Ca r l a Fi o r i o & De b o r a Fe r r e r o

H U M A N S P I R I T S A N D
E N T R E P R E N E U R S H I P
C U L T U R E
Carla Fiorio is a journalist and expert on economic and
entrepreneurial dynamics, and has treated more than 40
publications of statistical analysis with special focus on
industrial clusters. She has written some short stories and
published three books for children.
Debora Ferrero has always dealt with communication and
economic journalism; she has had the opportunity to meet
and interview many entrepreneurs. She has worked and still
works for newspapers and magaines on very different
matters, from historic cars and races to textiles and fashion.
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%housands, millions of people work, produce and save despite
all that we can invent to bother, to block and discourage them.
-t:s the natural vocation that drives them; not just the thirst for
money. %he taste, the pride of seeing their company prosper, to
gain credit, to inspire trust in an ever wider clientele, to expand
facilities, to improve their workplaces, are a progress spring as
powerful as the gain. -f not, it isn:t explainable why there are
entrepreneurs who lavish all their energies on their own
company and invest all their capital to make profits often far
lower than those that they could safely and comfortably obtain
with other jobs.
/;-<- 9-,);$-
"rom an address given at the ".lli <uerrino company
3$ogliani5 on *2th September *+00
Introduction
%his book has been written with four hands, a complex task
because it means joining two paths of life in a single text.
-n our case, this union was successful because it is the
result of two educations, the economic and the most
journalistic one, which went to compensate each other, but
above all because it binds a common passion= the one towards
all forms of human enterprise, the good one.
"or these reasons the book is born, in fact, more from
emotion than from reason and because of this it is not intended
as a comprehensive treatise on the role of entrepreneurship in
the economy but rather a reflection through history, literature
and experience; how important it is for us all, now more than
ever, having a way of thinking that can transform ideas into
action.
>ur goal, therefore, is to launch a message in a bottle in
the restless sea of reforms that the whole of 9urope will,
sooner or later, have to face to keep up with the times.
)mong all these reforms, the most important ones seem to
us those dedicated to the person, to engage a more dynamic
and globalied mindset but also to enable more and more
9uropeans to write their future.
>ur belief, probably, ironically, derives from the air that
we breathed from an early age, an air that ?smelled@ of
corporate culture, being both born in a land, the .iellese area
in the ,orth of -taly, which was transformed by its inhabitants:
desire to produce one of the two hundred -talian industrial
clusters; territories able to convey confidence, security and
courage, because they can deal with the increasingly difficult
challenges of the market with new products, processes and
services.
%o have a winning mentality against the ?crisisAmonster@ it
is important to learn from the past; our ancestors did not have
great wealth, however, to overcome obstacles and build their
way of life, they used intelligence, insight, and especially the
ability to turn dreams into reality. -t:s a message of optimism.
-t:s an exorcism against the fear that blocks, freees, disarms
and doesn:t really let live fully.
?"airy tales do not tell children the dragons exist.
!hildren already know that dragons exist.
"airy tales tell children the dragons can be killed@
Gilbert Keith Chesterton
Chater !
The da" #hen nothin$ #or%ed
That morning the alarm didnt ring.
I suddenly opened my eyes 45 minutes after my usual
wake-up hour I had to prepare myself at the speed of light
and then breathless I went off to work. !n"e in the street I
automati"ally went to the bar where I normally ha#e
breakfast$ if I dont ha#e my "offee with "old milk and
"roissant %reinfor"ed& with apri"ot 'am I really dont get
going in the morning...
%!u"h(& )y impetuosity in opening the door was
rewarded with a sharp bump on the head. I looked through the
glass$ it was all dark. In"redulous I pushed harder$ %There is
no need to slam the door down its "losed(& I said and
suddenly I felt abandoned. I walked towards the garage I was
definitely in a bad mood.
*s I tou"hed the bruise on my forehead while it began to
swell I thought that Thomas my trusted newsagent would
"ertainly straighten out this morning+ he is #ery good with
"ustomers. ,ut as I approa"hed I reali-ed with
disappointment that I wouldnt ha#e re"ei#ed any of his
intuiti#e "ompliments on my looks$ damn(
I looked at my wat"h$ "ould it be a bank holiday. It was
/ednesday 01th )ay2. 3o bank holiday nothing spe"ial2 I
de"ided it was 'ust a "oin"iden"e and got into the "ar.
I had only gone a few metres when I reali-ed that I was
almost out of petrol and so turned off into the street where the
petrol stations were. I stopped at the first one but it was "losed
and the self-ser#i"e wasnt working+ at the se"ond one I
"ouldnt e#en get onto the fore"ourt the red and white "hain
blo"ked any entry+ at the third was a sign saying 4uite
une4ui#o"ally %C5!678&.
