Professor Yesha Sivan
Dr. Robyn Klingler-Vidra
Coller Institute of Venture at Tel Aviv University www.collerinstituteofventure.org
By the 1990s, Hong Kong’s policy-makers felt that local entrepreneurs would need more than an enabling regulatory environment in order to compete in the global market. To bolster the local venture ecosystem, they launched a series of early-stage funding initiatives and created Cyberport and a Science Park. This may seem like government doing to much, in fact we claim it is too little.
Hong Kong, one of the globe’s neoliberal bastions, has been ranked at the top of the Heritage Foundation’s Economic Freedom Index since the 1990s, precisely because of the state’s absence in private market activities.
This reality informs our two-part claim: first, that we learn from the past – governments, be it cities, nations, and regions, should lead in nurturing venture (from basic science, to seeding, to early and late investment). Specifically, government should both take risks as well as benefit from such risk-taking. Second – as we look towards the future – we call for visionary public leadership, by identifying some of the essential attitudes of such leadership.
This approach is anti-laissez-faire. We argue that the role of governments is to take chances; to bet on certain areas, and to push, entice, and encourage venture based on the unique factors of the locale. Leading government does not mean spreading the bets, or fixing the markets – it means betting on winners in a big way. It also means making sure the benefits of such bets come back to the public for further investment (and for offsetting the failures of some of these big bets).
This approach does not mean governments should do it all. Instead, government should lead and let the private market do its thing – namely, open the door for the free market. The motivation, speed, and flexibility of the private sector – even competing players in the same area – work best once the direction is set by government. Hence: the government should lead the invisible hand.
Architecting such venture-leading ecosystems by government is complex and, frankly, still an open question. Is it possible to build government systems and structures that can take the longer view? That, on the one hand, will not be subject to political pressures of four- or five-year terms; and, on the other hand, will overcome fossilization of regimes that drag on and degrade the economies into serving the leaders themselves and not the public they are supposed to serve.
The answer lies in the right combination of visionary public leadership with strong structures and institutions that enable such leadership, protect against it, and facilitate longer-term value creation. This is the art of public visionary governments.
We will explore the necessary role of the state in venture in Hong Kong – a laissez-faire icon whose leadership understands the integral role of a visible hand in venture activity – at the Coller Institute of Venture’s international conference on The Future of Venture on 6 November 2015. CIV2015HK is bringing together top-level policy makers as well as leading academics to discuss best practices as well as future opportunities and challenges in the “Visible hand leading the invisible land.”