Speeches & Remarks

"Entrepreneurship, American Style"
Speech to Børsen Executive Club Gazelle Awards

September 28, 2006

Thank you Leif Beck Fallesen for inviting me here and for what you and Børsen do to highlight the topic that I have the pleasure of addressing today. I am particularly pleased to be here the day before former President Bill Clinton addresses a similar audience in Denmark. Word has it that President Clinton is being paid $300,000 for his speech. I think that is a great precedent for former American presidents and former American ambassadors. I look forward, Leif Beck, to retuning to visit you again in the future years.

I have been eagerly awaiting this opportunity to speak with this impressive and energetic gathering.

As a businessman, prior to my days as an Ambassador, I am aware that one of my primary mandates is to support business interests and promote trade and investment; that trade and investment are the bedrock of good bilateral relations. That’s why, when Leif Beck called me, I welcomed the opportunity to speak on something near and dear to my heart: “Entrepreneurship, American Style.”

This is a topic that has been of particularly acute interest to me while serving in this post since I had to divest myself of seven business entities that I started in the US as a result of our conflict of interest laws. It is also a subject that I have been thinking about since my first visit outside of Copenhagen a year ago this week—to Jutland, to a gathering of the Danish American Business Forum. While, there, I met one of the great recent entrepreneurial success stories of Denmark. Terma, a company that sells sophisticated cutting edge military technology to the U.S. government. That visit made it clear to me that America has not cornered the market on entrepreneurship. Just look at this impressive gathering today. Here we celebrate 1,338 Gazelle-companies, 85% of whom are operated by entrepreneurs, all of whom make a remarkable contribution to the dynamism and innovation of the Danish economy. Each of you follows in the footsteps of some the great entrepreneurs of history;

• from Tycho Brache’s revolutionary developments in astronomy,
• to Peter Bang & Svend Olufsen's achievements in radio and sound technology and design; from Niels Bohr’s advances in physics to Lars Larsens remarkable salesmanship in common home furnishings,
• from Birthe Thygesen's introduction of the great American bagel into Copenhagen,
• to Peter Ingwersen's hot new "Noir" fashion label that was all the rage at the London Fashion Week. Denmark has a long and grand tradition of breeding creative, entrepreneurial thinkers.

I came to appreciate this entrepreneurial zeal when, on a recent tour of Kronborg Castle, I came across an ancient report of the fishmongers at Gammel Strand. A newspaper of the day was reporting the dynamic and energetic entrepreneurial nature of the tradesmen who gathered daily at Gammel Strand to sell their catch, and the paper issued the following enthusiastic report: "last Monday there were no fights at Gammel Strand for the whole day and not a single term of abuse was heard for half an hour.”

With such energetic approach to entrepreneurship, you have created a national economy that is vibrant and sophisticated, but at the same time tolerant and understanding. Not even the world famous cartoon crisis has shaken my belief in that. If anything, the speed with which the Danish business sector reacted to control the crisis and the earnestness with which the average Danish citizen has debated the cultural challenges posed by globalization has convinced me that Denmark has its priorities in order.

But, while Denmark and most other Western commercial countries have great entrepreneurial success stories, you must admit, that in America, the role of the entrepreneur in society and the relationship of the entrepreneur to our culture is something unique.

In America, entrepreneurship is king

Listen to these statistics, in America:

• We have had 19 straight quarters of economic growth. The growth rate was 3.2 % last year, the fastest of any major industrial economy.
• We have created more than 1.7 million new jobs in the past 12 months; and more than 5.7 million new jobs in the last 3 years;
• Of those 5.7% million new jobs, 3.5 million (2/3rds of the total) were created by entrepreneurs, by small businesses, by men and women who have shown a willingness to take risks and turn an idea into a business and a business into jobs.
• Half of the new jobs in America each year are created by companies that are less than 5 years old;
• In America, there are 40 companies that have gone from zero dollars in revenue to 1 billion dollars in revenue in less than 10 years. The closest national rival is China where five companies have achieved such impressive growth.

