1) @lajump, aka Leslie, rightly pointed out that the private sector has an important role too.  While the government is key to reducing red tape and facilitating start-ups, the Egyptian private sector must help by opening up its networks and taking risks on promising enterprises. “I am ready to put more money in,” Egyptian billionaire and telecom titan Naguib Sawiris told Businessweek.  Recognizing that it was the source of pain, he believes in “spreading” the country’s prosperity.  That will be key in order to protect his own.

2) Celebrate the ones that are there, but make sure that everyone knows about it.  Everyone wants to guide an entrepreneur and tell him or her how to do it.  What about telling the rest of us how he or she did it?  We in the West do it through publications such as Fast Company, Inc. Entrepreneur and entire newspaper sections devoted to the topic.  The same is not true in the developing world.  As a development and media junkie, I’m dismayed by the absence of entrepreneurship coverage in places like Egypt.  The stories of the incredible Egyptian men and women that have launched enterprises have the power others to believe in their ideas.  Perhaps that will inspire them to become entrepreneurs.  Better yet, perhaps it will inspire them to become writers, architects, designers and anthropologists (see earlier post).  Reading about someone turning an idea into reality builds confidence.

Journalism training is a must anywhere, anytime.  In this post-Mubarak era it an opportunity to equip Egypt’s talented reporters with the skills to report on entrepreneurs and entrepreneurship.  Reuters, the Soros Foundation and the European Center for Journalism are organizations doing just that. The fourth estate made all the difference in the French Revolution.  Let’s make sure it does the same in the Egyptian one.

• A year ago, Egypt’s government released figures on the country’s poverty.  It showed that it had reached 23.4 percent, “up from 20 percent the previous year.”
• In June 2010, the United Nations Development Program (UNDP) released its Human Development Report for Egypt.  That report noted that among the country’s unemployed, estimated to be 8 million, “90 percent were under the age of 30.”
• Business Insider has this informative piece about Egypt’s “economic tragedy”, in what it calls “3 simple charts.”

In a special report in 2010, The Economist ran this set of social indicators:

Egypt is more populous and poorer today than it was 20 years ago.  But it is also more literate and connected to the world.  That is good and bad.  Young Egyptians are developing skills and becoming more aware of the opportunities around the world – (and the lack of them in their own country).  You extrapolate.

Increased freedoms would go far to ensure that these youth can access those opportunities.  Expanding entrepreneurship would guarantee it.  As much as Egyptians need and deserve freedom, they need and deserve the tools that will allow them to build vibrant and sustainable businesses.

Endeavor is one of the few non-profits working to do that.  It is working to support “high-impact” entrepreneurs through world-class mentorship and high-level networks.  They are entrepreneurs such as Hind and Nadia Wassef who run Diwan, a boutique bookshop committed to reviving Egypt’s rich literary heritage, Mostafa Hafez, a young techie who creates video games at Timeline Interactive, the company he founded with the belief that Silicon Valley isn’t the only place where innovation comes from and Fatma Ghaly, who as the CEO of Azza Fahmy jewelry, has created a highly-coveted Egyptian designer brand.  These entrepreneurs are shattering perceptions that entrepreneurship in Egypt can’t succeed.

Last year, following the April 2010 Presidential Summit on Entrepreneurship, the State Department launched the Global Entrepreneurship Program (GEP).  ”Focused on supporting and empowering entrepreneurs,” GEP is another program helping Egyptians realize their entrepreneurial potential.  It’s one of the few government programs that doesn’t make me cringe.  That’s because, rather than doling out funds or ideology, it is tapping into its platform to identify entrepreneurs and connect them to mentors and networks in order to help start-ups thrive.  From the looks of the crowds in Tahrir Square, thrive is something Egyptians are hungry to do.

Earlier this week the White House and the Kauffman Foundation announced Startup America Partnership, an initiative aimed to allow Americans to test “new ideas, bring new products to market and generate new businesses.”  Isn’t there a way to replicate and adapt this for Egypt?

Hat tip to @krmaher and @auerswald who have enriched, through their smart and measured Tweets, my experience of the events in Egypt.

