Steven Koltai

Steven KoltaiPeriodically we'll be interviewing Senior CEME Fellows to check in on their latest research, big questions they've been pondering and everything they're keeping an eye on in the world. Today we spoke with Managing Director of Koltai and Company, Steven Koltai.

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Interviewer: What are the questions that keep you up at night around your current research/focus of interest?
SK: I am writing a book right now (based at the Brookings Institution), which is provisionally titled “World Peace Through Entrepreneurship”. One of the main reasons for writing the book is to argue that the US government, in its funding of economic development around the world, needs to do a better job of connecting the dots between our policy and our programs. In fact, that is the name of one of the chapters in my book (e.g. “Connecting the Dots”). What I observed at the State Department when I was running the Global Entrepreneurship program and working for Secretary Clinton was that we talked a lot about the need to create jobs, especially in my case in Arab countries with the highest unemployment rates in the world, yet regionally we were doing almost nothing to actually fund those programs. One of the things that keeps me up at night is you can fool some of the people some of the time, but you cant fool all of the people all of the time, and the loss of American credibility over what we say versus what we do is to me very worrying. It extends to many things from spying to drones but in my particular area, which is entrepreneurship development, here we are, this country with all of these entrepreneurial credentials and talking about it so much and spending so little money actually making it happen.

Interviewer: What do you see in the developments and events around the world today that make your work relevant and timely?
SK: I think, (admittedly, confessing to being totally not objective!), my work is incredibly relevant and timely because I see a direct line connection between entrepreneurship, job creation, political stability and civil society. I don’t believe you can have political stability and civil society when you have 20%, 40%, 60% unemployment, especially youth unemployment which tends to be true in most developing countries. I think Iraq and Afghanistan are perfect examples. But then so are all of the other parts of “Arab Spring” from Egypt to Libya to Syria to Tunisia. The United States, I predict, will look back on our experience in Iraq and Afghanistan and show that essentially almost all of what we have spent in money, which is well over $150 billion, and lives, which are about 25,000, will have been wasted. I predict that if they even survive as states, which I think is a very open question, they will certainly not be any better off than they were before we arrived. In many cases, in the case of Iraq I think they will be worse off. I think it will take Iraq at least a decade to recover the lost growth, to rebuild the infrastructure to what they had at the end of the Saddam Hussein regime. Obviously you cannot quantify political freedom, you cannot quantify, in the case of Afghanistan, the terrorism of the Taliban, the inequality especially in respect to women that was imposed by that regime on that society. I don’t want to minimize the value of that but I also believe that the cost of what we did compared to what we got is out of whack and unsustainable. Entrepreneurship spending, or the budget request that I’m going to be describing in my book, was for a project that cost tens of millions of dollars not the tens of billions of dollars of military spending. Entrepreneurship spending really is a catalyst for creating jobs, which is in my view a much longer-term benefit than even short-term security that can be obtained by having American forces on the ground. That is why I’m so passionate about this because I don’t believe that any of the security threats to the United States today really can be met purely militarily, hence the title of my book – “World Peace through Entrepreneurship”.

Interviewer: Where do you see the greatest opportunities for impact for students who affiliate or work with IBGC?
SK: I think that there are some really interesting projects going on by the Fellows all of which, speaking for myself, need manpower, need candle power. That is what Fletcher students can offer. Having a supply of smart people, particularly who can organize work, can manage the project would be very valuable for the Fellows. Every single Fellow could use the help, and several of us are working on projects that are interconnected so there are things that could be done that would benefit across the projects. To me this collaboration is the number one opportunity.

Interviewer: What is the most interesting book you have read recently?
SK: 25 Things They Don’t Tell You About Capitalism which is written by Ha-Joon Chang, first published in 2010 and just re-issued. It disproves 25 generally accepted principles of capitalism. One of my favorite ones is ‘the internet changes everything’ and his point is that it is not that the internet has changed everything, but rather, in a somewhat tongue-in-check but nevertheless very real way, it’s the washing machine that really changed everything. He talks about the number of hours that women were liberated from washing by hand with the advent of the washing machine. Similarly piped water revolutionized household activities. Securing water and cooking and cleaning are the principle activities of most women in the majority of the developing world. He makes a really interesting point about how we tend to become, we in the developed world, very myopic about seeing trends from our own point of view. For example, how the internet changes everything and one laptop per child and it’s all about getting laptops to every kid in Burkina Faso when in fact it is much more basic things; clean cook stoves, washing machines, drinking water, solar powered electricity that is reliable. Many times it is these no-tech or low-tech interventions that really have the biggest impact. This book talks about 25 of these generally accepted truths which when you look under the surface turn out not to be true.

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