I pulled onto the kerb. I turned off the engine+ with a
growing feeling of unease I grabbed my mobile phone. %I#e
absolutely got to tell someone about this weird morning Im
ha#ing.& I tapped in the digits with no problem but with no
su""ess there was no signal. The feeling of unease was
be"oming one of alarm making me almost short of breath. *n
hysteri"al thought flashed through my mind 9 was I by any
"han"e on Candid Camera.
I started up the "ar again and set off towards the "ity
"entre. %Theres bound to be something open there& I said to
myself. :owe#er mile after mile the "ity seemed more and
more deserted all the shops had their shutters down or were
plunged in darkness. ,y now my stoma"h was grumbling a
message to me %/hat about my breakfast.&
%,reakfast thats easily fi;ed& I thought %Id better start
looking for a baker you "an always rely on a baker(& I parked
the "ar and tried to enter a shop that I knew well but with an
enormous sense of frustration I dis"o#ered that it too was
"losed and I started to sni#el %Its ne#er like this not e#en on
*ugust ,ank :oliday(&
I went ba"k to the "ar %3ow Im going to ask someone
what on earth is going on(& 6uddenly a group of passers-by
hurried past 'ust like me they seemed to be sear"hing for
something but I wasnt able to talk to any of them.
<inally I arri#ed at the offi"e went up the stairs opened
the door and headed towards my desk+ on my "omfortable
green "hair I was already feeling more "alm. %3ow I will find
out what was going on& I said. I swit"hed on my laptop and
waited to get a "onne"tion but e#en here it was the same
negati#e story 9 no network(
)y heart started beating faster. 7#en my p" was down
how "ould I "onne"t to the outside world. I looked at my
phone again 9 still no "o#erage.
It was useless to swit"h on the radio but I tried all the
same. I listened to the "li"k and strained in #ain to hear
anything more than an empty "ra"kle.
I was stunned+ there I was surrounded by totally useless
ob'e"ts empty silent.
I began to think that there was a serious problem I mean
really serious(
The fear "ame ba"k powerfully and I started ha#ing
trouble to breath.
I tried to be rational but the only hypothesis that "ame to
my mind didnt seem likely at all$ a fall of meteorite a sudden
spread of radioa"ti#e substan"es an alien in#asion...
The alien in#asion seemed the most plausible. I saw it in
%Close 7n"ounters of the Third Kind&... 7#erything stopped...
=ust as it was happening around me.
*t that point my imagination ran wild... %In a few minutes
strange beings with three eyes will "ross the threshold take
me to their planet and do e#ery kind of e;periment on me&.
*n;iety. 6e#ere an;iety. >*3IC.
I tried to "alm down I had to think( I walked I thought I
walked and thought. %There will be an e;planation try to
understand&. Then at the height of frustration tired - I was
also without food - I sat down and rested my head on the
newspaper that someone had left the day before on the
boardroom table.
I "ried. I let the tears "ome down and the smell of ink and
paper in#aded my nostrils. )y thoughts were piling up in my
mind as images of a mad pro'e"tor$ I thought about my
tea"her at the primary s"hool and immediately after to the
monster I might meet on my way downstairs...
I "ouldnt stay there anymore. I was going "ra-y.
I looked up with diffi"ulty willing to fa"e I dont know
what when suddenly my eyes began to fire first the paper
"orrugated by my tears and then the big letters that formed a
si;-"olumn headline$
&To'orro#( )or the )ir*t ti'e in the hi*tor" o) the
Econo'"( E+ER, entrereneur in E+ER, *ector #ill be
on *tri%e-
In .ie# o) the *e.ere con*e/uence* o) thi* action the
oulation i* ad.i*ed to re'ain indoor* and to lea.e their
ho'e* onl" in the 'o*t ur$ent ca*e*-0
BBBBBBBBBBBBB
%his is what would happen if all the entrepreneurs on one
day, acting in unison in an imaginary scenario like this, went
on strike. )nd perhaps we need such a fairytale to make us
aware how much we are surrounded by entrepreneurial
activity; it envelops our everyday life without our even being
aware of it, we take it for granted.
-t is well to remember that every action we take is made
possible by the work of another and, in the majority of
situations, thanks to a business that someone, accepting all the
risks, has set up and is running, allowing us to enjoy the
benefits and services that every one of us uses every single
day.
%he aim of this book is to make us think about a common
good that can become a heritage and a resource for a region=
the culture of enterprise, that culture that belongs to all men
and women managing companies, whatever their sie.
