The Coming Prosperity: How Entrepreneurs Are Transforming the Global Economy by Philip Auerswald & Timothy Ogden

Published by: Oxford University Press, 2012
Pages: 272 pp
Price: $29.95
Reviewed by Lise Stone

Don’t tell Philip E. Auerswald the sky is falling.

His account of economic, political, and social opportunity, The Coming Prosperity: How Entrepreneurs are Transforming the Global Economy, takes a strong shot against purveyors of doom and gloom. He argues cogently that economics need not continue as a “dismal science,” a term coined in response to the writings of the original worrywart, Rev. Thomas Robert Malthus, who warned in the eighteenth century that human overpopulation would lead to mass starvation. Auerswald points to the global convergence of human capacity for innovation and technology that lowers entry barriers and multiplies opportunities for new products and solutions worldwide. “Bliss? Maybe not,” he writes. “But, on a global scale, we would be foolish to trade the economic possibilities within our reach in the twenty-first century for those of our grandparents.”

Auerswald paints his own sky broadly, in a slender volume whose tone is encouraging and educational, with anecdotes that belie an interest in social prosperity beyond that in the you-can-get-rich-now literature. For Auerswald, prosperity “is a team sport.”  He covers energy, history, politics, terrorism, home gardening, and parenting. He sees business opportunities as the world’s population starts to rub shoulders more frequently and dismisses arguments from those who would try to clamp down borders and halt migration. “Indeed, if anything will keep…Americans from realizing our potential in the twenty-first century, it will be misguided measures taken in the name of protecting our borders that will serve only to attenuate our connection to the coming prosperity.”

Entrepreneurs in the Global Economy

Auerswald, who serves as associate professor of Public Policy at George Mason University and senior fellow at the Kauffman Foundation, presents stories of successful entrepreneurs who have made cell phone businesses in Afghanistan, started a not-for-profit pharmaceutical firm, built an organic farming business in Egypt, and cured two million people of their blindness. Many of these stories came to Auerswald in his capacity as coeditor of Innovations, a journal about entrepreneurial solutions to global challenges, or during talks he has given. The stories convey a sense that these entrepreneurs hope to profit by helping others to improve their lives, especially in parts of the world where development has been slow to reach.

Auerswald is less interested in prescribing successful models than enabling others to devise them. How each entrepreneur succeeds is a matter for that creative individual, playing according to the rules and prices in each market, using available resources and partners. In a place like Afghanistan or Pakistan, he says, that comes not from merely building schools or prosecuting criminals but from creating “an environment in which the most capable people in the society prefer to create rather than destroy.”

Opportunities for Innovation Amidst Disruption

In the United States and the developed world, Auerswald sees a different challenge, with wage stagnation, persistent unemployment, vast inequality, and entire cities unable to recover.

The reason is fundamental: Industries and interests of all types are headed for massive change because of globalization. In the new order, Auerswald says, “if the United States is to grow sustainably, it must do so from its entrepreneurial core rather than its exploitative edge.”  “There is not a single institution more than a decade old,” he writes, “that is not ready to be repurposed.”

Detroit had its comeuppance in 2008, journalism is on the rack, and Auerswald thinks his own field, academia, is overdue for seismic change. “This disruption can be a disaster for existing colleges and universities or an opportunity for genuine reinvention.”  Health care, he says, may be another sphere facing such a challenge.

According to Auerswald, technology will not, of its own accord, save economies, but using it to help solve specific problems should help, in the United States and elsewhere. One specific example may be in energy research. He observes that climate change is the “cursed stepchild of the marriage between technology and innovation that also produced the Industrial Revolution and the substantial improvements in human well-being it ultimately engendered.”

Auerswald not only blames governments for subsidizing coal and oil but also notes that the sheer abundance of the fuels reduces understanding of the real threat of climate change. He views the sharp commodity price rises over the last decade as a positive sign because they will spur incentives to use energy efficiently and develop new sources. The argument requires a strong faith in economics, which Auerswald, a self-proclaimed policy wonk, clearly has.

What the future holds for the global economy, and who the winners or losers may be, Auerswald does not forecast, though he warns against opting out. He believes the focus must shift from short-term gains to a longer view, one based less on profit and more on meaning. He does not shy from arguing that humanistic principles of freedom and democracy have been unleashed around the world during revolutions and uprisings, some using cell phone technology.

Why should the United States take an interest?  “[W]hatever our manifest shortcomings, uncorrected errors, and irredeemable sins, we Americans have a very strong—though I’ll refrain from saying exceptional—record of creating shared value and authentic prosperity… For this reason, for all the importance of America’s democratic legacy, our nation’s greatest distinction ultimately may lie in our history of creating shared economic, rather than political, value.”

Lise Stone is a New York-based writer. She holds an MPA from the Harvard Kennedy School.

STRATEGY MATTERS © No 7
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