The Need for Risk-Taking

           The Official opening of the 35th Annual MacGill Summer School

 

The Need for Risk-Taking

H.E. Kevin O’Malley, US Ambassador to Ireland

 

Our theme this week at MacGill is “Ireland at the Crossroads” – and, indeed, Ireland is at the crossroads. In some ways, we are always at a crossroads, either individually or as a nation, faced with specific choices about where to go, which way to turn, or to just stand still. I believe the United States is also at a crossroads right now as well, in some ways very similar to Ireland’s, and in some ways different.

Often when we face a crossroads, there is an easy option. However, the road that sometimes seems the hardest initially is the one that leads us to a better destination. After all, if the easiest road always led to the best place, there would never be a real crossroads.

I’m a big baseball fan, and one former baseball player, Yogi Berra, a Hall of Famer from my hometown of St. Louis, Missouri: was known for quotes that tortured the English language and didn’t sound very wise. He once said, “If you come to a fork in the road, take it.” Some other favorites of Yogi’s are:

“Baseball is 90% mental- the other half is physical.” It’s like déjà vu all over again”

I think what he meant was something more like what Robert Frost wrote so eloquently, in his famous poem “The Road Not Taken”: Two roads diverged in a wood, and I — I took the one less traveled by,
And that has made all the difference.

The United States, at certain points in its history, took “the road less traveled by” – at times the road never traveled before – and it has made all the difference. Sometimes for the bad, often for the good. And while some of these roads may be more traveled today, they can still make all the difference. The crossroads I am talking about, the fork in the road if you will, is about how we think of, and evaluate, risk and the other side of that coin, how we think of, and evaluate, failure, especially in the context of entrepreneurship, you might say, is where the fear of failure goes to die.

For those of us who aren’t entrepreneurs – and indeed, not everyone can be – we need to enable those who are, by making sure they can implement their best ideas. If they can’t do it here – in Ireland/ in America- the innovators will do it elsewhere. That wasn’t always true, but in this increasingly interconnected world, it is now.

Present-day America was built, in part, on entrepreneurship – as President Calvin Coolidge once said, “The business of America is business.” And that’s even more true today. It became that way, in part, and continues that way, in part, because of the American attitude towards risk and towards failure.

Thomas Edison, perhaps the world’s greatest inventor, exemplified that thought. And he captured the attitude of many Americans towards risk, and failure, quite succinctly when he said, “I have not failed. I’ve just found 10,000 ways not to succeed.”

Mind you, that’s coming from a man who received well over 1,000 patents in the United States alone. The number of times he failed – or did not succeed, at least – is beyond count. Under some short sighted standards he would be considered to be one of the biggest failures in the history of the United States. But that standard clearly doesn’t define Edison. In the same way, a failure in America doesn’t necessarily define a person.

Robert F. Kennedy said, “Only those who dare to fail greatly can ever achieve greatly.” In other words, reasonable risk is admired. But the risk Americans are often willing to take isn’t limited to the boundaries of the U.S., and, in fact, helps tell the tale, in part, of our extraordinary bilateral relationship. I’m talking about investment. Some of the very first multinationals to invest in Ireland were from the United States.

Since the 1970’s, total U.S. direct investment in Ireland has grown by leaps and bounds. It reached a total of $240 billion in 2013, or more than 200 million euro. Ireland has the 6th-most U.S. investment of all countries in the world. It has more U.S. FDI than the BRICS countries combined – Brazil, Russia, India, China, and South Africa – combined. But one fascinating little detail about that investment is when much of it occurred. Nearly $130 billion of that figure came to Ireland between 2008 and 2012 alone, years when Ireland was seeing its darkest economic days in quite a while. In other words, that investment was a risk. The United States was betting on Ireland when Ireland wasn’t betting on Ireland.

Embracing risk in Ireland

It wouldn’t be accurate, however, to say a risk taking mindset never existed in Ireland or doesn’t exist today. Ireland has embraced risk in significant ways in the past. For one example, making third-level education free some fifty years ago was a bold step. The result has been a well-educated population which has served Ireland very well, forming an impressive talent pool which has been put to use by those companies investing here and many more. I’ve visited quite a few of those companies since my arrival in October, and I have regularly been highly impressed with the quality of the Irish workers I have met.

