Embracing failure is key to reviving Western growth
IN AMERICA, a new parenting book is causing a stir. The author Paul Tough argues that an overly hands-on approach can harm a child’s development. Instead, parents should be more laissez-faire. They should give children the chance to fail in order to encourage the development of qualities like grit and optimism.
Perhaps this is a lesson that needs to be adopted more widely. The most recent report in the Barclays Wealth Insights series – which surveyed 2,000 entrepreneurs, investors and business leaders globally – shows the role that persistence and embracing failure plays in growing economies.
Of course, emerging economies are forging ahead fast. McKinsey has estimated that, by 2020, the collective GDP of emerging markets will overtake the developed world for the first time. But what can we learn from the East with regard to kick-starting growth in the West?
Crucially, we must look at the mindsets of Eastern entrepreneurs and the environments in which they operate. Herein lies a stark difference. When asked about perceptions of failure, 91 per cent of individuals in the Middle East say that viewing failure positively is essential for an economy to grow. In the UK, the figure was far lower.
Persistence in the face of adversity is another area in which the East scores higher. A full 88 per cent of Indian respondents agreed that entrepreneurs should persist after setbacks, compared to just 35 per cent in the UK. This is interesting because business conditions in developing economies can be very challenging (India comes 166th out of 183 countries in the World Bank’s ease of starting a business ranking) and perhaps partly explains where this persistence stems from. Grit and tenacity is serving the East well and suggests that steely determination can reap rewards.
Governments and organisations in the West should be thinking about how they can promote and encourage Eastern attitudes to adversity. Tough’s book shows one path we could take: creating a cultural shift through our children.
Wimbledon High School in West London offers a good example of how to drive this change in attitudes. It recently held a “failure week”, aimed at encouraging pupils to learn from setbacks. This is vital. Recent development of technology hubs, like London’s Silicon Roundabout and TechCity, suggests that the UK can create the right entrepreneurial environment. But this must be accompanied by a change in attitude.
The consequence of not fostering this entrepreneurial attitude, in which failure is embraced and persistence rewarded, is that the East may overtake the West sooner than McKinsey’s 2020 forecast. Alongside ready access to investment and advice, the West needs to reignite its entrepreneurial attitude to failure.
Richard Phelps is managing director in the wealth and investment management division at Barclays. If at First You Don’t Succeed…Mapping Global Attitudes to Adversity is available at: www.barclayswealth.com/insights/Volume16.htm