American Exceptionalism and Business Bravery
Calling into question America's culture of aggressive military and political practices is as old a habit for the rest of the world as the habits themselves are for Americans.
Almost from the very inception of the United States, a pattern of bold, risk-embracing, oftentimes disproportionate actions have dotted the history of our armed forces and our leadership.
This sometimes fearless, sometimes overzealous reputation has, without a doubt, contributed greatly to the nation's success and resilience in the face of danger and decline.
But in recent history, it's also earned American culture the reputation of less-than-intelligent brute, capable of great damage with the smallest (and occasionally the total lack of) cause.
We can discuss the history of American foreign policy at some other point, but when it comes to business, this attitude is reflected with shocking clarity.
Indeed, American business may have an even deeper fixation on dominance at any cost.
It was, after all, the American industrialists of the late 19th and early 20th centuries who were the first non-nobility in modern history to exceed old-world royals in terms of power, assets, and political influence.
Giants like Rockefeller, Morgan, Vanderbilt, Ford, and Carnegie showed the world what capitalism was, what it could do when harnessed by a visionary mind, and, of course, what it was capable of in the hands of narcissistic hubris.
For better or worse, they built the modern economic paradigm... not just in North America but globally.
They set the tone for the 20th century... and the biggest leaps in science, technology, medicine, every branch of engineering, and every measure of social change.
That tradition, although smoothed over and watered down by regulation, recession, inflation, and diversification of technology, remains in our social DNA to this day.
First in War. First in Business.
And right now, it continues to drive American industry.
According to a recent study by Forbes magazine, American entrepreneurs are the most confident in the competitiveness of their country than any other nationality.
According to the study:
Europeans are least confident concerning their countries’ economies, with the largest percentage (36%) classifying them as 'poor'.
They see wealth creation as dependent mostly on small and midsize enterprises (34%), followed by national champions (32%).
They are the most negative about their government, with the largest percentage of Europeans seeing current government policies as a negative for business (67%) and red tape as the top obstacle (39%).
Europeans have the lowest percentage of respondents who believe that their country has a competitive advantage (35%).
This is balanced by the belief of many more (59%) that their companies have a competitive advantage.
European entrepreneurs feel the least admired among all regions (34%).
Asians come in second, with 66% saying their country has a competitive advantage and 68% that their business does. This confidence results from their enthusiasm and energy—generated by emerging onto the world scene after having fallen behind for centuries—the sheer size of their economies, their upside potential, labor costs and the industriousness and education of their people.
Respondents from the Middle East have the least confidence in the competitive advantage of their countries (18%) or companies (4%). They may be suffering the consequences of the so-called resource curse, also known as the paradox of plenty (the plenty in this case consists of the oil reserves in the region) as well as the political upheavals currently engulfing their region.
By comparison, 76% of American entrepreneurs believe that their country has a competitive advantage, and 72% think their business does, according to the survey, which was conducted by Forbes Insights. These are the highest confidence levels among all regions.
So what does this mean to investors?
Well, a great deal actually.
When Resource Breeds Competition
You see, while it's a basic premise that confidence alone gets us nowhere, the fact is, all else being equal, confidence does make quite a big difference.
The two biggest blocks to business ventures getting started (therefore the two biggest blocks to success) are:
- failure to risk on the part of the entrepreneur, and
- failure to risk on the part of the venture capitalist (investor).
Put simply, not trying yields a 100% failure rate. Nothing technical or clinical about it.
For investors, this might seem like a blessing because it would ostensibly weed out bad business ideas more than good ones, but there is absolutely no evidence that proves lack of confidence affects invalid business concepts more than good ones.
What the confidence disparity does show is that people are more likely to take chances in North American than anywhere else.
And since it requires no small effort to simply get a business out of the concept phase, common sense dictates that the extra bit of confidence felt by American entrepreneurs will provide a necessary boost of motivation to get started.
Moreover, the competition this breeds naturally provides even more evolutionary stimulus to young ventures.
Growing the Strong While Killing the Weak
So the end result is that we're blessed with better-funded companies in a more competitive, innovation-hungry environment.
In terms of trading, the relationship is hard to ignore.
More private companies means more public companies. More public companies in a more fertile corporate environment with easier access to financing means a compounded benefit for anybody in the position to trade shares of these companies.
And it shows. The North American markets continue to this day to act as both the rudder and the engine room for the global economy.
And perhaps it's that good old primitive belief in our nation that continues to set us apart.
More than 150 years ago, Mark Twain wrote: “To succeed in life, you need two things: Ignorance and confidence.”
Some have argued that this sentiment is too simple to be profound.
I would argue that it's this very simplicity that makes it not just profound but true.