“America is the greatest engine of innovation that has ever existed, and it can’t be duplicated anytime soon, because it is the product of a multitude of factors: extreme freedom of thought, an emphasis on independent thinking, a steady immigration of new minds, a risk-taking culture with no stigma attached to trying and failing, a non-corrupt bureaucracy and financial markets and a venture capital system that are unrivaled at taking new ideas and turning them into global products.”
-Thomas L. Friedman
The fastest bank run in U.S. history happened within 48 hours last week and is the first of this truly digital economy. Most people have never heard of Silicon Valley Bank or know how it differs from other institutions across the nation or within our hometowns. Tech entrepreneurs and venture firms far from Silicon Valley did know about SVB and the service they provided, which was critical to many of them, including here in the heartland. The immediate crisis seems to be averted, but I get a feeling we are only at the beginning of realizing the implications of this event.
The United States is an incredible innovator. The basic research so often funded by our federal government and nurtured in our major research universities is converted to the consumer and business markets through an unrivaled system of free enterprise, regulated capitalism, and entrepreneurship. This system is fueled by a financial apparatus that supports risk-takers and the formation of companies so that they can fuel their need for talent and equipment before they record any revenue. The United States does this better than everybody else and it has greatly benefited our economy and the rest of the world. There are also flaws in this system and they will be on full display in the coming days. I hope that we will see the bigger picture, make regulatory adjustments, penalize those that abused the system, and continue to support entrepreneurs here and abroad that are doing work that will make our world better and safer.
It is also important to not get caught looking at the events of the day or week, but to keep our eyes firmly affixed on the years ahead. In these perilous times, we must continue to work on making our own system work better for everyone and compete with those state-driven economies that seek to unseat us from atop the world’s economic system. We can and must do both.
Let’s have a great week, lift each other up, and move forward together.
– Kenny McDonald