Entrepreneurship and Workaholism - Part I

Written by Sam Vaknin

The Dutch proudly point to their current rate of unemployment at less than 2%. Labour force participation is at a historically high 74% (although in potential man-hour terms it stands at 62%). France is as hubristic with its labour policies -repparttar 35 hours week andrepparttar 132297 earlier reduction in employers' participation in social contributions. Employment is sharply up in a host of countries with liberalized labour markets - Britain, Spain, Ireland, Finland. The ECB brags that employment inrepparttar 132298 euro zone has been rising faster than inrepparttar 132299 USA since 1997.

This is a bit misleading. Euro zone unemployment is far higher and labour force participation far lower than America's. The young are especially disadvantaged. Only Britain is up to American standards. The European labour market is highly inefficient in matching demand and supply. Labour mobility among regions and countries is glacial and generous unemployment benefits are a disincentive to find a job.

Reforms are creeping intorepparttar 132300 legislative agendas of countries as diverse as Italy and Germany. Labour laws are re-written to simplify hiring and firing practices and to expandrepparttar 132301 role of private employment agencies. But militant unions - such as Germany's IG Metal - threaten to undo allrepparttar 132302 recent gains in productivity and wage restraint.

The European Commission - a bastion of "social Europe" - has just equalizedrepparttar 132303 rights and benefits of temporary workers (with more than 6 weeks of tenure) and full-time ones. Yet another reformist adviser torepparttar 132304 Italian Minister of Labour was assassinated. This was followed by a million-workers strong demonstration in Rome's Circo Massimo against minor reforms in firing practices.

Butrepparttar 132305 most successful and efficient labour market inrepparttar 132306 world, inrepparttar 132307 States, is associated with a different ethos and an idiosyncratic sociology of work. The frame of mind ofrepparttar 132308 American employee and his employer is fundamentally at odds with European mentality. In Europe, one is entitled to be employed, it is a basic human right and a public good. Employers - firms and businessmen - are parties to a social treaty within a community of stakeholders with equipotent rights. Decisions are reached by consensus and consultation. Peer pressure and social oversight are strong.

Contrast this withrepparttar 132309 two engines of American economic growth: entrepreneurship and workaholism.

The USA, according torepparttar 132310 "Global Entrepreneurship Monitor", is behind South Korea and Brazil in entrepreneurial activity prevalence index. But 7 percent of its population invested an average of $4000 per person in start-ups in 2000.

A 10-country study conducted in 1997-9 by Babson College,repparttar 132311 London School of Business, andrepparttar 132312 Kauffman Center for Entrepreneurial Leadership found gaping disparities between countries. More than 8 percent of all Americans started a new business - compared to less than 1.5 percent in Finland. Entrepreneurship accounted for one third ofrepparttar 132313 difference in economic growth rates amongrepparttar 132314 surveyed countries.

Entrepreneurship is a national state of mind, a vestige ofrepparttar 132315 dominant culture, an ethos. While in Europe bankruptcy is a suicide-inducing disgrace bordering onrepparttar 132316 criminal - inrepparttar 132317 USA it is an integral and important part ofrepparttar 132318 learning curve. Inrepparttar 132319 USA, entrepreneurs are social role models, widely admired and imitated. In Europe they are regarded with suspicion as receptacles of avarice and non-conformity. It is common inrepparttar 132320 States to choose entrepreneurship as a long-term career path. In Europe it is considered professional suicide.

Inrepparttar 132321 USA, entrepreneurs are supported by an evolved network of financial institutions and venues: venture capital (VC), Initial Public Offerings (IPO's) in a multitude of stock exchanges, angel investors, incubators, technological parks, favourable taxation of stock options, and so on. Venture capitalists invested $18 billion in start-ups in 1998, $48 in 1999, almost $100 billion in 2000.

Migration and Brain Drain - Part II

Written by Sam Vaknin

Politicians in some countries decry this trend and deride those emigrating. In a famous interview on state TV,repparttar late prime minister of Israel, Yitzhak Rabin, described them as "a fallout ofrepparttar 132295 jaded". But in many impoverished countries, local kleptocracies welcomerepparttar 132296 brain drain as it also drainsrepparttar 132297 country of potential political adversaries.

Emigration also tends to decrease competitiveness. It increase salaries at home by reducing supply inrepparttar 132298 labour market (and reduces salaries atrepparttar 132299 receiving end, especially for unskilled workers). Illegal migration has an even stronger downward effect on wages inrepparttar 132300 recipient country - illegal aliens tend to earn less than their legal compatriots. The countries of origin, whose intellectual elites are depleted byrepparttar 132301 brain drain, are often forced to resort to hiring (expensive) foreigners. African countries spend more than $4 billion annually on foreign experts, managers, scientists, programmers, and teachers.

Still, remittances by immigrants to their relatives back home constitute up to 10% ofrepparttar 132302 GDP of certain countries - and up to 40% of national foreign exchange revenues. The World Bank estimates that Latin American and Caribbean nationals received $15 billion in remittances in 2000 - ten timesrepparttar 132303 1980 figure. This may well be a gross underestimate. Mexicans alone remitted $6.7 billion inrepparttar 132304 first 9 months of 2001 (though job losses and reduced hours may have since adversely affected remittances). The IADB thinks that remittances will total $300 billion inrepparttar 132305 next decade (Latin American immigrants send home c. 15% of their wages).

Official remittances (many go through unmonitored money transfer channels, such asrepparttar 132306 Asian Hawala network) are larger than all foreign aid combined. "The Economist" calculates that workers' remittances in Latin America andrepparttar 132307 Caribbean are three times as large as aggregate foreign aid and larger than export proceeds. Yet, this pecuniary flood is mostly used to financerepparttar 132308 consumption of basics: staple foods, shelter, maintenance, clothing. It is non-productive capital.

Only a tiny part ofrepparttar 132309 money ends up as investment. Countries - from Mexico to Israel, and from Macedonia to Guatemala - are trying to tap intorepparttar 132310 considerable wealth of their diasporas by issuing remittance-bonds, by offering tax holidays, one-stop-shop facilities, business incubators, and direct access to decision makers - as well as matching investment funds.

Migrant associations are sprouting all overrepparttar 132311 Western world, often atrepparttar 132312 behest of municipal authorities back home. The UNDP,repparttar 132313 International Organization of Migration (IOM), as well as many governments (e.g., Israel, China, Venezuela, Uruguay, Ethiopia), encourage expatriates to share their skills with their counterparts in their country of origin. The thriving hi-tech industries in Israel, India, Ireland, Taiwan, and South Korea were founded by returning migrants who brought with them not only capital to invest and contacts - but also entrepreneurial skills and cutting edge technologies.

Cont'd on page 2 ==>
ImproveHomeLife.com © 2005
Terms of Use