With these statistics, one can only conclude that there is in America something that is right for entrepreneurs.

Most people in the world have a sense that America is unique in this regard. Soon after I arrived last fall, I visited with a group of students at Aarhus University. These were bright young people who are leaders at that fine school. After a dialogue of an hour or so, I asked them to describe for me in one phrase their feelings towards America. They talked among themselves for a few minutes and reported back that America is the “land of opportunity.” Then they went on to say how they had this picture of America as the land where dreams could come true and ambitions of success could be realized by anyone and everyone.

This is similar to what your Minister of Business and Commerce said not long ago: “I would like to create the American dream in Denmark concerning the entrepreneurial spirit.”

What makes America the “land of opportunity”? What makes America the “land of dreams"? What makes America the “land of the entrepreneur”?

I will propose to you this afternoon three keys in answer of those questions:

Key number one: In America the role of government is to foster innovation and entrepreneurship.

Since the latter part of the 20th century, a succession of American Presidential administrations have seen it as their highest and most fundamental purpose to create conditions that are right for entrepreneurship and innovation to flourish. Ronald Reagan was the first to target this as a primary role of government. “It is not governments,” Ronald Reagan said, “but it is entrepreneurs and their small enterprises that are responsible for almost all of the economic growth in the United States.” Ronald Reagan said that in 1964: as he began his road to the White House.

Since Ronald Reagan, succeeding administrations have clung to this basic notion that government's job is to create conditions that strengthen the environment for innovation. No President has put more emphasis on this mission than George Bush. Since 2001, President Bush's administration has focused on three principles:

1. Creating a business climate that allows innovators to pursue their ideas, through policies on taxes, trade, intellectual property, and tort reform.
2. Cultivating highly skilled workers, through investments in education, job training and immigration policies; and
3. Supporting the advanced infrastructure necessary to support innovation, through investments in research and development, broadband deployment, and advanced technologies.

“The role of government” President Bush said, "is not to create wealth; the role of our government is to create an environment in which the entrepreneur can flourish, in which minds can expand, in which technologies can reach new frontiers.”

This perspective on the role of government is, I would suggest, fairly unique in the world. Of course, ours was a country founded as a culture based on capitalist democracy – as an “extended commercial republic” as Professor Martin Diamond, once called it.

In Europe and much of the rest of the world the historic and traditional role of governments has been something quite different.

The second key to America as the “land of the entrepreneur”: America rewards risk.

Ronald Reagan once said “entrepreneurs are the explorers of the modern era.” America loves explorers. We love adventurers. We love those who give it a try. As one of my other favorite presidents, Teddy Roosevelt, once said about those who take risks, “if he fails, at least (he) fails while daring greatly."

You see, in America, we celebrate the attempt more than we punish the failure.

Thomas Edison came up with more than 900 ways not to invent a light bulb. Orville and Wilbur Wright failed more than 100 times to get that airplane off the ground. I certainly would not compare my own modest success to those pioneers of innovation, but I told you earlier that I had to divest myself of seven companies that I had started. What I did not tell you was that I had started thirteen other companies that failed. You see in America, there is not the same stigma attached to failure as there is in most of Europe.

A business failure is not the end of a person’s career, but rather just another chapter in one's professional development. We admire those who pull themselves up by their hairs and move on. Carl Schramm, the “evangelist of entrepreneurship” who heads the Kauffman Foundation, said on a recent trip to Copenhagen that "in Silicon Valley it is easier to get funding the second time around, after you have failed once.” America and our investment community love risk takers. We love adventurers. You must remember, as David Brooks writing in the International Herald Tribune, recently said, “we in America are the descendants of those who left Europe, those who took a risk and left to start something new.” Thomas Friedman also recently picked up this theme. Quoting the Indian-American entrepreneur Viveck Pauli, Friedman said “the very act of leaving behind your own society is an intense motivator. Whether you are a doctor or gardener, you are intensely motivated to succeed.” Taking risk is in our blood.