%he old stereotypes that identify as an entrepreneur only
someone who owns a factory of mechanical valves with 400
employees are now outdated.
9ntrepreneur is the baker who bakes bread every morning.
9ntrepreneur is the retailer that makes us find this bread in
the city centre. 9ntrepreneur is the bar:s owner who with the
bread creates our sandwich lunch. )nd why not... 9ntrepreneur
is also one who invents a service by bringing the sandwich into
our office.
Chater 1
The econo'" 2i$ 2an$
)an is born to "reate.
The human #o"ation is to imagine
to in#ent to dare new #entures.
6ichael ,ovak
-f we analye the economic history of the world through the
development of income per capita, we understand that for
thousands of years, the curve that represents this dynamic has
not incurred any significant evolution. "or a long time,
humanity has been bitten by the soAcalled 6althusian trap and
its laws on the demographics 3compiled by the 9nglish
economist and demographer %homas C. 6althus, *&00A*'145,
with the result that, when wealth increased, in turn also the
population swelled, leaving unchanged the income per capita.
%he 6althusian theories explain that, depending on periods
and countries analyed, it is possible to observe different
demographic dynamics. )ll populations were originally
characteried by a high birth rate offset by an e7ually high
mortality rate, so the conse7uence in this case is the stability of
the population. 8hen a country is going through a phase of
development and food and health conditions improve, the
mortality rate decreases while the birth rate continues to
remain at strong levels. So, in those areas a greater level of
wealth is recorded but the wealth per capita remains
substantially unchanged due to the simultaneous growth of the
population. %his is why 6althus called it ?cage@= although
varying factors, the per capita income does not increase. -t
remains trapped at the same level.
>nly the start of the -ndustrial Cevolution, which took
place between the eighteenth and nineteenth centuries in
9ngland, managed to break through the walls of the ?trap@ by
letting wealth grow exponentially in subse7uent years, as is
well illustrated in the graph on the performance of per capita
income in the history of mankind.
6our"e$ Gregory Clark ?* <arewell to *lms$ * ,rief 7"onomi"
:istory of the /orld? >rin"eton @ni#ersity >ress 0AAB
%o try to understand the motivations of this epochal
transformation, <regory !lark, (rofessor of 9conomics at the
;niversity of !alifornia, $avis, presented a very compelling
argument in the book * <arewell to *lms$ * ,rief 7"onomi"
:istory of the /orld. !lark has set his research trying to
answer three big 7uestions born from the observation of the
chart just published= ?3...5 the world e"onomi" history poses
three inter"onne"ted problems$ why )althusian trap lasted so
long. )oreo#er why the loss of su"h a trap with the Industrial
Ce#olution was in 'ust a tiny island like 7ngland in the
nineteenth "entury. *nd "onse4uently why there was the
great di#ergen"e.@
)fter thousands of years, what really happened in the
eighteenth century in <reat .ritain and whyD
!lark is not the first scholar who tried to understand why
this incredible change of direction took place in *&20 in
9ngland and not just in a different historical period or in
another country. %he -ndustrial Cevolution events, thanks to
two hundred years of historical research and analysis, are
widely known with a reasonable degree of consensus. %heir
interpretations, however, remain the subject of wide dispute;
claims, sometimes contradictory, 7uite varied and complex;
studies taking into account external conditions 3e.g. the
institutional system and its policies, interest rates, etc..5 of the
endogenous ones 3technological innovations, literacy rates,
etc..5, or both simultaneously.
)ccording to !lark, who has analyed in detail all these
theories, they only partly explain the failure of a balance that
has lasted for centuries= before this real gap in the growth of
income per capita and wealth, several countries: societies had
already gained the above conditions, for example !hina and
Eapan had reached a very high level of development,
notwithstanding the -ndustrial Cevolution did not occur in
those countries.
!lark:s theory leads to one possible explanation, according
to which only 9ngland had enjoyed an extraordinarily long
period of political stability 3from about *400 to *&00 ).$.5
that, generation after generation, had created a population
culturally and nearly ?biologically@ prepared to face a new era,
with more patience and resourcefulness, new vision and finest
skills and organiational culture. %his was a population able,
finally, to implement innovations and turn them into
production of goods and services, with a particular ability to
exploit the technology, especially ?machines@, the symbol of
the -ndustrial Cevolution as traditionally it is meant.
