Encroaching "corporatism" may be impeding America’s "entrepreneurial culture," suggests Robert J. Shiller in The New York Times (8/18/13). Robert, a Yale economics professor, cites a new book called Mass Flourishing by Columbia economics professor Edmund S. Phelps. Corporatism is a "political philosophy in which economic activity is controlled by large interest groups or the government." The concern is that once corporatism "takes hold in a society … people don’t adequately appreciate the contributions and the travails of individuals who create and innovate."
Whether America is becoming corporatist is open to debate, but Robert thinks President Obama’s drive for government-created "innovation institutes" points in that direction. The institutes, the president has said, would get "businesses, universities, communities all to work together to develop centers of high-tech industries all throughout the United States." He cited a "public-private partnership that he helped start in Youngstown, Ohio," to develop 3-D printers, as a model (link). The problem with this, says Robert, is that "successful companies aren’t usually started this way."
According to a McKinsey study, "from 10,000 business ideas, 1,000 firms are founded, 100 receive venture capital, 20 go on to raise capital in an initial public offering, and two become market leaders." Based on this, "it is easy to doubt … that the odds are favorable for a Youngstown 3-D printer center." On the other hand, Robert likes Obama’s "new crowd-funding initiative," that is "all about finding and mobilizing people who really understand specific, hard-to-prove ideas for important investments." Ultimately, however, he thinks the "system’s success depends on subtle cultural factors," not direct government involvement.