Big capital is hampering entrepreneurialism

The capital markets are now a “net negative” in the pursuit of innovation and entrepreneurialism

That is the stark view of Roger L. Martin, institute director of the Martin Prosperity Institute at the Rotman School of Management.

Martin used the 8th Global Peter Drucker Forum in Vienna to fire a broadside at shareholders and big capital for being too conservative in their demands for business development. Instead of demanding and driving innovation, capital markets wanted repetition of proven concepts, he said.

“Innovation is being hampered by the pursuit of replicable outcomes,” Martin said. “The capital markets are now a net negative.”

Pointing to the tension in product development between reliability and validity, Martin said: “A lot of what people ask for is going away from what they actually want.” Customers and shareholders are requesting iterations of existing products, pushing companies away from creating disruptive innovation.

Using the example of Google’s diversification into the Alphabet multinational, Martin said: “I’m watching that like a hawk. I’ll bet shareholders will say of Google’s non-Google activities ‘stop it’.”