COLLABORATION trumps IQ: ENTREPRENEURSHIP (CDR Innovation Economic Growth Model)

This book is a companion to The Mystery of Wealth (Ridley, 2020a) - the first complete economic theory of entrepreneurship. The path to widespread and accelerated entrepreneurship. The purpose of these two books is to demystify the causes of wealth and poverty like never before done. The Mystery of Wealth was the seminal comprehensive presentation of the CDR index. The CDR index is a mathematical model that shows how capitalism (C), democracy (D) and rule of law (R) jointly with natural resources and geography explain almost all economic growth. Rule of law attracts capital and democracy creates additional pathways for the optimal deployment of capital. As the CDR index is raised so is the real per capita gross domestic product adjusted for purchasing power parity. So, the question is how to raise the CDR index of a country. This book identifies the key lever as collaboration. Hence its title. The book will serve the needs of individuals who wish to gain a basic understanding of national wealth and the macro-economic growth and decision making that is responsible for wealth. The reader may start with a preliminary review of the information at CDRindex.blogspot.com and here in Chapter 1. The blog is intended for anybody, especially persons with a high school education and beyond. Chapter 1 explains wealth in general terms. It contains a summary of conclusions that flow from the basic CDR fact that the source of all wealth is human capital ideas of imagination and creativity. Cooperation is required for ordinary economic growth but through collaboration human capital is converted into capital stock of knowledge, machines, recordings, etc. that are used to create new products and services, and therefore extraordinary economic growth. It contains many conclusions that are counterintuitive and different from commonly held beliefs. Chapters 2 and beyond are intended for college and university students, and professionals. It is anticipated that through the study of entrepreneurship, students might gain a sense of ownership and purpose that places higher value in their own education. They might also become more supportive of the minority of students who choose entrepreneurship for a career and will likely pioneer future wealth building for society as a whole. We know from the companion book “The Mystery of Wealth” that economic growth is determined by the policy variables capitalism, democracy, rule of law (CDR) model. When natural resources and geography are added to the model, it explains approximately 90% of real per capita gross domestic product adjusted for purchasing power parity (GDPppp-international dollars). It is most impressive how few variables are required for explaining GDPppp. This is in keeping with the parsimonious principle of Occam’s Razor. These place growth economics on a sound scientific footing. The question remaining is how does a country raise its CDR in order to raise its GDPppp? This book shows that collaboration is responsible for inventing, permitting, and promoting rule of law, thereby raising CDR and in turn, GDPppp. Our objective is to explain and motivate entrepreneurship. Charles Darwin (1809-1882) might be paraphrased as having said “it is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Cooperation is practiced when people work together towards individual goals while benefiting each other unintentionally. The economic gain of all parties involved is acquired unintentionally. This enables ordinary economic growth and development. But human beings are also capable of collaboration. Collaboration is practiced when people work together intentionally towards shared goals and rewards. This enables the exercise of human ideas of imagination and creativity for innovation and the invention of devices and services not previously in existence.