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Disorder and Dynamism

July 21, 2012 7 minute Read by Carl J. Schramm

Few adults on the planet are without strong opinions about why one city is nicer than another. Often the commentary involves analysis of city culture, the nature of the people in the city, and the way they collectively seem to live. While some prefer neat and orderly cities, it is the messiness of innovation that creates dynamic economies. If ever there was a city that reflects a well-ordered civic culture, it is Copenhagen, Denmark.

On a recent visit to the Copenhagen Business School I had the opportunity to walk the streets, take in the sights, and observe the city’s people and their out-in-public culture. The city and its citizens seem to like quiet. One reason for the quiet — instantly obvious to an American — is the city’s enormous amount of bicycle traffic. People ride bikes everywhere in Copenhagen, but, tellingly, only on prescribed bike paths and roadways. By our American urban biking standards, everyone in Copenhagen rides very slowly and, even more strangely, at the same speed. It seems as if there is an informal speed limit, a common social convention that is reflected in the locally built, very large and comfortable monochromatic bikes. They might as well be called personal transit devices. They surely look odd compared to American bikes, which are designed and decorated as if to say “speed machine.” Indeed, these days many Americans design their own bicycles — go to the websites for Republic or Solé bikes.

There is an unmistakable robotic quality to Copenhagen’s biking culture. It bespeaks order. It is enforced by the design of the bike-exclusive highways. Pedestrians do not walk on these well-paved paths that run through parks and neighborhoods. They are actually quite narrow but this may owe to the slow uniform speed of the bikers or, more likely, the narrow design compels this behavior. (Urban design commonly sets out to shape behavior to the standards government officials believe are best.)

Paths as narrow as Copenhagen’s would never work in the U.S., because some Americans want to go faster than others. In Copenhagen the errant biker who might like to short cut on a sidewalk that traverses a greensward would face his or her own design prohibition. Sidewalks are not friendly to bikes; smooth concrete is intentionally abbreviated every three feet or so by a slight depression paved with rough stones! Incidentally, this very design, at least to my observation, slows down walking speeds. It certainly requires more conscious effort to walk in public.

All this slowness causes one to wonder if there mightn’t be an effect on economic activity. Economic behavior is a complex and poorly understood aspect of the human condition. Those who believe that market systems generate more wealth and expanding human welfare know that individuals operating at different speeds are what competition is all about. Some people drive themselves to innovate and create, so others can enjoy better lives with new products and services. But in countries like Denmark, where the “equity” constraint is regnant, individualization, including stepping out from the crowd to push one’s ideas and to gain economic advantage, has been the subject of steady and conscious containment for decades.

When I was last in Denmark to offer views on how the country could achieve higher growth rates, one of the issues that arose was the culture value called “jante.” People don’t really embrace entrepreneurial goals, it was said, because someone who stood out from the crowd, saying he or she was going to make something better or faster or cheaper, would be frowned upon as criticizing how good things are and, more important, would be regarded as guilty of a kind of economic impertinence. Indeed, if someone were to start a company and become successful (the fear of failure in this society is an important deterrent by itself, I’m told), there would be very strong societal pressure, even after making a great deal of money, to remain living in the same style and continue driving the same car.

It is no surprise that the Danish economy continues to post only modest growth rates. This year it will produce an anemic 0.5%. Compare this with Germany, which can never completely contain its aggressive engineering/innovation culture and abide by the “equity” rules imposed by the E.U. German GDP will expand 3% this year, six times faster than Denmark. It is no wonder that Germany is Europe’s banker, despite allowing disorder in its economic life and has, by comparison, a radically “messy” urban culture (where bicycle speeds are certainly higher).

Once again, the presence of an entrepreneurial culture presents a lens into the social and economic culture of a place. When low levels of growth and low levels of new business formation coexist in one place, can one expect anything other than a physical place that is averse to “mess” and disorder? When life unrolls at a steady and predictable pace — where all jobs are secure, all benefits certain, and bike speeds slow and common — can one expect a dynamic city and economy to exist? If cities are the cradles of creativity, the most beneficial of which house ideas that can be expressed in commerce in ways that produce new products for better lives, can non-dynamic cities ever hope to grow? It’s not likely.

Cities with futures need some bikes to go faster than others. The slower bikers unfortunately do not know they benefit too from their ambitious peers — government urban planners don’t want them to know. It could be discomforting. Utopia only succeeds when everyone buys in. And what happens to those Danes that step out and strike it rich? Denmark is famous the world over for its expatriate entrepreneurs. Those who stay back home say that successful entrepreneurs can afford to live in the sun.

I suspect it has more to do with super fast bike lanes in sunny, flat (and culturally messy) Florida!


Author

Carl J. Schramm
Carl J. Schramm

2012 Economic Growth Fellow

Carl J. Schramm is recognized internationally as a leading authority on entrepreneurship, innovation, and economic growth. Currently he is university professor at Syracuse University. For 10 years he served as president of the Kauffman Foundation, making it into the world’s premier organization dedicated to the development of high-growth firms and understanding the role they play in economic growth. He serves as a visiting scientist at MIT and as a fellow of the Bush Institute. He is a Batten Fellow at the University of Virginia’s Darden School of Business and is a member of the Council on Foreign Relations. Schramm's most recent book, "Better Capitalism" (co-authored with Robert Litan) was published by the Yale University Press in September 2012. He has written several other books, including “Good Capitalism, Bad Capitalism” and “The Entrepreneurial Imperative.”

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