%>eople respond differently to in"enti#es that ha#e e;isted
for generations. This different response was a dynami"
inherent in a pri#ate property regime institutionally stable in
pre-industrial 7ngland. The "hara"teristi"s of the population
were "hanging through 8arwinian sele"tion. 7ngland found
itself at the forefront thanks to its long and pea"eful history
dating ba"k until at least D0AA and probably mu"h earlier. The
middle "lass "ulture was spread through the so"iety through
biologi"al me"hanisms& !lark explains in his book. Fe adds,
%,oth China and =apan had started walking in the same
dire"tion as 7ngland in D1AA-DEAA$ towards a so"iety whi"h
embodied bourgeois #alues of hard work patien"e rationality
"uriosity and learning. They too had en'oyed a long period of
institutional stability and the right of pri#ate property.
:owe#er they walked in this dire"tion slower than 7ngland.
8a#id 5andes is "orre"t in obser#ing that the 7uropeans had a
"ulture more "ondu"i#e to e"onomi" growth&.
%he reasoning:s core is= a series of elements combined in a
certain way 3as in <reat .ritain between *400 and *&005 has
made possible a real transformation in the mentality of people,
such as to render them capable of creating and exploiting
technological innovations that gave life to a new economic
period, with completely new features, a real break with the
past. %hat:s why it is called revolution.
>n the basis of this premise !lark wonders why the
-ndustrial Cevolution hasn:t produced its effects in all
countries= %The Industrial Ce#olution while tending to
e4uali-e in"omes within the growing e"onomies at the same
time led to a gradual di#ergen"e in e"onomi" national
fortunesF...G. /hy didnt it liberate *fri"a 3ew Guinea and
6outh *meri"a from their geographi"al disad#antages rather
than a""entuate their ba"kwardness.&
8hy are there still nations whose inhabitants, despite the
abundance of technology and the many innovations that have
spread to the world, still live on the threshold of subsistence
level, resulting in huge pockets of poverty and sufferingD
%he explanation again comes from !lark= %6o"iety without
a #ery long and pea"eful sedentary agri"ultural "i#ili-ation
"annot at any moment take the institutions and te"hnologies of
more ad#an"ed e"onomies be"ause they ha#e not yet
"ulturally adapted to the demands of the "apitalist produ"tion
system&.
%he human factor, with certain skills, inserted in a given
context is the answer to the 7uestions that for two hundred
years scholars from around the world have set themselves; it
becomes the cornerstone in the evaluation of the entire
economic history of the world.
.y cutting the concept to the bone, we could say that only
some people, culturally prepared and genetically predisposed,
managed to change the path of humanity, and these people can
be identified as the entrepreneurs of 9ngland of the 40th
century.
FOCUS
THE CHINESE INDUSTRIAL REVOLUTION
%he extraordinary results registered in the past three decades
by !hinese economy have been called ?industrial revolution@.
Since *+&+, when ?market socialism@ was adopted 3an
economic system that opened up the !hinese economy to the
capitalist model5 gradually replacing central planning with
market liberal economy, growth has been exponential. %he
Cepublic of !hina is now the second largest economy in the
world for <$(, with annual growth rates of two digits.
%he strong !hinese economic development over the past
three decades has been based largely on the large amount of
cheap labor available, attracting production relocation of many
Eapanese and 8estern companies. )long with foreign
companies, thanks to the reintroduction of private property,
many !hinese factories were born too. %hey imported
technology and knowAhow to compete with 8estern products
and to defeat them thanks to substantially lower prices they
could practise. 6illions of people living in rural areas have
moved to cities and to industrial clusters to seek work in
factories and change their destiny. %his has meant abandoning
poverty, so much so that if in *+&' the population living on
less than G* per day consisted of 4&0 million people, in *+++
this number had shrunk to 14 million. )t the same time, the
middle class and the superArich segment of population
expanded. <rowth has not, however, occurred evenly
throughout, but concentrated in the industrialied regions of
the southAeast, thus accentuating the disparity of income
between different areas of the country. %he development
explosion has created major problems of pollution and labor
exploitation.
-f the !hina framework seems so familiar, it is because, in
general terms, it follows that of 9ngland and then the rest of
9urope in the late *'
th
and early 40
th
century except that
everything that happened in nearly a century and a half in the
8est, !hina has shrunk a little over thirty years between the
end of the 40
th
!entury and the beginning of the year 4000.
8hy has this economic revolution taken place now and not
when it occurred in 9nglandD %he scholarly debate is lively
and open and still there isn:t a common identity of views. %he
case of !hina is emblematic in this sense because the )sian
country was really at the forefront of economic development
since farAoff times. 9ric Eones in his book Growth Ce"urring$
7"onomi" Change in /orld :istory even says that !hina has
experienced its industrial revolution, comparable to the widely
recognied one, between '00 and *400 ).$; however this
development process was dramatically arrested relegating this
enormous power to an oblivion that lasted nearly eight hundred
years.