Handel was among the first musicians to make it big as an investor and entrepreneur.  His Messiah, a Christmas favorite (love this flashmob clip), gave birth to the oratorio, a clever and cheaper alternative to opera.  Opera, as I learned form this fascinating clip from PBS’s NewsHour, was the invention of artistic souls who no longer wanted to work for the church or nobility, but wanted to break out on their own.  “Opera was the road to independence.”

Opera and rap, more in common than you knew.

TIME notes that “person of the year” isn’t an honor.  It’s recognizing “the person who ‘for better or worse’ had done the most to change the news.”  Past “persons of the year” have included Churchill, Gandhi, Einstein, Hitler, Kenneth Starr and the Ayatollah Khomeini. (Sadly, there aren’t a lot of women).  The magazine’s current managing editor, Richard Stengel, notes (as VentureBeat reports) that Zuckerberg’s selection was based on the fact that his creation of Facebook is “both indispensible and a little scary.”

That’s an important characterization, which extends to Zuckerberg himself.

By all accounts — not just from the hyperbole of The Social Network — Facebook was created as a result of Zuckerberg’s ardent desire to prove himself; to go from being a nobody to a somebody.  Only Zuckerberg knows whether that was motivated by vanity or, worse, anger.  Given that he grew up in an upper middle class home in the United States and attended one of our country’s preeminent educational institutions, it manifested itself into the entrepreneurial sensation that, like it or not, has transformed our lives.  Many others aren’t as lucky.

In Afghanistan, Iraq, Pakistan, Sudan, Yemen and other parts of the developing world, young men without proper educational or job prospects are joining insurgencies or terrorist groups.  Rather than programming code, they’re programming detonators.  Rather than testing beta, they’re testing bombs.  They are young men (and at times women) with tremendous potential, yet little opportunity or options.  Poverty doesn’t leave you with much.

In 2006, New York Times columnist Thomas Friedman explained why Israel was so ill prepared for its war with Lebanon.  He wrote:

“Young Israelis dream of being inventors, and their role models are the Israeli innovators who made it to the Nasdaq.  Hezbollah youth dream of being martyrs, and their role models are Islamic militants who made it to the Next World.”

One is driven by self-determination and opportunity, the other fatalism, or what Richard Boly, Director of the Office of eDiplomacy at the U.S. State Department, describes as entrepreneurship and terrorism.  Entrepreneurship and terrorism he says isn’t so uncommon.   “(They) are two sides of the same coin,” he noted at an event at the University of California this past April. Both are committed to a vision; both endure enormous risk.  “The difference is context.”

The context that allowed Mark Zuckerberg to create Facebook is something that we should celebrate, regardless of whether we think he deserves to be person of the year.  It is one that believes in initiative and supports new ideas.  More importantly, it is one that we should try — not to replicate or impose — but to organically stimulate in the troubled places I listed above.  Afghanistan, Iraq, Pakistan, Sudan, Yemen and other places have Mark Zuckerberg’s waiting in the wings.  The direction in which they fly affects us all.

It’s a pay phone shop — in Japan.  A pay phone shop was the last thing I would have expected to find in the East Asian island nation.  Isn’t it supposed to be the world’s technology capital?  Yet after attending a series of events focused on social innovation, it became clear why this shop exists.

Japan is a very social-order conscience society.  Buses and trains run on schedule. Double parking is non-existent.  Car horns are not used.  One does not eat on the street.  Plastics, paper and aluminum are properly recycled.  Meetings start and end on time.

It is a rigid social order that makes it difficult to imagine social innovation taking shape, however eager a handful of visionary Japanese are to unleash social innovation their country.  Social innovation by its very definition is non-conformist.  It thrives in spaces, through experimentation and iteration — and much trial and error.

Trial and error isn’t something the Japanese are open to.  Almost everyone I spoke to last week commented on Japan’s intolerance for failure and aversion to risk.  “This is a country where you graduate and work for a big firm,” said one participant at an event at Tokyo’s Rikkyo University.  “It is not common for a graduate to start something new.”

Part of that is because banks won’t make small business loans — a common problem in the developing world.  Another is that big firms such as Toyota, Mitsubishi and Sony have provided, until recently, Japanese twenty-somethings with stable jobs.  But as a global economic crisis and an aging problem grips the country, younger people are wondering what lies ahead.  There are fewer openings at firms as their parents, and even grandparents, who are living longer, are opting to stave off retirement.

