I was reading in The Economist that "many of society's ills, from economic stagnation to poor social mobility, could be solved by creating a more entrepreneurial society." The timing couldn't be better as I had been thinking about that very issue lately. Why is it that northern European countries, especially Germanic ones, have for so long had a lower unemployment rate than other countries, regardless of the economic climate ? I believe this indeed has something to do with the fact that northern European people are a particularly entrepreneurial bunch. Not only are they less afraid of taking risks, they are also more individualistic and independent than almost any other cultural group on the planet. Northern Europeans are therefore more likely to be self-employed or to start their own company.
Eight years ago I wrote about individualism vs collectivism and the five cultural dimensions used by IBM psychologist Geert Hofstede to compare working cultures around the globe. The two most interesting dimensions are individualism and uncertainty avoidance.
Individualism is a trait shared by ethnically Celtic and Germanic countries. For instance, North Italy (Celtic) is very individualistic, while South Italy (Greek) is far more collectivist. All non-European cultures are strongly collectivist. Collectivist-minded people like to feel part of a group and are much more likely to become employees or civil servants. That is why in a country like Japan (Asian therefore collectivist), as developed as it is, people will almost always choose to work for a company (the bigger the better) rather than be self-employed. Even professionals like doctors, lawyers and architects prefer to work in shared offices or firms than have their own office as they would in northern Europe.
Uncertainty avoidance is a slightly more difficult concept to grasp. People with a high uncertainty avoidance will take all the measures they can to limit risks and have things under control at all time, trying to foresee any eventuality. They would plan a trip well in advance, booking their hotels ahead and knowing exactly where they would be going. Ideally they prefer to travel in organised tours rather than by themselves. It's safer and more comforting. Individuals with a low uncertainty avoidance will take a last minute flight without knowing exactly where they would be going and adjusting their plans on the spot.
Even legal systems reflect the level of uncertainty avoidance. Roman and Napoleonic legal system (high uncertainty avoidance) trying to codify every possible infringement of the law. In contrast, English common law is much more compact and flexible, privileging a case-by-case approach at the judge's discretion.
Like for collectivism, the "default" (or ancestral) human nature is a high uncertainty avoidance. According to Hofstede's scores, only the Scandinavians, Brits, Irish, Chinese and Vietnamese have a low uncertainty avoidance (the lowest being the Danes). There is surely a genetic factor too, since neighbouring populations (the Dutch, Finns, Southeast Asians) have an average score, and all other nationalities have a high score (even the Germans, who are more Celtic or Slavic in that regard).
When I was a student, I backpacked for a few months around Australia, and I was quite baffled by the fact that out of the hundreds of other backpackers I met, about 40% were English (not British as I only met one Scot and no Welsh), 30% were Dutch (but not a single Fleming), 20% were Scandinavian (mostly Danish), and the remaining 10% covered all other nationalities (mostly Japanese, German, Irish and French with a few occasional American, Canadian). Wherever you go around the world, you will always meet English and Dutch people. They have travel in their blood. The more out-of-the-beaten-track and adventurous the destination, the higher their proportion to other nationalities. I talk from experience, having myself travelled to about 50 countries.
I haven't met a single southern European backpacker in Australia and very few in India or Southeast Asia. I think that tells a lot about the cultural difference between northern and southern Europe. Interestingly, England and the Netherlands have the lowest combined scores for uncertainty avoidance and collectivism. In other words, English and Dutch people are individualistic, independent risk-takers. It is no surprise that they are so entrepreneurial too, and that they spawned vast colonial empires developed almost solely by private entrepreneurs (East & West India Companies) as opposed to state-sponsored expeditions like in the case of France, Spain, Germany or Japan.
Why do you think it is that English colonies fared so well ? Because more people migrated there to populate them ? Yes, but why ? British people having a low uncertainty avoidance, more individualistic and entrepreneurial, they were less afraid of leaving everything behind and migrate to the new colonies to start a new life. They were more successful at it too. In contrast, the Spaniards conquered the Americas in search for gold, silver and precious stones. They were motivated by greed, then usually came back to Spain to spend the fortune they had acquired. Others just went to convert the pagans (religious zeal). The most ethnically European former Spanish colonies today are Uruguay and Argentina, which both have big non-Iberian communities (French, Italian, German), mostly from 20th century immigration (far less adventurous than in past centuries). French colonies were almost only settled by the King's soldiers to protect the state's interests, but didn't attract a lot of immigrants. English colonies were not commissioned by the state, by individual enterprises, and each colony was completely independent from the next.
The Dutch colonisation of South Africa is the one rare other example of a major European colony founded by a group of people just leaving their homeland of their own will to create a new colony of their own without seeking fortune or thinking of extending their country's dominion. Actually the Dutch, Danes and Swedes all had minor colonies in North America that were all later absorbed by the mass of British migrants. This included New Amsterdam (now called New York), and what would become the states of New Jersey and Delaware (New Sweden).
I am convinced that entrepreneurialism, like individualism and uncertainty avoidance, is deeply rooted is one's genes. One cannot choose if he/she is individualistic or not, no more than he/she can choose if he is a risk-taker or not. The ugly truth behind this is that countries where the gene pool has a high percentage of entrepreneur-minded, independent ("self-employed-minded") people will naturally have a lower unemployment in equal circumstances compared to a country of collectivist-minded people with a high fear of risk. This is undoubtedly why northern European countries as well as Canada and Australia, founded mostly by risk-taking entrepreneurs from northern Europe, will always cope better in the adversity than southern European countries (or most non-Western countries). When the economy is bad, employees and civil servants get fired and less people are hired to replace those who retire. You can't lose your job if you are self-employed. You don't have to worry about being hired if you start own your business.
