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7th annual silk road conference

Friday 18 May, 2012

Harry Lepinske, of the Central Asian Productivity Research Center, hosted the 7th annual Silk Road Conference earlier this week at various locations in Chicago.  I was only able to attend the 1st day & moderated the panel discussion on Corporate Governance.

The focus of the morning’s presentations was on global entrepreneurship, a topic dear to my heart.  Michael Hennessy, President Coleman Foundation, Inc., led off.  He 1st explained that his foundation grew out of the Fanny May Candy Company, which led to their support of entrepreneurship education.  They issued their 1st RFP for $25K grants in 1995 & have issued $2.8M since then.  Since individual giving drives philanthropy, foundations only account for 7% of annual giving.  When working with colleges, high schools, & community colleges, they found there are lots of silos which are difficult to bridge.  Little research has been done on entrepreneurship education, but it is driven by students, not faculty.  Entrepreneurship education is no longer a stand-alone subject, rather it’s being integrated into other programs.  Venture capitalists benefit from this education on the back end, so the difficulty is figuring out who should pay for it.  There are many $3-5M foundations which need to be more effective & more checks & balances.  Their biggest issue is how to bring in alumni & collaborators.

Rol Dix of IIT was up next.  He noted that 30-50% of business is conducted in the underground economies in Poland, Italy, Russia, etc. & other countries which comprise 1/2 of the world’s workforce, which can be sources of ideas for entrepreneurs.  Strategic partners help define capabilities in finance, production, marketing, etc. so that entrepreneurs can hit up FFF (family, friends, & fools) for financing.  Think fast rather than slowly, but consider decisions overnight, not impulsively or immediately.

Joe Roberts of Webster University talked about financial components of global entrepreneurship, who simply made a comparison between traditional & entrepreneurial finance & global differences.  For example, some US models don’t work outside of the US, i.e. students doing market research or simply talking to business owners is considered espionage in some countries.  However, while all bankers are risk averse, non-traditional sources of funding like crowdfunding site Kickstarter are available.  Cash mobs can be a challenge in both finance & accounting.

Entrepreneurship in Tajikistan was next from Pulod Amirbekov.  Tajikistan has a 99% literacy rate for it’s 7.6M population which earns $629-716/ per capita.  Tajikistan now better protects foreign investors & the FDI is flowing in, making it the world’s 10th fastest growing economy, with GDP growth of 6.5%

Prof. Mehmet Baha Karan of Hacettepe University in Turkey discussed entrepreneurship there by essentially just presenting Turkey’s economic position.  It’s the 16th largest economy in the world according to purchasing power parity, & #6 in Europe.  GDP/per capita is ~$10K/person & the population is expected to reach 90M by 2030.  Despite a GDP growth rate of 7.5% last year, only 6% of Turks are entrepreneurs.  Bureaucracy, monopolies, intellectual property protection, & difficulties hiring & firing employees are impediments.  2.42 times as many men are entrepreneurs compared to women.  Many are 25-34 years old & 6% have post-graduate degrees.

The last presentation I caught was by Professor Ozlem  Ozkanli, Ankara University on energy in Turkey.  Liberalization & privatization are up, especially in the production & distribution of electricity.  It’s regulated by EMRA.  There is great potential for renewables, hydro, wind, & solar.  Electricity demand is increasing rapidly & constantly.  They have ambitious targets with high investment requirements, to there are investment opportunities there.

I asked my panelists on corporate governance for their presentations, but have not yet received them.   While I was moderating, I wasn’t able to take notes, but the highlights I can remember from the gist of each presentation was:

A. Crossin-Turkey is following the US model generally for corporate governance

D. Rinke-Chinese reverse mergers used to get around foreign investment restrictions are creating corporate governance issues there

T. Myers-believes that the Fed is complicit in protecting investment bankers by protecting their investments while others aren’t protected in the recent bailouts & financial crisis

 

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