Where does that leave Japan’s youth?

That is what a number of Japanese gathered around last week to discuss. Interestingly, few were entrepreneurs.  Most were from the country’s development agency, JICA and the big soga shoshas such as Daiwa Securities. Worried about the country’s aging problem and impending financial future, they believe social innovation and social entrepreneurship is a persuasive alternative.  That’s the good news.

The bad news is that they’re also convinced that in order to get social innovation to flourish as it has in the rest of the world, including as they pointed out in China, India and Bangladesh, it will take a lot of persuading a citizenry that is not used to free floating ideas and experimentation.  “The one thing that might change this is if the Japanese see more and more foreigners doing things in social innovation,” said one woman.  “Muhammad Yunus made the Japanese understand microfinance.”

Social innovation and social entrepreneurship in Japan faces more obstacles than opportunities. There is a question of space, which is short supply.  There is a question of funding, which is difficult in a society where investing is scarce — there are virtually no venture capital firms.  But there shouldn’t be a question of drive, motivation or inspiration. Without those three things, social innovation or entrepreneurship simply wouldn’t exist.

So may be a good place to start to unlock Japan’s social innovation logjam is by bringing together recognized social innovators to inspire them.  Who’s in?

Smell

It brought tears to my eyes.  As soon as the astringent yet sugary scent that wafted through the Marriott Karachi hit my nose, my stomach tightened: someone was cooking onions.

I hate onions.  There’s no real explanation for it.  I just do.  And that’s a very big problem for me wherever I go.  The powerful bulb, worshiped by the ancient Egyptians, is the key ingredient in just about every dish everywhere.  That has made ordering in a restaurant tiresome – for both my fellow diners and me.  “Please, no onions,” has become my predictably Pavlovian platitude.  That was no exception in Pakistan.

One cannot escape the scent of onions in the south Asian country.  It, far more than curry, is the basis of Pakistan’s rich and meat-heavy cuisine.  That is why Nishan Channa, a 25-year old MBA student at Karachi’s Institute of Business Administration (IBA), has launched an onion business.

“I’m sorry that you don’t like onions,” Channa said to me as we sat on the maroon, beige and navy striped couches of the Marriott Karachi.  “But you can generate lots of things from onions,” he said with a smile, earnestly trying to convince me to change my mind.

Channa is attempting to generate a business that utilizes “100 percent” of an onion’s resources, producing “zero wastage.”  His idea: first, sell fried onions, a staple in Pakistani kitchens, to local restaurants and hotels.  He’s already started with Karachi’s popular BBQ Tonite, an Olive Garden-esque eatery.  Then, use the peels as biomass fuel to produce electricity and whatever waste that is leftover as cattle feed.

It’s an idea that many others outside of Pakistan have already run with.  That Channa is, in present-day Pakistan, fascinated me.  Agriculture is no longer the country’s main economic driver.  Following the global trend, Pakistan has largely become a service-based economy.  Given nearly 60 percent of the population is illiterate, that strikes me as a problem – perhaps the cause of Pakistan’s problems… But I’ll leave the economists to analyze that.  I’m more interested by Channa’s interest, not in gadgets or, (forgive the cliché), guns, but in onions – and using them to solve the country’s severe energy and economic crisis (see previous posts).

In today’s uber-connected-Social Network-reality TV-obsessed world, young minds are eager, more than ever, to claim their 15 minutes.  Ideas seem to be born not for utility but out of vanity, or worse yet, anger. Channa’s desire to be Pakistan’s Mr. Onion is a welcome contrast to that.  It is a clear signal that practical, perhaps even old-fashioned, solutions to solve Pakistan’s problems exist.  And they do so at the hands of Pakistanis themselves.

Sound

Pakistan hums with machinery.  It is a powerful hum that, in certain instances, drowns out all other sounds.  One barely notices the cacophony of Pakistani families who travel in packs, or hears the ‘Allahu akabar’ of the azan, the Islamic call to prayer, or even the jingles of the brightly colored and elaborately adorned trucks and buses whose hoods are decorated with a belly dancer’s jangled hip scarf.