Instead of waiting for a company or the government to recruit them, the 50% of unemployed Spanish youths should try doing something useful and start their own businesses, instead of blaming society or the economy. Unless they just can't because their genes is preventing them, riddling them with fear. But who is to blame then ?
Eight years ago I wrote about individualism vs collectivism and the five cultural dimensions used by IBM psychologist Geert Hofstede to compare working cultures around the globe. The two most interesting dimensions are individualism and uncertainty avoidance.
Individualism is a trait shared by ethnically Celtic and Germanic countries. For instance, North Italy (Celtic) is very individualistic, while South Italy (Greek) is far more collectivist. All non-European cultures are strongly collectivist. Collectivist-minded people like to feel part of a group and are much more likely to become employees or civil servants. That is why in a country like Japan (Asian therefore collectivist), as developed as it is, people will almost always choose to work for a company (the bigger the better) rather than be self-employed. Even professionals like doctors, lawyers and architects prefer to work in shared offices or firms than have their own office as they would in northern Europe.
Uncertainty avoidance is a slightly more difficult concept to grasp. People with a high uncertainty avoidance will take all the measures they can to limit risks and have things under control at all time, trying to foresee any eventuality. They would plan a trip well in advance, booking their hotels ahead and knowing exactly where they would be going. Ideally they prefer to travel in organised tours rather than by themselves. It's safer and more comforting. Individuals with a low uncertainty avoidance will take a last minute flight without knowing exactly where they would be going and adjusting their plans on the spot.
Even legal systems reflect the level of uncertainty avoidance. Roman and Napoleonic legal system (high uncertainty avoidance) trying to codify every possible infringement of the law. In contrast, English common law is much more compact and flexible, privileging a case-by-case approach at the judge's discretion.
Like for collectivism, the "default" (or ancestral) human nature is a high uncertainty avoidance. According to Hofstede's scores, only the Scandinavians, Brits, Irish, Chinese and Vietnamese have a low uncertainty avoidance (the lowest being the Danes). There is surely a genetic factor too, since neighbouring populations (the Dutch, Finns, Southeast Asians) have an average score, and all other nationalities have a high score (even the Germans, who are more Celtic or Slavic in that regard).
When I was a student, I backpacked for a few months around Australia, and I was quite baffled by the fact that out of the hundreds of other backpackers I met, about 40% were English (not British as I only met one Scot and no Welsh), 30% were Dutch (but not a single Fleming), 20% were Scandinavian (mostly Danish), and the remaining 10% covered all other nationalities (mostly Japanese, German, Irish and French with a few occasional American, Canadian). Wherever you go around the world, you will always meet English and Dutch people. They have travel in their blood. The more out-of-the-beaten-track and adventurous the destination, the higher their proportion to other nationalities. I talk from experience, having myself travelled to about 50 countries.
I haven't met a single southern European backpacker in Australia and very few in India or Southeast Asia. I think that tells a lot about the cultural difference between northern and southern Europe. Interestingly, England and the Netherlands have the lowest combined scores for uncertainty avoidance and collectivism. In other words, English and Dutch people are individualistic, independent risk-takers. It is no surprise that they are so entrepreneurial too, and that they spawned vast colonial empires developed almost solely by private entrepreneurs (East & West India Companies) as opposed to state-sponsored expeditions like in the case of France, Spain, Germany or Japan.
Why do you think it is that English colonies fared so well ? Because more people migrated there to populate them ? Yes, but why ? British people having a low uncertainty avoidance, more individualistic and entrepreneurial, they were less afraid of leaving everything behind and migrate to the new colonies to start a new life. They were more successful at it too. In contrast, the Spaniards conquered the Americas in search for gold, silver and precious stones. They were motivated by greed, then usually came back to Spain to spend the fortune they had acquired. Others just went to convert the pagans (religious zeal). The most ethnically European former Spanish colonies today are Uruguay and Argentina, which both have big non-Iberian communities (French, Italian, German), mostly from 20th century immigration (far less adventurous than in past centuries). French colonies were almost only settled by the King's soldiers to protect the state's interests, but didn't attract a lot of immigrants. English colonies were not commissioned by the state, by individual enterprises, and each colony was completely independent from the next.
The Dutch colonisation of South Africa is the one rare other example of a major European colony founded by a group of people just leaving their homeland of their own will to create a new colony of their own without seeking fortune or thinking of extending their country's dominion. Actually the Dutch, Danes and Swedes all had minor colonies in North America that were all later absorbed by the mass of British migrants. This included New Amsterdam (now called New York), and what would become the states of New Jersey and Delaware (New Sweden).
I am convinced that entrepreneurialism, like individualism and uncertainty avoidance, is deeply rooted is one's genes. One cannot choose if he/she is individualistic or not, no more than he/she can choose if he is a risk-taker or not. The ugly truth behind this is that countries where the gene pool has a high percentage of entrepreneur-minded, independent ("self-employed-minded") people will naturally have a lower unemployment in equal circumstances compared to a country of collectivist-minded people with a high fear of risk. This is undoubtedly why northern European countries as well as Canada and Australia, founded mostly by risk-taking entrepreneurs from northern Europe, will always cope better in the adversity than southern European countries (or most non-Western countries). When the economy is bad, employees and civil servants get fired and less people are hired to replace those who retire. You can't lose your job if you are self-employed. You don't have to worry about being hired if you start own your business.
Instead of waiting for a company or the government to recruit them, the 50% of unemployed Spanish youths should try doing something useful and start their own businesses, instead of blaming society or the economy. Unless they just can't because their genes is preventing them, riddling them with fear. But who is to blame then ?
). This corresponds well to the stronger