A Business Environment Conundrum

Opportunities are created by a disturbance in the business environment (break-through technology, misalignment of capabilities and costs, disproportion of supply and demand etc.). Therefore, entrepreneurial initiatives tend to migrate toward in-balanced environments (Dubai’s no-tax territory, China’s cheap labour and artificially weak currency).

For a while, I thought that stable and predictable conditions should attract business; it is still true for companies enjoying monopolistic positions. However, stability and order in the business environment will eventually even-up the plain field, thus favouring perfect competition, a climate where the opportunity to make money is substantially diminished.

A community which intends to attract businesses must come-up with a disruption in its settings. The challenge for local governments is to abdicate their traditional role of creating and maintaining order and balance, and adjust to the less rational mission of enabling abnormalities.