Why Some Countries Succeed

[Original Post written @http://startupiceland.wordpress.com]

I read this post in New York Times with the title "Why Some Countries Go Bust" and I just finished watching Shawn Achor talk about how we focus so much of our efforts on describing the negative things and topics. I was wondering why did the author not make the title in the New York Times article to focus on the positive aspects of the research work done by the Economist Daron Acemoglu. It is so strange, it is a simple switch in how you look at the world and you pretty much communicate the same story but the reader walks away thinking hey, we should do these things in our country rather than thinking, how we are starting to see America go to dogs or for that matter any country. I guess that is why I would never be a journalist, I want to focus on the positive aspects of any challenge in front of us, it gives me the energy to tackle it and if it is something that is beyond my circle of influence then I try very hard to just smile and move on. I am not saying I am great at it but I am trying very hard to make a habit of it. So coming back to the article, the research work done by Daron categorically outlines why certain elements drive a country to prosperity and some others to poverty. Daron and his collaborator James Robinson, argue that the wealth of a country is most closely correlated with the degree to which the average person shares in the overall growth of its economy. The authors go on to outline that when a nation’s institutions prevent the poor from profiting from their work, no amount of disease eradication, good economic advice or foreign aid seems to help. I wonder how is the current situation is Iceland? Are the institutions preventing people from profiting from their work? I don't know and I am not trying to be political. The reason it is important is that the legal operational framework in an economy needs to be fair. What do I mean by Fair? well, anyone with the product or service should be free to profit from it, there it is I have said it. Profit. Why is this such a bad thing? I believe greater the value from your product or service greater should be you profit potential.

Related articles

• A Positive Mindset and Happy Attitude Help You Succeed at Work (workplacepsychology.net)
• Profit Motive: (brothersjuddblog.com)
• The Not So Common Factors Behind Inequality (economistsview.typepad.com)
• The Rise and Fail of Countries and their Economic Elite (skydancingblog.com)
• Why Nations Fail by Daron Acemoglu and James Robinson - review (guardian.co.uk)

3 Great Global Challenges

I have been a fan of Thomas L. Friedman since I started reading the New York Times and then his books, The Lexus and the Olive Tree, The World is Flat, Hot, Flat and Crowded etc He has a knack to say the things that matter in the simplest of words and gets your brain working. His latest opinion with title "We Need a Second Party" is a classic. Although the message of the article is geared towards the Republican Presidential Candidate run-off, the take away for the rest of us is the challenges that he outlines. These challenges are not America's challenges these are Global challenges, every country, every citizen needs to be thinking about how they are being impacted by these challenges. No longer can we be complacent about our job, or position or title or education thinking that is going to save your future. The challenges are here and you better have a strategy to tackle them. Let me outline what those are:

"The first is responding to the challenges and opportunities of an era in which globalization and the information technology revolution have dramatically intensified, creating a hyperconnected world. This is a world in which education, innovation and talent will be rewarded more than ever. This is a world in which there will be no more “developed” and “developing countries,” but only HIEs (high-imagination-enabling countries) and LIEs (low-imagination-enabling countries)"


Wow! could he be more direct? where do you think Iceland ranks in this HIE vs LIE world? are we really making Iceland ready for the onslaught? believe me the competition is coming whether you like it or not, a billion people in India and China are raring to go, they are more motivated, they work harder and they want to win so badly that their lives depends on it. How can Iceland compete with that?


"The second of our great long-term challenges are our huge debt and entitlement obligations. They can’t be fixed without raising and reforming taxes and trimming entitlements and defense. We absolutely cannot just cut entitlements and defense. That would imperil the personal security and national security of every American. We must also reform taxes to raise more revenues."


I cannot emphasize enough the problem of entitlement, this is an epidemic and it is cancerous. There is only one way to solve this problem, arm every citizen with the tools to create their own wealth and their own future then they stop asking where's my beef. Entrepreneurs and sustainable entrepreneurial ecosystems enable that, are we creating a sustainable entrepreneurial ecosystem here in Iceland? I will follow up with the post on the Icelandic entitlement cost and I have written about the perception challenges in Iceland and Icelandic Governmental Resource Allocation problem. Of course Iceland does not have the problem of a huge defense spending but we have the challenge of very high levels of public debt. That in itself can suck the entire country and the standard living down.


"Our third great challenge is how we power our future — without dangerously polluting and warming the earth — as the global population grows from 7 billion to 9 billion people by 2050, and more and more of them want to drive, eat and live like Americans. Two billion more people who want to live like us? We can’t drill our way out of that challenge, which is why energy efficiency and clean power will be the next great global industry. Real conservatives — like Richard Nixon, the father of the Environmental Protection Agency, and George H.W. Bush, the author of the first cap-and-trade deal to curb acid rain — believe in conserving. The current Republican candidates are so captured by the oil and coal lobbies that they can’t think seriously about this huge opportunity for energy innovation."


Here Iceland has a clear lead, because Iceland is endowed with the gift of natural energy. We need to take the lead on policies that enhance this rather than build walls and stop progress. I am not saying not to take the Environment into consideration, there has to be a balance and we can make policies that enable investments in the Renewable Energy field that does not hamper the environment and leaves it in a better shape than when we found it. It can be done.


What do you think?