Deploying the Soldier-Entrepreneur

Earlier this week, President Obama announced his decision to send 30,000 additional troops to Afghanistan by mid-2010. The president chose to address the nation from the U.S. Military Academy in front of a large audience of West Point cadets.

While there is still much to be done in the multi-front war against terror, it’s time to start thinking bigger—about the role that those cadets and an entire generation of conflict-tested American military personnel will play. This applies not only on the battlefield, but also in the boardrooms of tomorrow; not simply as an expression of patriotic gratitude, but rather as a conscious strategy of economic pragmatism backed by emerging research.

In their fascinating new book, "Start-Up Nation," authors Dan Senor and Saul Singe trace the roots of Israel’s economic miracle to the entrepreneurial and improvisational skills developed by its citizenry through compulsory service in the Israeli Defense Force (IDF). Because of Israel’s reserve-dominated, horizontal military structure, its soldiers are often required take more initiative at lower ranks and are forced to multi-task to overcome a scarcity of manpower.

Senor and Singe propose that this hands-on entrepreneurial training explains, in part, how a nation of only 7.1 million people could attract close to two billion in venture capital investment and boast more NASDAQ-listed companies than any country in the world other than the United States. Israel’s innovation economy has consistently gained share in the global market despite the world’s recent financial crisis and the domestic chaos of security operations in the Gaza Strip and Lebanon.

Perhaps most importantly is the authors’ contention that when Israeli soldiers complete their service, a personal network of close-knit entrepreneurs is often just a phone call away. It is this last-mile piece of marrying future soldier-entrepreneurs to sources of available capital and coaching that is so critical.

The challenge in the United States is partially one of awareness stemming from a declining public profile of veterans in positions of civilian and business leadership.

Within Congress, for example, veterans have been under-represented since
1994 compared to that body’s historical makeup. Duke University’s Dr.
Peter Feaver refers to the trend as a "veterans deficit." According to Feaver, the opposite condition existed throughout most of the 20th century as the percentage of veterans in Congress was 10 to 15 percent higher than among the same age group of men.

But all of that may be about to change with an influx of new leaders rich in hands-on leadership experience, often with significant consequences, fresh from the conflicts in Iraq and Afghanistan. Much like their Israeli counterparts, the tempo and lighter footprint of U.S.
military operations of the last eight years has often required improvisation and creativity.

At the same time, entrepreneurs have been facing their own set of unique challenges stemming from the global financial crisis. Author Nicholas Taleb popularized the term "Black Swan" to characterize the randomness and uncertainty of the recent financial system failures. The term refers to the 17th century discovery of black swans in Australia, debunking the Western misconception that all swans were white.

Taleb’s premise that extreme, improbable events are, in fact, surprisingly common, reflects the recent experiences of both our soldiers in Iraq/Afghanistan and free-market participants. Little evidence exists that operating conditions will become less complex for business leaders given a prolonged period of restrictive lending, capital scarcity, increased regulation, and encroaching state capitalism.

Therefore, training a new generation of entrepreneurs will require preparing them for the unexpected and stressing the importance of being able to make do with the tools at one’s disposal. This reality does not diminish the importance of essential skills acquired in America’s MBA programs. Rather it points to the vast economic promise of an expanded resource pool of talented veterans, skilled in encountering the unknown and making difficult leadership decisions based on incomplete information.

President Obama said in his speech at West Point on Tuesday night, "We failed to appreciate the connection between our national security and our economy," referring to the impact of deficit spending. However, there is another important connection: Seated in the audience were the resources to both preserve the nation’s security and help invent its economic tomorrow.

— Dr. Craig Columbus is a Fellow for Entrepreneurship and Innovation with The Center for Vision & Values