%hat !hina had all the preconditions present in 9ngland at
the time of the -ndustrial Cevolution is also the thesis of
Eoseph ,eedham. %he eminent .ritish scholar of !hinese
history deepened this aspect, even giving it his name= the
,eedham pule investigates why the industrial revolution did
not occur in !hina. Fis argument is based on two factors,
related to each other=
A %he first is the perpetuation of a technological innovation
system based entirely on experience, the contrary to what was
happening in 9urope where, thanks to the scientific revolution
in the :000, a search system based on systematic
experimentation established itself, raising dramatically the
innovation rate;
A %he second concerns the !hinese socioApolitical system
that discouraged unconventional thinking, which instead
reveals itself as a vital engine of technological productive and
therefore economic progress. -n particular, it is shown that in
!hina the highest ambition for those who want to progress
socially meant to enter the public sector, i.e. to become a
government official; the selection system asked candidates to
learn by heart the !onfucian texts, a very challenging task
given their sie. ,eedham suggests that the best minds of
!hina 3the precious ?human capital@5 devoted themselves to
this issue in an attempt to improve their social status, thus
diverting their attention from the scientific research and
innovation, which should have been able to initiate genuine
production processes.
-n this way, !hina lost its chance to start its own scientific
and industrial revolution. %his is a fascinating argument, that
many others have argued while others have objected stating,
for example, that 9uropean nations practised hoarding of raw
materials and wealth through the colonies, while !hina was
focused only on internal development 3Henneth (omeran,
with The Great 8i#ergen"e$ China 7urope and the )aking of
)odern /orld 7"onomy, is the main supporter5.
(robably there isn:t only one explanation, but it is
significant that, even with other arguments, we have come to
emphasie the importance of human factors and initiative. So
much so that today, facing the impressive sight of the !hinese
economy, we look with admiration to the tireless hard work of
its men and its women, for whom opening a business and
growing it sometimes is the very essence of life.
Chater 3
Hu'an *irit* and cororate culture
2to the ephemeral world of our "ons"iousness
they "ommuni"ate an unknown psy"hi" life
belonging to a distant past+
they "ommuni"ate the spirit of our unknown an"estors
their way of thinking and feeling their way of e;perien"ing
life and the world men and gods.
!arl <ustav Eung
3o man is an island
7ntire of itself.
7a"h is a pie"e of the "ontinent
* part of the main.
Eohn $onne
8hy in the world are there countries with many entrepreneurs
and great wealth and nations with few businessmen and little
wealthD
"or much of the twentieth century classical economists
have focused on analysing the reasons of economic growth;
their work has, however, focused mainly on macroeconomic
indicators, ignoring the human component represented by the
entrepreneur. -f we exclude the )ustrian school of thought and
a few other scattered scholars in different eras, classical
economic theory has largely forgotten the entrepreneur as the
propulsive person, almost giving the idea that economics
would proceed automatically. %his is because mainstream
economists have tried to place the company within a static and
mechanical conceptual framework, apart from the personal
element. %hese approaches have the merit to have explained
many of the economic mechanisms that are still valid today
and help us to understand and deal with markets and their
trends. Fowever, they have never been able to provide a
convincing interpretation of economic phenomena that would
include all the variables involved. Something was always off,
something that defied purely mathematical logic.
%his exclusion is expressed very well in the introduction to
the book *nimal 6pirits by two )merican professors of
9conomics, <eorge ). )kerlof and Cobert E. Shiller= ?/e do
not e#er really understand the ma'or e"onomi" e#ents unless
we reali-e that their "auses are largely of human nature. Its a
shame that most e"onomists and e"onomi"s writers do not
seem to understand this point and thus often pro#ide artifi"ial
and unne"essarily "ompli"ated interpretations of e"onomi"
e#ents assuming that the differen"es of sensations
impressions and passions are indi#idual irrele#ant as a
whole and that e"onomi" e#ents are dri#en by ins"rutable
te"hni"al fa"tors or by in"onsistent go#ernment de"isions. In
realityF...G the origins of these e#ents are #ery familiar and
they ha#e to do with our daily life&.
>nly in recent years in 9urope was there a positive
revaluation of the human factor as an agent of the birth and
development of the company, while, in *+'4, the )merican
philosopher <eorge <ilder, in his book The spirit of enterprise,
in open conflict with his contemporary economists, outlined
this concept very strongly= ?The growth has its origin in the
mind and will of free men go#erned entirely by their "reati#ity
and their "ourage their perse#eran"e and their faith.&
)ccording to <ilder, among economists there was an
underestimation of the decisive and crucial importance of the
entrepreneurial component; the entrepreneur, raising his own
business, thus generates markets and wealth and conse7uently
he is the only true driving force of economy. 9verything else
comes after.
