Chilecon Valley’s lesson to Turkey
Not only do I appreciate their economy, as I highlighted in my last column, I also like the Chileans’ business acumen.
I was impressed by the wineries in Mendoza, Argentina, but their Chilean counterparts are so much better at presentation and marketing. The immaculate gardens, along with the American accent of our guide in Undurraga Winery, made me feel as if I was in the Napa Valley.
And what better way to attract bankers with too much testosterone than to have waitresses in short skirts and high heels. These cafes in the financial district are actually called café con piernas, or legs. I was also surprised to see a higher education cluster in the República district of Santiago, which probably has the highest university density in the world.
But I would have never thought that this South American country had produced a small version of California’s Silicon Valley in a couple of years. When I heard about Chilecon Valley from a chilena outside Pablo Neruda’s home in Valparaiso, I thought she was saying chili con vali, which was probably a Chilean national dish similar to chili con carne.
Start-Up Chile, as the program is officially called, selects fledgling firms and gives their founders $40,000 and a one-year visa so that they can work on their ideas in Chile. In return, they coach local entrepreneurs, speak at conferences and teach entrepreneurship. Since its initiation in 2010, more than 500 companies and 1,000 entrepreneurs from nearly 40 countries have taken part in the program, which supports Chileans as well.
This contrasts sharply to how we Turks attract human capital. The national science agency TÜBİTAK would like to reverse the brain drain. So they invite prominent Turkish academics living abroad to conferences, telling them how happy they will be in Turkey. But no incentives are given for them to return.
The Chilean experience should be taken with a grain of salt. Startups should be able to try again should they fail, but the country’s bankruptcy regime is the dark spot in an otherwise extremely pro-business environment. While Chile is 37th in World Bank’s Doing Business rankings, its place in the Resolving Insolvency category is 98th. Luckily, a new bankruptcy law will come into effect soon.
Moreover, a venture capitalist friend from Silicon Valley noted that there are not enough in his profession in Chile to support the start-ups once the government money runs out. He also underlined that it is impossible to replicate the U.S. experience without a good university like Stanford nearby.
Chilean universities raise great economists, but I am not sure if the República colleges, or the more prestigious universities, for that matter, can cater to the startups. If not, there won’t be spillover effects to locals, and the whole experience will be nothing more than a year of free vacation for a bunch of entrepreneurs in a beautiful country on Chilean taxpayer money.
But still, Chilecon Valley shows that if you give the right incentives, they will come.