Interview: Dr. Zoltan Acs

Posted: May 29, 2013 at 6:27 pm, Last Updated: May 30, 2013 at 7:45 pm

Dr. Zoltan Acs is a Professor in the School of Public Policy and
Director of the Center for Entrepreneurship and Public Policy at George Mason University.


How long have you been at GMU? What do you teach?

ZA: I came here six years ago. I teach entrepreneurship and economic development to graduate students. I direct the Center for Entrepreneurship and Public Policy.

Tell us a little about your career before GMU.

ZA: I served in the government as Chief Economist at the Office of Advocacy of the U.S. Small Business Administration and Research Fellow at the U.S. Census Bureau. In academia I have been associated with a number of institutions, including the University of Maryland, University of Baltimore, University of Illinois/Springfield, Middlebury College and Columbia University. In Europe I helped to found the Max Planck Institute in Jena, Germany and have been associated with the Imperial College Business School in London, the University of Pecs in Hungary.

What got you interested in the subject of entrepreneurship?

ZA: As a graduate student in the 1970s/80s I did research on the hot topic of the day – inflation. I looked at the problems facing the steel industry, and discovered to my amazement that in many cases the big guys in the industry were being outcompeted by the mini-mills. That wasn’t supposed to happen because economies of scale were supposed to rule in the steel industry. This discovery got me interested in the phenomenon of entrepreneurship, and I have been looking at it ever since. It is complicated, like a big ball of yarn, and I just keep pulling at the thread to see
where it goes.

What is your main area of focus and why is it important?

ZA: Our Center for Entrepreneurship and Public Policy has developed the Global Entrepreneurship and Development Index (GEDI.) It measures productive entrepreneurship around the world. But not all entrepreneurship is productive, i.e., wealth-producing. There is also destructive entrepreneurship. I got interested in this subject a few years ago, when one of my PhD students, Samee Desai, wrote her dissertation on destructive entrepreneurship and its impact on conflict and post-conflict situations.

All entrepreneurs make money, but only productive entrepreneurs make the economy grow. When they get rich, society as a whole becomes better off. Destructive entrepreneurs get rich, but they make the overall pie smaller. You can see them on Wall Street, and you can see them on the streets in the ghetto. Then there are unproductive entrepreneurs, who neither create nor destroy value. They simply allocate to themselves wealth created by others. Finally there are underproductive entrepreneurs – those who create wealth, but do it very inefficiently. So there are lots of different kinds of entrepreneurship.

How does your work fit in with TraCCC’s focus?

ZA: Everyone studies productive entrepreneurship, at GMU and elsewhere. Yet our research suggests that only about 50% of entrepreneurship is productive. Very few people study destructive entrepreneurship. Louise Shelley is one of the few who does. So now we are looking at the possibility of a school-wide study on this subject. How do you transform destructive entrepreneurship into constructive entrepreneurship? It is a major policy issue. We can pretty much predict how many entrepreneurs there will be in the future, but how can we make more of them productive and less of them destructive? That’s the big question.

What is your most recent work?

ZA: It is hot off the presses: Why Philanthropy Matters: How the Wealthy Give and What it Means to our Economic Well-being (Princeton University Press 2013.) I have been writing this book for 15 years. It’s not a new subject. It has been happening since 1600, but no one has paid any attention to it. My thesis is that the uniqueness of American-style capitalism is that it allows people to create wealth by being entrepreneurs, but then requires them to invest back into society through philanthropy. It is not a legal requirement, but it is culturally ingrained. This is what makes the model sustainable. It is the great untold story of American capitalism, and the question is whether other countries in other parts of the world will adopt this
aspect of our economic system.

What do you like best about GMU?

ZA: It is dynamic. This is one of the few institutions of higher education to has gone from being unknown to having a global reputation in 15 years, so it is not set in its ways.

Where do you see room for improvement?

ZA: In the same place. In the six years that I have been here, GMU has changed. It is maturing rapidly and it needs to retain its innocence if possible.

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