I think this is another example of people in this thread being self-centric. The article is not about Silicon Valley or tech start-ups at all. If you think that, then the conflation is happening in your head with the definition of ‘start-up’. Here is how the article defines start-up: “The typical start-up is a company capitalized with about $25,000 of the founder’s savings that operates in retail or personal services.”

Realizing that fact should make it easier to see that there is no conflation occurring between Africa and Silicon Valley. Here is the Africa & South America quote:
“…as the source of economic value shifts from activities where self-employment is more common, such as agriculture, toward activities where self-employment is less common, such as manufacturing, the proportion of people running their own businesses drops.

So if you want to find countries where there are a lot of entrepreneurs, go to Africa or South America. ”

All he is claiming is that Africa and South America are currently in the agriculture stage, thus you can find lots of start-ups there.

Can you argue that he is conflating Africa’s economy with America’s? I don’t think so, because he points out that they are in different stages of economic development. I think he brings up the whole thing in the first place to try and discredit the ‘small business as a cornerstone of recovery’ idea; after all, if all it took to have a large GNP was lots of start-ups, then Africa and South America would be in a different position. But I honestly don’t know. His arguments are too schizophrenic for me take seriously.

So you’re granting that it’s legit to conflate South American and African subsistence farming and Silicon Valley entrepreneurship?

I think you’re reading more into his words than what’s there. The way I read it, he claims that A) entrepreneurship happens most in a certain type of economic environment, and that B) Africa and South America are in that type of economic environment. Thus, C) if you want to see high percentages of entrepreneurship, look at Africa and South America. (Technically he claims A and presents C, leaving B as an obvious “between the lines” statement. Although, he does this sort of thing throughout the article, and I must trust that the “between the lines” items are true; I wish he was less sloppy and had more citations.) I see nothing -ist here.

He does go on to use the terms “rich” and “poor”, but I don’t see him ascribing any “goodness” or “badness” with any country. If it’s a fact that one country has historically had more economic growth than another and has a higher GNP, then that is simply a fact. This does not make one bad and one good, they are simply different. This is an economics professor talking about economics. He is using data to make and support claims. In a pure economics discussion morality should be (and has mostly been) left out of it entirely. Another example of this is his discussion of the fact that the government throws away a lot of money by letting it be invested in startups with a high chance of failure. He doesn’t bother discussing good and bad, God and Satan, or democracy. He does briefly mention fairness (and seems to indicate that what he feels is more fair is to give money to those best prepared to use it well). He talks economics and he’s trying to maximize the ROI on money the government invests in startups. How well a program maximizes ROI is his only measure of “good” or “bad”. His only bias is toward those who have a better chance of success.

So now I’ll point out again that I think his article is mostly crap. His aim is to remove money from very small startups and instead give it to well established startups that look like they will do well and to those who already have a track record of making successful startups; that’s hardly a group of people that needs assistance, now is it? He also doesn’t seem to fathom that maybe the answer is to put more money into all startups; maybe the current level of assistance isn’t sufficient to get startups over their major obstacles. Maybe the answer is to keep total funding the same, but only allow X slots per year, so that each funded startup gets more help and you don’t flood the market with too many of the same thing.

The whole article smacks of using data to support a pre-conceived notion rather than let the data show you where the problems are and trying to address those problems. My gut feel is that startups are like other organisms and they require many bad ones and false starts in order to create a healthy and diverse population of corporations. But, I’d find data and let it show me the truth, instead of the other way around, before submitting an article about it. :)

Just re-reading comments, and the Africa thing finally got my goat enough to say something.

The comment I called out as racist (or at least hemisphere-ist) is not any more valid because you repeat it. Comparing two kinds of American businesses on analogy with two entirely different economic environments is just stupid, and conflating subsistence farming in a truly desolate economy and entrepreneurship in a first-world context is either actively or passively misleading.

Assuming that a Case Western professor should know and behave better than to actively distorting the conversation with bogus arguments, we have to assume it’s a passive play. The play is (actively) a kind of hyperbole, which contrasts America with Africa and South America (rhetorically conflated into a single “other”). Hyperbole works by taking a slight difference and blowing it up into a huge one. So the slight difference is the difference between big companies and start-ups: the huge one is the difference between America and Africa and South America. So the difference between America and Africa and South America is huge: America GOOOOOOOOD, Africa and South America BAAAAAAAAAAAAD.

And that’s just plain ol’ structural racism. The author probably didn’t even realize he was playing off of racism to make his point.

Smaller companies are *much* more efficient when changing directions.

It’s a simple matter of economies of scale. A large company, is, well, large; you can’t turn a supertanker on a dime, but it’s hugely wasteful to send its cargo on motorboats instead. To call one universally better than the other is just silly.

OTOH, I wonder how knowledge work vs manufacture affects this. Consider the size of Craigslist based on various metrics, f.ex.