Perhaps one of the biggest risks, and leap forward, is still very much in evidence today. Some 60 years ago, T.K. Whitaker – I understand that there is a session specifically about him on Tuesday – proposed a drastic change to how the Irish economy worked. Whitaker looked outward, beyond Ireland’s shores, understanding the potential for Ireland by embracing an open economy, one that welcomed trade and investment. That was incredibly innovative and inventive, and Whitaker undoubtedly understood the risk it encompassed.

It took Taoiseach Sean Lemass, however, to begin making that proposal a reality. Was it risky? Absolutely. It wasn’t the norm at the time by any means, and it’s something that still feels risky enough that some countries in the world refuse to do it. They fear foreign investment, even though it’s clear that, over time, the economies that are open are better off, and the ones that eschew foreign participation grow less. But this inclination grows from the fear of short-term risk.

This outward-looking, risk-embracing mindset also led to Ireland’s first application for European Union membership in 1962. While it took until 1973 for that request to bear fruit, it was clearly, in retrospect, the right idea, the right thing for Ireland. It remains so today. Ireland depends on its European partners, which can sometimes be troubling news, but economically much more good than bad.

Ireland has faced another crossroads very recently, and took the road less traveled – indeed, the road never traveled – when it passed the same-sex marriage referendum. That choice was driven in large part by the youth of Ireland, another changing demographic, with 40% of Ireland under the age of 30. Influenced by that diversity, Ireland made the choice to support the equality referendum.

While these examples are about Ireland embracing risk as a nation at times, the same hasn’t always seemed to hold for individuals. The individual Irish mindset on risk, I have seen in the past, is a bit different from the past or current American view. In the1907 Irish book, The Aran Islands, the author wrote “A man who is not afraid of the sea will soon be drowned…for he will go out on a day he shouldn’t. But we do be afraid of the sea, and we only be drowned now and again.”

The quote hints at a traditional Irish view of risk – take as few as possible, but even then you may well lose – in which case you will never take a risk again. I understand this way of thinking was reflected up until recently in areas such as bankruptcy law, as declaring bankruptcy was much more onerous than in the United States, and reputational damage was long-lasting, if not ever-lasting. So the debtor, even after the bankruptcy period, might still have great difficulty obtaining a loan, even if they had come along with a great idea. Imagine that thinking applied to Thomas Edison. He might have failed once and then been forgotten.

While I’ve heard about an Irish history of aversion to risk, what I’ve seen since coming here in October – only 9 months ago- has been remarkably different. I mentioned U.S. investment here, and that investment increasingly funds innovative activities and research and development here in Ireland. I’ve been to a number of U.S. companies here, and see more examples of that than I can possibly list. That wouldn’t make sense unless there were people here ready to reach into the unknown, to take risks. But risk-taking is not just about a single moment. It requires sustained courage to endure uncertainty and the sometimes lonely experience of living off an idea that may not succeed. “Creativity and discovery necessarily involve risk so there will be dark days for you,” said Alan Heeger after winning the Nobel Prize in physics, “but dealing with that risk is a part of the thrill and satisfaction.”

So there are some individuals, more than ever, embracing risk here, but I don’t see that as widespread – yet. Perhaps some are still held back by the property boom, and have become even more risk averse because of it. That’s understandable in that context, but that was about lots of people all taking the very same risk. Risk in the entrepreneurial world is about diversity, about variety, because it encompasses a potentially unlimited number of new ideas.

To achieve greatly, we must take a risk – a risk of failing, and perhaps of failing greatly. And sometimes that does happen. Failure shouldn’t be the end of the story, though, and it shouldn’t keep us from trying again. Winston Churchill said, “Success is stumbling from failure to failure with no loss of enthusiasm.” Sounds rather like Edison, doesn’t it? Failure does not have to be the end. It is only a part of the process that can lead to success.

Sometimes it’s not the individual who dampens their own enthusiasm, but people around that potential innovator. This is one way that those of us who aren’t entrepreneurs can support those who are – with encouragement, but also by doing what we can to ensure that someone who has failed can still avail themselves of opportunities. Because a failure can often lead to something better.

Oscar Wilde wrote, “Experience is simply the name we give our mistakes,” which is a more poetic version of Henry Ford’s statement that “The only real mistake is the one from which we learn nothing.” Sometimes, we may not succeed without failing first, because that teaches us something we wouldn’t otherwise have ever known.

