Fareed Zakaria's new book on post-American world order is a fascinating read. I won't speak to the political ramifications of the new world order that Zakaria outlines, but I was struck by the one important element of America's lingering contribution to the world that he seems to have missed: entrepreneurship. In an era where the role of America in the global economy is increasingly uncertain, I believe that one of our chief and most respected outputs will be entrepreneurialism.
American history is full of stories of great entrepreneurs. Like in many situations, there was a strong self-selection bias. If you were rugged and daring enough to venture across the Atlantic Ocean, you were more likely to be willing to shake things up in society than go along with the status quo. Walter Isaacson's biography of Ben Franklin shows that Franklin – the ingenious inventor, philosopher and writer – was above all a great entreprenuer who combined practical application with commercial instincts. Thomas Edison, still the holder of more US patents than any individual in history, continued in this great tradition throughout the 19th century. Bill Gates, Steve Jobs, Michael Dell and other modern iconic entrepreneurs continue to inspire young entrepreneurs around the globe to pursue the art of the possible.
In recent years, the venture capital industry has tried to institutionalize entrepreneurship and export it. By working with different entrepreneurs in a range of industries across a range of business cycles, VCs try to figure out the formula for entrepreneurial success and impart those lessons on the next generation of young Franklins and Edisons. After 30-40 years of perfecting the recipe, they have begun to export it beyond America's shores. In the last decade, VCs from Silicon Valley and Boston have jumped on airplanes and traveled throughout Europe, Asia and beyond to instill their brand of entrepreneurship, sponsoring venture capital funds in these regions and localizing their company-building lessons and discipline.
China's venture capital industry has exploded, from nothing a decade ago to over $1.4 billion in 2007, with expectations that it will grow tenfold in the next few years. India's story is a similar one, with $1 billion in venture investments made in 2007. A closer look at the firms making these investment reveals American roots. Many of the general partners were educated in America – typically at Harvard or Stanford. Many of the firms contain executives that learned the art of venture capital in America, either as VCs themselves or entrepreneurs at VC-backed companies. And an increasingly number of firms are sponsored or partially owned by American VCs. Kleiner Perkins, Sequoia, Benchmark, Accel, DFJ and many other top-tier venture capital firms have developed subsidiaries or joint ventures in Asia and Europe to practice the art of venture capital (it's still not yet a science!) in those geographies.
Thus, although America's corporate, political and military dominance may be waning – as Zakaria reports – I would argue its entrepreneurial influence is ascending, in an accelerated fashion.