The Third key to America as the “land of the entrepreneur”: America celebrates its heroes.

In America, Bill Gates, of Microsoft, Steve Jobs of Apple, Fred Smith of Federal Express, and the self-made millionaire down the street, all are considered heroes. In just about every community there are entrepreneurs “down the street" who have succeeded. In fact, it’s the “ordinary” millionaire down the street who is often the most celebrated, because people think “hey, he’s not half as smart as I am. If he can do it, then so can I.”

America celebrates its heroes. This point was made to me recently by the heir to one of Denmark’s great entrepreneurial legacies: Kjeld Kirk Kristiansen. I visited with Kjeld Kirk at Lego’s headquarters in Billund two weeks ago. We were talking about the unique ways in which America celebrates its heroes. Kjeld Kirk shared with me a story.

He said that over the years fans and customers of Lego’s products have created product conferences and tradeshows where adults, using Lego bricks, gather to showcase their latest impressive creations. He described two recent such shows. One in Berlin, and one in Washington, DC. In Berlin, he said, when he and his senior executives arrived at the conference they were treated as just another guest in the room. Nothing special, nothing unique. He contrasted that with the experience in Washington where, upon his arrival, the 2,000 adult customers who were gathered there treated him as a rock star, as a celebrity, as a hero; gathering around, taking photographs, seeking autographs. He says when he goes to America for a show like this he knows how Elvis Presley must have felt.

America celebrates its heroes. In our country, the newspapers, magazines, TV news are filled each week with stories of innovators, risk takers, adventurers and entrepreneurs; in sports, in science and in business. This week alone, by my count, the New York Times, Wall Street Journal, LA Times, Time and Newsweek, (our five largest print news sources) together had more than 25 prominent stories about entrepreneurs and innovators. I was reminded of what one of your CEOs said to me at the first of a series of dinners for entrepreneurs that I have hosted at the residence since I arrived. “One of the real differences I see when I read your newspapers and ours” he said, “is the way you celebrate your sports heroes.” Another entrepreneur at the dinner, following up on the same theme, responded, “Yes, what we need in Denmark, are more Porsches.” When I asked what he meant, he proceeded to explain to me, for the first time, the Danish cultural tradition of “jantelov”. We discussed the challenges of stimulating hero recognition in a country whose cultural traditions elevated equality over individuality. He told me that he had heard there were only three Porsches sold in Denmark all of last year, and that he yearned for the day when his neighbors are not afraid to buy a Porsche to demonstrate their success.

I heard that interesting comment about the Porsche, and the challenge of elevating individuality over equality just before my visit to Aarhus University. I mentioned that visit to you a few moments ago: where the students told me that in their mind America was the “land of opportunity.” Let me tell you the rest of the story: after they told me that that was their impression of America, I asked them to give me a one-phrase description of Denmark. They caucused among themselves, and then replied that Denmark is “the land of equality.” I asked them: “if you were the American Ambassador and had a message to offer to the political leaders in Denmark what would it be?” They replied, “Urge our leaders to give us the tools to be more innovative, to be more entrepreneurial!” Why is this important, I asked? They replied “because that is what we need to be to remain competitive in a global economy.” I asked them one final question: “are you willing to give up some of that equality, some of that security in order to be more innovative, and more entrepreneurial?”

In a way, their response surprised me and disappointed me. They replied that they “weren’t sure” that they were willing to give up that equality and take that risk. Perhaps I should have asked them if they would like to drive a Porsche!

I certainly don't mean to be cynical about the domestic outlook in Europe for entrepreneurship. There are certainly encouraging signs. In Europe, among young people, “entrepreneurship” is now accorded higher status than has traditionally been the case. Your government is taking the needed steps to stimulate innovation, looking at policies to increase R & D investment, by investing in programs to spur small business growth, and by forming partnerships with innovators and entrepreneurs and capitalists in America.