)lso according to <ilder ?the e"onomi" system is
go#erned by the will and imagination by the "reati#ity and
tena"ity of its entrepreneurs. /hat matters is that they are
en"ouraged by religion and "ulture law and politi"s to do
their 'ob@ and explains that ?F...G tough arrogant stubborn
"reati#e business owners ha#e "ontinued to address the
problems of the world faster than the world "ould "reate them.
The e"onomi" "onse4uen"es of enterprise remained the
highest testimony of the mysterious for"e that dwells within the
human spirit&.
-n confirmation of his thought, <ilder in his book tells
some stories of great entrepreneurs bringing out how their
vision and their incredible determination have been crucial in
changing their destiny, starting from nothing and struggling
against adversity and obstacles. Symbolically at the end of this
chapter we will summarie one of these stories= that of Eack
Simplot.
/ike <ilder, many other scholars, based on the strength of
the human factor, have tried to understand the role of that
intangible element that comes from entrepreneurial energy
generating the settlement dynamics of economic activities and
land development, deepening a fascinating concept= corporate
culture, understood as an expression of the population of a
given place.
%his is a difficult subject to grasp in its complexity
because it is at the crossroads between several subjects=
economics, sociology, anthropology, history, social
psychology, philosophy, arguments that characterie it for
some aspects and not for others, making it difficult to approach
and to study in a scientific manner.
)n economic and social system is the result of
geographical environments, historical sedimentation, cultural
cross, traditions that time after time form shared values that
create a certain Icollective unconscious:, giving rise to entirely
different communities. -n the study on the aspects of psychic
structure !arl <ustav Eung explains that ?F...G the "olle"ti#e
un"ons"ious is an heritage of representati#e possibilities
rather than indi#idual but "ommon to all men and perhaps all
animals and forms the #ery basis of the indi#idual psy"he&.
%he environment moulds their inhabitants and, in turn,
people shape the land that hosts them triggering, in some
cases, virtuous models. ) typical example of this mechanism
are the industrial clusters, areas with high concentration of
business, places that stand out for their efficiency and
competitiveness, where the emulation of the most talented
entrepreneurs leads to an overall growth of the area.
Eohn 6aynard Heynes, one of the greatest economists in
history, liked to describe those social forces that generate
wealth and vitality, ?animal spirits@. "rom his words= ?The
basis of our knowledge to estimate the return that a railway a
"opper mine a wea#ing mill a medi"ine an o"ean liner or a
building in the City of 5ondon will gi#e in ten years or e#en in
fi#e years is poor and sometimes e#anes"entF...G "an be
"onsidered only as the result of %#ital impetus& Fanimal
spiritsG F...G a spontaneous urge to a"tion ?.
!onsidering <regory !lark:s theory, that we have
examined in the second chapter, and the high value attached by
the new argument above 7uoted to the person J entrepreneur,
we prefer to call these vital forces ?human spirits@. (eople who
certainly have in their own $,) a ?spontaneous drive to act@
3as Heynes said5 but also have ?special training@ 3as !lark
explained5 because they lived in a certain environment and
have ac7uired the spirit of enterprise as a fundamental value
for the construction of their own future through open and
positive attitudes towards dynamism and proAactivity. %he
actions of the ?human spirits@ are not directly measurable nor,
sometimes, even immediately visible, but the area draws a
definite benefit because, thanks to their actions, it lives and
grows. -n other words, people born in a certain territory
breathe and absorb a lifestyle that does not necessarily lead to
becoming entrepreneurs, but will make people want to do and
build, and this attitude will be reflected in all fields, not just
economic ones.
!ertainly, a society in which corporate culture is perceived
and experienced as a real ?pillar@, is difficult to obtain
artificially, at least in the short term, because it is inevitable
that entrepreneurship culture, as well as any other type of
culture, matures and grows over time when rooted in the past
and, simultaneously, sets the stage for the future.
