No Geography To Passion

By: Dr. Ernesto Sirolli Issue: Global Trade Section: Collaborator Profile

Enterprise, Entrepreneurship and Their Role in The Global Economy

No Geography

There is a direct link between passion and entrepreneurship and between entrepreneurship and the wealth of nations. Prosperous regions throughout the world exhibit the same patterns of economic development, namely, a vibrant entrepreneurial sector supported by a civic culture that treasures the passion, imagination, energy and intelligence of its people.

Entrepreneurship, however, receives scant attention in most countries of the world, with the exception of the occasional rhetorical accolades at election time. In developing countries entrepreneurs struggle from lack of civic and political infrastructures whereas in some of the most advanced industrial societies they labor under the same inappropriate management advice that has been generating 80% business failure rates for the past 50 years.

Civic leaders can assist in creating an entrepreneurial economy. To do so, they have to address both the macroeconomic aspects affecting their regions, in particular the infrastructures necessary for entrepreneurship to prosper, and the microeconomic factors that pertain to the education, facilitation and nurturing of individual enterprises and entrepreneurs.


The wealth of a country depends more on the intelligence of its people than the abundance of its natural resources; more on its civic structure than the fertility of its soil; more on its freedom to invent and create than on the beauty of its landscape. I believe, in other words, that it is applied intelligence, not natural resources, that separate wealthy countries from poor countries. Historically, only those countries that had evolved social conditions favorable to entrepreneurship prospered no matter the original natural resource base of the country.

Natural resources alone will not make Russia prosperous, nor will oil alone create long term wealth for Saudi Arabia. Something else is needed and that is the topic of this article. CIVIC SOCIETY

When I moved from Australia to the USA in 1995, I was given a copy of Robert Putnam’s book Making Democracy Work – Civic Tradition in Modern Italy. The book is a study of how the 20 new Italian regions, created after WWII, established their regional legislature and built, from scratch, regional governments as mandated by the new, post-war, Italian constitution.

Originally designed to find out in the author’s words “why some democratic governments succeed and others fail”, the research brought Putnam face-to-face with the problem of the “meridione” or the chasm between the north and the south of Italy that is one of the most galling regional development issues plaguing modern Italy and the new, unified, Europe.

In studying how the various regions of Italy had implemented their regional governments over a 20 year period, Putnam could not believe the extraordinary difference in outcomes between the “best and worst” regions of Italy. On all 12 indicators of institutional performance used by Putnam the difference between the best and the worst regions of Italy were of such magnitude that some of these regions appeared to belong in a different country altogether. Some examples given brought to light the difference. From one daycare center every 400 children in the best region of Italy, to one daycare every 12,560 children in the worst. From one family clinic every 15,000 inhabitants in the best region, to one family clinic every 3,850,000 in the worst.

Economically, the divide between the north and the south of Italy was nothing but disturbing, with southern cities registering up to 60% unemployment and northern cities having to constantly import manpower to fill capacity. On every indicator, it seemed to Putnam, the differences could not be explained in terms of recent politics, geography, demographics, or economic development.

The root of the differences had to be found somewhere else, namely in the history of those regions and more precisely in the socio-economic foundations that existed long before the unification of Italy and the creation of regional governments.

One thousand years ago, according to Putnam, Emilia Romagna, the “best” Italian region, and Calabria, the “worst”, were equally wealthy. The difference was in who owned that wealth. In the north, free men owned the land, traded freely and governed their own cities. In the south, the rich timber, agriculture, mining and fishing resources were owned by a succession of feudal lords who ruled over an impoverished peasant population, which was both landless and helpless.

The free men of the north developed skills essential to their economic and political survival. They cooperated, they worked together, and they built their own fortified cities to protect themselves and each other from foreign invaders. Because they had to fend for themselves, they had to develop bonds of solidarity and mutual assistance to survive, and in the process they learned to govern themselves, to form trading and commercial associations, banks and mutual aid societies, laying the historical foundations for the modern region that is Emilia Romagna today - the 8th wealthiest region of Europe.

In Calabria, like in most of the south, impoverished and landless peasantry had neither advantage nor opportunity to work with their neighbours. Their only possibility of advancement came from obtaining more or better land from the feudal lord and that could be only obtained at a neighbors’’ expense. In the absence of horizontal solidarity (neighbor to neighbor) survival depended on vertical dependence (ingratiating oneself to the feudal lord), which in turn led to isolation, hopelessness and constant fear.

Poor, fearful of their neighbors, with no possibility of either economic or political advancement, Italian southerners developed unique ways to cope with their predicament. None brought them wealth, but some gave them the short-term satisfaction of achieving summary justice and revenge. After all, it was those people who created, maintained, and still abet the most notorious criminal organization in the world: the Mafia.