Ultimately, reasonable risk is at the heart of our biggest thrills and proudest achievements. Ask someone when he or she felt the most alive and they’ll often tell you a story about a risk they took.
The reality I see in Ireland now definitely embraces that innovative way of thinking, and that willingness to take a risk – to dare greatly. I have seen the change nowhere more clearly than at the Web Summit shortly after I arrived last fall. We could talk about the event itself, how Paddy Cosgrave dared to turn a somewhat crazy idea into a massive event, and one spawning new events across the world – including in the United States. That’s a great story of risk, and a story of great reward.

But I’m thinking mainly about the participants, the people who bring the real energy to the Summit. I see in them this willingness to embrace risk, to court failure, or rise from failures that have already occurred – a Thomas Edison attitude, perhaps – which is clearly growing in Ireland right now. This is a crossroads, and Ireland can choose to continue down the path- the path of risk, but almost inevitably – with such creative energetic people behind it – the path of success. Not that it will be easy. The future will be challenging, and uncertain, but playing it safe will not be the safest path.

The Transatlantic Trade and Investment Partnership

I mentioned investment earlier, and it is a fact that the nature of that investment has changed since the 1970s. That investment becomes more two-way all the time. Total investment in both directions now exceeds $400 billion, and supports almost 300,000 jobs. The majority of those jobs are not here in Ireland, but in the United States, and was created by companies that needed to expand.

But for this kind of relationship to continue, and to grow, innovation must continue as well. I believe it will, but I also believe there is plenty of room to help it along.

One way to help innovation is TTIP, the Transatlantic Trade and Investment Partnership, an agreement the U.S. and the EU are currently negotiating. It’s a free trade agreement, and potentially much more, as we are also seeking to find ways to reduce regulatory and other non-tariff barriers, though without weakening protection for consumers and the environment.

Now there are a lot of good things about TTIP, but I want to focus on one aspect of it first: opportunity. When rules or circumstances change, opportunities appear. The people and companies that are the most innovative – the ones which are the biggest risk-takers, and least fearful of failure – take advantage of those opportunities best. It’s that simple.

TTIP is not primarily about the big guys. Microsoft already knows how to work in Europe, and Siemens knows how to work in the United States. Rather, it is the medium and little guys who need the help that TTIP can offer.

If we do it right, TTIP will finally open the marketplace to those medium and small businesses who have found the American market or the European market too complicated and too daunting. TTIP can also open our marketplaces to a new burst of innovation, by creating more links among entrepreneurs.

Creative Minds

The United States and Ireland are at another crossroads yet again, trying to determine how to address new immigrants, both illegal ones who are already present and future legal immigrants. Ireland’s demographics are changing quickly. Just a decade ago, one in six children born in Ireland were born to parents who were not born here – and now that figure is above one in five. At least 50,000 people are immigrating to Ireland each year. Opening the doors to new immigrants can feel risky – but it also creates opportunities, and rewards that might not be realized otherwise.

Another way we can be better by embracing our diversity is what I call Creative Minds – a program I began several months ago. Its goal is: to bring over the best U.S. musicians, filmmakers, artists and entrepreneurs to share their expertise with young Irish audiences. We intend to make new creative economy linkages and cultural connections that strengthen the bond between our two countries for the next generation of artists and innovators.

For example, we’ve had writer and director David Chase speak about his hit series The Sopranos. Multi-platinum selling recording artist, Ben Folds, came over to give a concert and teach songwriting masterclasses for music students. We’ve had the director and producer of Pixar’s newest blockbuster animation release, Inside Out. We then had two Oscar-winning musicians, Ireland’s Glen Hansard and America’s Paul Williams. Through this series, we can improve this transatlantic partnership that is already extraordinary, by putting our creative minds together.

Winston Churchill said, “Success is not final, failure is not fatal and it is the courage to continue that counts.” Failure does not prevent us from starting again, and even when we’re successful we must keep persevering, and innovating, and seeking to improve. It is a lesson we can all remember when we are at a crossroads. Because sometimes when you are at that crossroad the right decision is simply to take that fork in the road, as Yogi Berra would say, wherever it may lead, instead of not taking a risk at all.

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