Ceturning to the speech approached at the beginning of
this chapter we can rephrase the 7uestion as follows= why in
the world are there places where corporate culture has spread
in some periods and places where it has never been presentD -t
is possible to generate and spread corporate cultureD
F4CUS
5AC6 SIMPL4T 7 AN AMERICAN ST4R,
6ome people li#e spe"ial li#es for many reasons and =ohn
Ci"hard 6implot is definitely the emblem mainly be"ause its
history is that of a man who by his own will and
determination has literally forged his own path despite
obsta"les and in"on#enien"es+ it seems as if he has managed
somehow to mo"k fate. 6implot hasnt set up a "ompany
during his life but has made his life an apparently ama-ing
#enture. /e were so infe"ted by the enthusiasm that George
Gilder has managed to "on#ey through the story of the
*meri"an entrepreneurs biography F"ontained in %The spirit
of the enterprise&G that we wanted to share some parts here
the most signifi"ant in the belief that 6implot represents the
essen"e of human spirits.
)t the age of six, Eohn Cichard Simplot, known as Eack,
was already working hard on the family farm and began by
providing morning care of the cows in the barn. Fis father, a
farmer of Fuguenot faith emigrated from Scotland, and in
*+0+ moved with his wife and the first of what would become
four children to a desert region, arid and sandy, on the border
between -daho and >regon.
)lthough he 7uickly learned that life was a succession of
duties, Eack was a child always smiling, often bundled up in
overalls, cap on his head and work shoes somewhat too large.
Fe got up at four in the morning to help with milking, walked
two miles up the road to school, returning in the afternoon in
time to help on the farm. %he only interruption to the
monotony of these commitments was the hunt, which was used
to supplement the family diet and in which Eack became an
expert.
-n *+*&, when Eack was eight years old, the father divided
the property into three parcels of forty acres and ceded them,
burdened with mortgage, to go forth to lead a life less hard on
a chicken farm in Kenice, !alifornia. (erhaps it was opening
for the firstAborn the prospect of experiencing a more
conventional youth.
Fowever, Eack did not take long to invent himself a new
job. 8ith his 2 cents a day for candy he bought two
newspapers, and with the profit realied from the sale he
bought more. Fe already knew the mechanism of investment=
to be deprived of candy today for future bags of candies, and
then to give them up too. 9ventually he put together a large
customer base and when a group of older boys moved in on
him, Eack began to sell newspapers in the city centre offices.
)nother of his tasks was to go around with a wheelbarrow to
rake scrap stuff and sell it to scrap dealers. Eack, in one way or
another, never missed the money in his pocket and knew what
he was getting. >n his way to deliver newspapers, at four in
the morning, he kept himself awake counting sheep. Fis
dream, in fact, was to arrive one day owning a flock.
"or two years the Simplot family enjoyed !alifornia. .ut
6r. Simplot:s plans to retire collapsed when the buyers of
property in -daho defaulted and ceased payments. %he family
had to return to the north to exercise the right of expropriation
on mortgages. -n *+40, Eack Simplot was back in -daho, to
work hard on the farm. %he only freedom he had was to
agonie over how to escape from that fate.
-n the dynamics of the entrepreneurial life is almost always
the critical moment of escape, of detachment. -t could be
physically, leaving the family and the country, like many
immigrants, or by betraying parents: expectations.
Eack Simplot was able to leave for the first time in *+41 at
the age of fourteen. Fis method of obtaining the means of
escape was to stock up on sheep ?excess@ in the surrounding
farms. -n the course of several months, the boy managed to put
together some forty lambs, raising them to the point he could
sell them to farmers. %hus he accumulated G*40; he invested
the money to buy a battered "ord pickup that he put into
operating condition, and went to live in the city of $eclo.
%here, he happened to notice the slaughter of the pigs.
-t was one of those fre7uent occurrences in the history of
)merican agriculture, where the price of a product A in this
case pig meat A had fallen below production cost. -n
desperation, the farmers were killing piglets and burying them
in mass graves. %he young Simplot shuddered at the waste and
immediately jumped on that opportunity. Fe told the farmers
that he would breed the piglets. Fe picked up hundreds of
animals, some free, others using the money made from lambs.
-n $ecember of that year he had about &00 pigs. Fis father
thought he was cray. %hose animals were not sheep that could
be fed with hay and grain. %hey were pigs, hundreds of
voracious beasts, who needed protein, starch and
carbohydrates to survive the winter. -f farmers by profession A
who had long experience, special e7uipment and who enjoyed
an economy of scale L thought it not worth it to breed these
animals, how could a guy do thatD 9ven if they survived the
winter, getting fat enough to be sold, it would be a wrong deal=
everyone knew that the pork market was saturated.
