The Power of Technology & the Knowledge Economy

The most recent issue of Institutional Investor (its "40th Anniversary Issue") has a series of interesting perspectives from the pioneers and leaders of the financial world ranging from John Bogle & Warren Buffett to Arthur Rock & Henry Kravis. If you can chase it down, it is quite the interesting read. One of the pieces is from Michael Milken who is on the road to redemption. In the piece he states:

"As financial technology is deployed around the world, it has the potential to reduce poverty and the kinds of tensions that breed terrorism."

The statistic that caught my attention the most was his comparison of Jamaica versus Singapore. He wrote:

"Taking this principle (giving talented leaders access to capital…e.g junk bonds) to the national level, there are only three ways for a country to build human capital: Increase knowledge and skills, improve the quality and length of life so people are more productive or import people with specific abilities. Some countries have done this better than others. Consider the two former British colonies of Jamaica and Singapore. Back when I was in school in 1960, their economies were similar, with a gross domestic product of about $1,900 per person (in current US dollars). But they chose different paths to development. Jamaica centered its economy on agriculture and tourism and today has a per capital GDP of about $3,900. Singapore, which developed its human and social capital and created a knowledge infrastructure, is a modern technology powerhouse with a GDP of more than $30,000 per person."

In the end, it is all about "empowering" the most talented people you can find, whether in entrepreneurship or philanthropy, through both capital and resources. This is what makes the difference in your city, your region or your country. Some view Venture Capital more as a day at the casino with bets spread out across the roulette table. Others view it is the critical enabler of innovation. I like Milken’s final conclusion on his piece on philanthropy (which could also cover VC)…"It always involves more than just writing checks. It takes an entrepreneurial approach that seeks out best practices and empowers people to change the world."

3 thoughts on “The Power of Technology & the Knowledge Economy

  1. Matt:

    As someone contemplating VC as a career, your take on venture capital as a key enabler of economic development and social welfare is obviously very comforting and confirming to me. Assuming Chicago/Illinois officials grasp these principles, what should they be doing that they’re not already to foster more entrepreneurship here? In other words, should they be trying to draw more VCs here or help those who are here in some way? Or should they simply stay out of the way?


    Dean Richardson

  2. I tried finding the issue but wasn’t sure which one it is. What’s on the cover and what’s the publication date?


  3. So what’s Chicago and Illinois doing? Let’s see…
    – Focus on the tourism industry
    – Threaten to tax business revenues and insult the business community with name-calling (something to do with “Gucci-wearing” or whatever)
    – Propose taxing traffic into the Loop

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