This potent hum, however, is no white noise.  It is the reverberation of back-up power generators that are found in most Pakistani businesses, hotels, offices and homes.  With persistent outages that can last up to 15 hours daily, self-powered generators are the only viable option, for those who can afford it.  I counted five outages sitting in my five-star hotel one night.  Yes, Pakistan has an energy crisis.

Pakistan’s government has not adequately responded to this crisis.  Rather than repairing outdated power plants that lack capacity production or resorting to alternative and less expensive sources than oil and gas, it has called for a reduction in supply, decreed that “marriage halls will no longer be able to host all-night wedding parties,” and has banned neon signs and brightly-lit billboards.  To be fair, Pakistan is afflicted with a host of other plagues including insurgent violence, unemployment, inflation, corruption, weak governance, and crumbling infrastructure, made worse by this past summer’s devastating floods.

AP photo

Still, without solving the key matter of energy, the country has little prospect of economic progress or defeating the insurgency.  “The shortages have crippled industry and led to rioting across Pakistan,” a BBC report says. Energy: Pakistan’s Catch-22.

Pakistani officials blame tax evaders for the problem.  “Why should Pakistanis pay their taxes,” one citizen told me, “when they have to pay out of their own pocket for the basic services the government cannot deliver?”

While energy is ultimately a government’s responsibility to provide, it needn’t be government’s burden to produce.  There are entrepreneurs that have ideas for solving Pakistan’s energy crisis.  Wasae Shaikh, a scrappy and scrawny 25 year old I met at Karachi’s Institute for Business Administration, is one such person.  Shaikh, a second-year MBA candidate, wants to set up model villages that produce solar and wind energy.  National Geographic sparked his idea.

“I watched this episode about wind farms in Amsterdam,” the trim bearded Shaikh said to me as we stood underneath a large tree in the institute’s courtyard.  He thought, “We’ve got wind here in Pakistan.  The sun too.  We can launch an alternative energy business using solar panels and biomass fuels,” he said pausing to look at me.  “I want Pakistan to be self-reliant. We have to give it a try for our people.  I want to do it for my people.”

Wasae Shakikh's Talentrepreneur shirt caught our attention on IBA's campus

“For my people,” was a refrain I kept hearing from Pakistan’s youth and its entrepreneurs.  Their country may not have enough energy, but they do.  And they’re using theirs to pull Pakistan out of its political and economic abyss.  Young and bright Pakistani entrepreneurs, who have the option to leave, are staying behind to launch businesses, in such fields as textiles and technology, to help their country.  Wasae Shaikh is one example.  In the coming days and weeks I will give you others.  Through their efforts, Pakistan, I believe, will continue to hum, not to the machinery of generators, but the machinery of this generation.

Sight

“Welcome honored donors,” read the banner hanging over the passport control counter at Benazir Bhutto Airport in Islamabad.  That, along with hot, musty air, was my greeting to Pakistan, at 3AM two Sundays ago.  I had arrived, along with my colleagues Phil Auerswald and Sara Shroff to assess Pakistan’s entrepreneurial landscape.

Not far from the banner, there also hung a framed black and white photo of a gaunt man in a dark textured and triangular hat, similar to the one that Afghan President Hamid Karzai sports.  It was Muhammad Ali Jinnah, the revered founder of Pakistan – the land of the pure.  Jinnah established the republic in 1947, after gaining independence from the British and breaking from India.

Jinnah reappeared a half hour later when I entered the lobby of the infamous Marriott Islamabad.  He was there again the next day when we visited the Institute of Business Administration in Karachi.  Jinnah seemed to be everywhere.  The only other place I know of where that happens is… Turkey.  The image of Mustafa Kemal Ataturk, the blue-eyed founder of Turkey, is, like Jinnah’s, ubiquitous throughout Anatolia. Both dominate every government office, school entranceway and public space.

Pakistan and Turkey have a lot in common.  As predominately Muslim nations, both have struggled with secularism and Islam.  Both have had, as a result, numerous military interventions that have overthrown their respective country’s government.  As predominately agrarian societies, Pakistan and Turkey have wrestled with developing their respective economies in order to compete on the global marketplace.  For a long time, it was a tough fight.  Both countries choked under unemployment, debt, run away inflation and rent seekers.  Pakistan still does.  Turkey has broken from that cycle.