Fowever, Eack went to work. Fe built a series of sties in
his forty acres and a giant cauldron to cook the mash to feed
the animals. Fe picked up heaps of bushes and piles of old
tires for fuel; waste potatoes, hay and other vegetable matter to
feed the pigs. .ut they needed more protein. Eack then resorted
to his hunting skills, braced the rifle and on board his truck
began to track down the wild horses that roamed in large herds
in the area. .y selling the skin of the beasts he repaid gasoline
and with the meat fed his pigs. -t was an exhausting job, but it
would be paid off in abundance when the pig meat market had
recovered= as occurred in the spring, when, given the scarcity
of pork, Eack was able to sell his &00 pigs at & cents a pound,
cashing a check for G&,'00. Fe became a wealthy man.
Fe ploughed right away, buying land, tools, ploughs,
harrows, planters, weeders and eight horses. "or three years he
cultivated potatoes, beans, wheat and hay, railAshipping his
products to the market at .urley; he raised and traded pigs,
sheep, horses and cattle. Fowever, to try to round up even
more, during the winter he worked and selected the potatoes
from a local department store, choosing the smallest sieving by
hand and removing the enormous ones. -t was a tedious,
inefficient and poorly paid process.
-n the winter of *+4&, Eack became aware of a
manufacturer of an electrical sorting machine and promptly
decided to buy one. %he young farmer soon discovered that it
was a marginal improvement, but a real revolution. Fe hired
workers, he made his first deposit in storage and then started
selecting potatoes for other producers. %he young Simplot
found himself launched at full speed into the activity of sorting
and storage of potatoes to sell to the markets. -n *+10 he found
time to marry Cuby Coseveer, daughter of a local hardware
merchant, and moved to .urley.
$espite the <reat $epression in the thirties, Simplot built
collection centres in .urley, $eclo, .lackfoot, .uhl,
)berdeen, (aul 9aton and 6urtagh. %hen he extended his
activities to onions and in *+10 bought the .runeau Sheep
!ompany, a herd of sheep, fulfilling the dream of his
childhood. -n *+40 Eack employed about *,000 people in thirty
centres for storage of potatoes and onions, each with three
sorting machines, and shipped to markets some *0,000
carloads of product per year. Fe paid 2 cents per bag for
unsorted potatoes and sold them, after sorting, for *2 cents a
bag.
Simplot could be satisfied and, therefore, be content, but
he was not.
-n the spring of *+40, Simplot decided one day to go to
.erkeley, !alifornia, to find out why an exporter of onions
there had accumulated a bill of G',400 for waste onion that he
had not paid. 8hile waiting for the man at the office, he met
one of his clients, a dealer in potato and onion flakes. %he two
went into a huddle and within a few hours had an agreement
under which Simplot provided vegetable flakes direct. Eack,
who all now called E.C., entered into the canning industry with
no idea of how the production process took place.
)gain, he followed a business precept that he would have
been faithful to all his life= when it is the right time, you must
join. Fis philosophy is written in a more elegant way on a
metal plate that has made a fine show on his desk for more
than twentyAfive years= if you want to foresee all possible
objections, you will not undertake anything. %he objections
which advised against signing a contract for delivery of
200,000 pounds of onions, dried, powdered or flaked A without
the proper e7uipment and without the slightest idea of how to
build them A seemed absolutely insurmountable. .ut E.C.
Simplot had followed his instinct and did not miss the decisive
moment. %he same day, he ac7uired in cash from a ,apa
Kalley company six dryer tunnels that in a short time enabled
him to make a profit from the production of onions of G20,000
per month.
"rom *+40 to *+40 they were frenetic years, where the
Simplot empire had moments of great daring ascents and
descents, followed by strong tax gains and corporate crises. -n
*+40, a chemist working for him, Cay $unlap, suggested to
Simplot to start producing froen potatoes. -n the past it had
always proved impossible because the cellular structure of the
tuber is altered and, when thawed, potatoes are invariably
reduced to a pulp. Fowever, now $unlop had developed the
method of treatment that would give the world the first
satisfactory froen "rench fries. ) new product was to be
launched on the market.
9ven in this case the ?battle@ was long and difficult, the
product must be refined and above all it had to convince a
market a little bit suspicious... Simplot worked as long as he
knew that the )merican housewives did not understand this
innovation could simplify their lives. )nd when the
housewives realied this fact, so did Cay Hroc, 6c$onald:s
president, with whom Eack signed a contract to supply chips to
the entire fast food chain. -t was consecration.
-n *+&+, at the age of seventy years, Simplot decided to
tackle a new challenge in the field of high technology= he
founded a new company, 6icron %echnology, and projected it
towards its second billion dollars. -n 400&, his estate was
estimated at nearly G4 billion.
$espite the terrible hardships endured in his life, Simplot
lived to nearly a century= he died in 400', ++ years old. .ut
Eack continued to live as an example of unwavering
determination, insight, courage, and ability to take risks and
look into the future. ) true human spirit.