On Tuesday, at the Dansk Industris annual dinner, I was impressed to hear the Prime Minister say that one of his priorities is to stimulate entrepreneurial activity at all levels—to create the tools to turn good ideas into real businesses. Torben Bager of the Entrepreneurs Academy says he sees a clear tendency that Danes are ready for entrepreneurship. According to Bager, 65% of the population says that the entrepreneurial conditions are good in Denmark, compared with only 27% six years ago. He was quoted recently in Børsen saying: “Denmark is becoming a more innovative and entrepreneurial society. It is a tendency that can be seen in most developed countries. Values of stability and closeness are gone and the individual is pursuing his own happiness. You are no longer tied down by the rules of solidarity and community."

At the American Embassy, we are doing our part to stimulate entrepreneurial ties between America and Denmark.

• We are working with the Defense Ministry and Dansk Industries to increase partnerships and equity investment between Danish companies and America’s defense manufacturers and venture capitalists.
• We are working with the Fashion Institute to promote Danish design and fashion in America’s fashion capitals.
• We are sharing best practices on crop development and animal waste treatment between our agricultural and university sectors.
• We are working with the Danish government to build a Denmark/United States Entrepreneurial Forum with the goal of sharing our best practices in entrepreneurship.

In fact, some might say it is a bit presumptuous for an American Ambassador to lecture Danes on entrepreneurship.

After all, here I am in a country that has the strongest economy in Europe, with a literacy rate of 100%, an unemployment rate of 4.4%; where people are the happiest of any country on earth, enjoy their vacations more than any culture on earth, and consume more California red wine per capita than any nation on earth!

So someone might ask: why is the American Ambassador even talking about this topic of entrepreneurship in Denmark? The answer is this: because it is in our interests that your economy remain strong and vibrant and competitive in the globalized age; because it is in our interests that your creative innovators continue to work to find the next drug that may cure disease, or the next device that may increase efficiency or the next product that may defeat extremism; and …perhaps most of all, it is because I believe that entrepreneurship can become a new idiom of foreign policy, for America and our friends and allies.

When we encourage one to pursue his or her own economic self-interests, for purposes of personal reward and individual achievement, whether that reward is monetary, psychological, charitable, or otherwise, we create a motive and a condition for freedom and political stability to flourish. In this way entrepreneurship can be a new idiom for our foreign policy; not to replace the idiom of democracy and freedom, but to enhance it. We see this idiom taking hold in places like Vietnam where, just a few months ago, Bill Gates was celebrated as a hero in the streets of Saigon. David Brooks made the same point about economic reform preceding political reform in an editorial this week in the International Herald Tribune. Other great thinkers like Carl Schramm have reached the same conclusion.

That is why I am particularly enthusiastic about a project we are working on with your Ministry of Development to foster entrepreneurship, especially among women, in Africa and the Middle East. You will hear more about that in the coming months.

In other words, when we influence cultures to create conditions for entrepreneurship; when we encourage them to create the tools for the realization of economic self-interest, when we create a vehicle for improvished or oppressed citizens to have a personal stake in economic stability, to take risks, to earn rewards, to be treated like heroes;

• we will see the rejection of extremism,
• the abandonment of intolerance,
• the embrace of rights for women,
• and the celebration of individual achievement,
• and best of all, we will see the will for freedom and democracy to flourish.

This is the ultimate hope. This is the ultimate potential for entrepreneurship.

This may be an ambitious vision. Just as you are continuing to encourage your political leaders and your media and your institutions at all levels to boldly support an entrepreneurial culture, this vision will require a similarly courageous approach on the part of diplomats, political leaders, and foreign policy institutions.

And yet, I am convinced, that as cultural attitudes continue to change over time, we will witness an explosion of entrepreneurial activity throughout the world, as the marvelous engine of wealth, growth and prosperity that has driven America’s remarkable economic achievements takes root far from America’s shores; and in the process, turns the "American Dream" into the Danish Dream, and the Chinese Dream, and the Middle Eastern Dream and the African Dream.

Thank you for your commitment to this dream.

Thank you for being "Gazelles" and for your passion for entrepreneurship, and thank you for inviting me to join you this afternoon.