did very well in its role. To a large extent, Red China and its Central Bank are making direct investments not only in currencies, bonds and financial instruments but directly in commodities and businesses. And we should admire the Chinese officials for their courage and risk taking.TRANSCRIPT
Jorge U. SaguinsinAteneo Graduate School of Business
Government Entrepreneurship
Government Entrepreneurship
The new challenge to politics and governance
Seems to be a contradiction; will
government entry into entrepreneurship produce
results?
Governments fare poorly as business managers! (governed by outdated
administrative code books)
A PHL GOCC - Napocor – losing billions – even millions by the hour!
Look at flag carriers and state run businesses – disincentive and unfair competition to private
sector
Central planning in USSR and China
USSR Central Planning of Economy – it failed!
Central Planning
Characterized by huge losses, government
subsidies, and decline in productivity
Government’s roles are to:
• Regulate• Provide policy direction• Provide the ecosystem
conducive to entrepreneurship
Collective farming in Russia caused decline in farm productivity
China’s state run businesses
Is China’s foray into global business good or bad?
Chinese government investment is a driving force in its economic
global dominance
China’s central banks and its investments in business
Government Centers of Excellence
There are bright young passionate technocrats who run their units well;
and are world class
Examples of successful government entrepreneurship:
• Malaysia• Singapore• Taiwan• New York City EDC• Reagan and Bob Clinton
regime in US
Singapore – Century 21 campaign led by Koh Bon
Wee – overseer of Singapore Telecom, Singapore Airlines
and Development Bank of Singapore
“I think that the government’s recognition that more
entrepreneurship is needed for the continued development of the
economy is good..” xxx … for your development then, your relevance depends on whether you are more creative and more innovative” - Koh
Malaysia – Mustapa Mohamed, Minister of
Entrepreneurial Development
“We were charged with promoting entrepreneurship throughout the country. But neither I nor my senior staff
had any idea what entrepreneurship was” -
Mustapa
Taiwan - K. T. Li (father of Taiwan Economic
Miracle)
“The greatest advantage I had as economic affairs minister was I never had a course on
economics” - Li
Li’s achievement for Taiwan:
• per capita GDP of $10,000 (up from $130)
• inflation rate of only 2.2% for the past 50 years;
• fifth biggest foreign reserves• highest GNP growth (9%) of any
country for the last 60 years
Li’s 5 Broad Principles
• The starting point is population control• Never print money you do not have• The government job is to make people
rich (not fight poverty alone)• Timing is more important than
ideology• Create and honour the entrepreneurs
The best economic policy ever invented
“common sense”
The best policy
“Keep bright people out of the government. Keep them in private sector where they
can do good”
Charles Millard in New York City
Economic Development Council
Responsible for the Silicon Alley and New York City Discovery Fund
Responsible for the Silicon Alley and New York City Discovery Fund
“A little bit of money”
“First do no harm”
President Reagan – Reaganomics though
controversial probably saved USA from economic
stagnation
President Ronald Reagan
Important piece of legislation – Kemp Roth Act
Jack Kemp and Pres Reagan (a football player and an actor) brought
back USA to progress
Important provisions of Kemp Roth Act
Main features of the Act are:1.Reduction of tax rates by 25% over three years; 2.Accelerated depreciation deductions; 3.Indexed individual income tax parameters; 4.Exclusion of income of two earner married couple by 10 %;5.Reduction in windfall profit taxes; and6.Expanded provisions for employees stock ownership plans.
President Bob Clinton
Bob Clinton and US economy:
Bill Clinton on Budget Economy
Longest Economic Expansion in US History In February 2000, the United States entered the 107th consecutive month of economic expansion -- the longest economic expansion in history. 22.2 million new jobs have been created since 1993, the most jobs ever created under a single Administration -- and more new jobs than Presidents Reagan and Bush created during their three terms. 91 percent (19.9 million) of the new jobs have been created in the private sector, the highest percentage in 50 years. Unemployment is down from 7.5 percent in 1992 to 4.0 percent in June 2000, and in April the unemployment rate was the lowest in over 30 years. The unemployment rate has fallen for seven years in a row, and has remained below 5 percent for 34 months in a row.The poverty rate has fallen from 15.1 percent in 1993 to 12.7 percent in 1998. That’s the lowest poverty rate since 1979 and the largest five-year drop in poverty in nearly 30 years.
US Budget Deficit under Clinton (with tax cuts)
GDP per capita growth in US (note the cresting at time of Reagan and
Clinton)
Reference:
The New Entrepreneurial Age by Larry Farrell, 2011, Brick Tower Press
Credits
Presented and Prepared by:
Prof. JORGE U. SAGUINSIN
Ateneo Graduate School of Business
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