It broke as a result of the economic liberalization reforms enacted by late Prime Minister Turgut Ozal in the 1980s.  With less state-control and relaxed trade and banking laws, Turks embraced entrepreneurship.  Overnight, they turned Anatolian cities, more commonly known as “Anatolian tigers,” into textile and manufacturing centers and lifted Turkey’s poor into the middle and upper class.  Today, Turkey holds a seat at the G20 and the UN Security Council.  Despite being continually rejected by Brussels, it has, by the European Commission’s own account, the fastest (and perhaps only) growing economy.  It is an example that beleaguered Pakistan can and should replicate.  It should do so with Turkey’s guidance.

One of Islamabad's main roads

Turkey understands Pakistan’s economic struggles because Turkey once endured them as well. “We have common problems and common solutions,” said Turkish Prime Minister Recep Tayyip Erdogan while visiting Pakistan just last week.  Part of Turkey’s solution is taken directly from Washington in the form of aid.  *Sigh.*  Fortunately, the other part of Turkey’s solution is precisely what Pakistan will help Pakistan develop: investments.

Rather than a money problem, Pakistan suffers from an investment problem.  The money that Pakistanis possess is caged. It’s used to cover day-to-day expenses rather than being used as leverage to create new enterprises and, most importantly, jobs.  Turkey has discussed opening banks in Pakistan, increasing trade and encouraging its private sector to seek collaboration on construction, infrastructure, engineering, energy, agriculture, telecom and textile opportunities.  That is a good start.  But more can be done.  Here are two suggestions:

• From a historical, religious and cultural perspective, Turkish entrepreneurs and investors are ideal role models and mentors for aspiring Pakistanis with start-up ideas.  They can help advise on operating in a Muslim society where entrepreneurship has not traditionally been encouraged or possible, where risk has largely been absent and where failure has always been the kiss of death.  Both countries could develop an entrepreneurship exchange and mentoring program where Pakistani entrepreneurs spend time working in Turkey and Turkish entrepreneurs in Pakistan.

• Turkish investors could establish, along with their Pakistani counterparts, a fund, with manageable interest rates and transaction fees, for Pakistani entrepreneurs.  It is an idea that American venture capitalists would benefit joining as well.  This will help unshackle Pakistan’s paralyzed capital that can then provide the leverage to jumpstart enterprise development and job creation.

It is imperative that Pakistan climb out of its current crisis and into prosperity.  There are signs it is prepared to do so.  The absence of Jinnah’s photo in the sleek and modern offices of the several entrepreneurs Phil, Sara and I met with was the clearest.  Pakistan’s younger generation, while deeply patriotic, is not straightjacketed by the past.  They know that while Jinnah may have been their country’s founder, they are its keepers.  For now, they’re pushing their black and white past aside in order to keep their focus on what could be Pakistan’s abundantly colorful and high-definition future.

Read more: http://www.portfolio.com/views/blogs/entrepreneurship/2010/09/23/clinton-global-initiative-discussion-focuses-on-poor-as-a-market

“(a)lternative forms of employment to be allowed including renting or borrowing state-owned facilities, cooperatives and self employment and that ‘hundreds of thousands of workers’ would find jobs outside of the state sector over the next few years.”

How?  How do Cubans create their own jobs?  We in America love to encourage everyone in the developing world to become entrepreneurs.  But becoming an entrepreneur is far more complicated than just getting an independent taxi license, as CNN reports the Castro government has done.

Where is the financial system and capital market that supports private enterprise?  In China, where entrepreneurship is thriving, it is the state that is backing many of these ventures.  Castro’s government doesn’t seem to be in any position to do such thing.

Where are the supply and distribution chains?  With a tight grip on production, not to mention imports and exports, I’m curious where entrepreneurs will get supplies and to who they’ll distribute their products and/or services.

I’m a huge proponent of for-profit entrepreneurship.  But this piece got me thinking about how for-entrepreneurship’s success depends on government support – specifically through financing, the rule of law or laws that make it is easy to do business.