Putnam’s work published in 1993, obliged us to recognize the fundamental truth that “civic infrastructures” matter and that the Italian “meridione” is a metaphor for what is happening right now in many other regions of the world.


No Geography In Putnam’s words “for economic progress (to occur) social capital may be even more important than physical or human capital”. Winning the right to political self expression is therefore the first step towards the creation of an enterprising economy and society.

Once the “political” struggle for freedom and individual self determination has been won, like in the case of modern South Africa, then it is possible to address the true opportunity for economic prosperity that lies within the hearts and minds of its citizens.

It is only when free that men and women become entrepreneurs - not subjects on the totalitarian government’s payroll; not employees of international aid agencies or multinational companies; but owners of their own destinies and of their own wealth-generating activities.

This is because in a truly wealthy nation the economy is entrepreneurial, not based on natural resources. But on a multitude of people doing beautifully what they love doing in an environment that both allows and encourages them.

How do we support a multitude of would-be entrepreneurs that want to transform their own drives and talents into wealth generating activities?

What is the recipe for the creation of the entrepreneurial economy and society?


No Geography

The role of civic leadership is to recognize that economic development walks on two legs. The first leg of economic development is well understood and universally implemented.

It is done strategically with the assistance of planners and it concerns itself with the creation of the legal and physical infrastructures that make entrepreneurship possible such as roads, communication, transportation, energy, industrial land, credit, and education. But also the freedom to own property; the freedom to associate; and the freedom to trade.

These are some of the ‘essential infrastructures’ in support of entrepreneurs and we recognize that their establishment is the ‘first’, or foundational, ‘leg‘of development.

But if it is true that a wealthy economy is an entrepreneurial economy then civic leaders have to recognize that infrastructure development, even though essential for entrepreneurship to occur, is not sufficient for entrepreneurs to appear and prosper. The infrastructures mentioned above are like oxygen, a precondition for life to appear, but not life itself.

Life itself is the entrepreneurs who will inhabit and colonize this new world of opportunities.

Dealing with entrepreneurs is different from planning for infrastructures. Actually, according to Peter Drucker: “Planning, as the term is commonly understood, is actually incompatible with an entrepreneurial society and economy. Innovation does indeed need to be purposeful and entrepreneurship has to be managed. But innovation, almost by definition, has to be decentralized, ad hoc, autonomous, specific, and microeconomic. It had better start small tentative, flexible. Indeed, the opportunities for innovation are found, on the whole, only way down and close to events. (…) Innovative opportunities do not come with the tempest but with the rustling of the breeze.”

There is a second leg to economic and community development, which balances the strategic one. This is a bottom-up, responsive leg which captures the motivation and imaginative intelligence of local individuals who wish to engage in bona fide economic activities.

If infrastructure development can only be done strategically, by analyzing community trends and projecting its future needs, responding to entrepreneurs can only be done by becoming available to self-motivated individuals on an as-needed, just-in-time basis.

Universal Will to Better Oneself

There is truly no geography to passion. Once the external condition (the oxygen) is in place, a person’s first reaction is to give wings to their personal wish to grow and to become.

There is a school of economic development that says that it is impossible to adopt the same strategy for economic development in different communities because communities are different.

Maybe the way the hospital is built will differ but pneumonia is pneumonia and it is treated the same way the world over. Maybe the way infrastructures are built has to adapt to local conditions but we have discovered that it is possible to develop a profession of “family doctors of business” worldwide who can beautifully and effectively respond to entrepreneurs no matter where they may be.

There is universality to the human condition. The ‘wish to improve oneself’, the ‘élan vitale’, or ‘wish to grow’ of which philosophers talk, is species wide and is as genetically predetermined as our heart beat.

As soon as conditions permit, healthy people surge with ideas to improve themselves, to do beautifully what they love to do, to feed their families, to create a better world for themselves and those surrounding them.

The ‘second leg’ of economic development has to be built to respond to the creativity and “passion” that is characteristic of the entrepreneurial field. And this leg has to be bottom up and responsive. It has to start with entrepreneurs willing to come forward with their ideas and it has to be tailor-made for them.

Such an infrastructure will be:

  • Confidential because entrepreneurs jealously guard their ideas
  • Convivial because unless the service is free, friendly and companionable they will not use it
  • Competent because entrepreneurs want to learn how to be successful from someone who has done what they are attempting to do

Top down and bottom up, the two legs of development complete and complement each other and propel the economy to sustainability and prosperity.

Ernesto Sirolli is Founder and CEO of the Sirolli Institute. Contact him at 1.877.sirolli or at