The value of entrepreneurship

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The value of entrepreneurship

Steve Jobs changed our lives by introducing entirely new ways of communication and interaction, but Elon Musk is out to change the world through novel ways of paying and driving, and even putting us into the outer world. The creator of the electric car company Tesla and rocket company Space Exploration Technologies (SpaceX) is the hottest man in the technology scene.

His latest work — Model 3, the affordable take on the electric car — received preorders of over 320,000 units in the first week upon its unveiling in early April. Musk claims Tesla will overtake Apple within the next 10 years by valuing over 800 trillion won ($696 billion). The prediction of Telsla’s worth expanding by 20 times from current market capitalization may not be that farfetched, given that the carmaker’s stock price had jumped more than 15 times over the last six years.

On April 8, SpaceX made a milestone step in its epic quest to develop reusable rockets to realize the entrepreneur’s vision to make human life multi-planetary by safely landing the main-stage booster Falcon 9 rocket on an ocean platform. The first-of-its-kind touchdown, as a part of the project to develop cheaper, reusable rockets to commercialize space travel, was achieved after 25 trials over the last 13 years. A booster is the most expensive and core feature of a multistage launch vehicle, but the U.S. National Aeronautics and Space Administration (NASA) has to let it plunge into the sea after liftoff and separation. Multibillion dollars are wasted. Musk claimed that a reusable rocket could reduce the cost by one-tenth. Ultimately, he is envisioning creating a human colony with 80,000 residents on Mars by 2030.

The engineering student dropped out of a Ph.D. program in applied physics at Stanford University two days after his application. Then he created Zip2, an Internet city guide, in 1995 and sold it to Compaq four years later. He was 28 when he pocketed $22 million from the sale proceeds. Though already a millionaire, Musk pursued onward. He acquired an Internet payment company in 1999 and renamed it PayPal in 2001. He sold it to eBay for $1.5 billion. He did not stop. In 2002, he founded SpaceX to develop space vehicles and bought electric car maker Tesla Motors as a part of his space project in need of electric vehicles on Mars.

Musk would have ended up as an eccentric dreamer if he was born in Korea. SpaceX had thrust vehicles throughout the last decade. Few took notice of his bizarre quest, but one — NASA — paid close attention. The United States was losing competitiveness to Russia and Europe in space exploration over two decades because the cost of liftoff was too expensive. It even had to rely on Russia for cargo transport on the space station. Experts at NASA sensed hope in SpaceX’s repeated failures. It invested 3 trillion won in the company and saved it from insolvency.

All had not been smooth for Tesla, though. The Wall Street meltdown erupted when capital investment in electric vehicles peaked in 2008. Even with all his personal wealth, Musk could not alone sustain the company. He separated from his first wife during this time. Musk had to reflect and pleaded to Google to take over Tesla. Then, President Barack Obama came to the rescue. The Department of Energy announced in 2009 that the country needed clean-energy vehicles and pledged $465 million in subsidies for the company. Tesla was able to release a mass-market electric car from then on and repay the U.S. government fully in four years.

Could our government have helped idealistic and highly risky enterprises like SpaceX and Tesla? It would have faced a probe from the National Assembly and the Board of Audit and Inspection if it had. Lee Jeong-dong, an engineering economist and professor at Seoul National University, says the United States has made itself a venture and start-up power as the administration considers enterprising ventures as public assets in which the government and society all share responsibility in the risk to enjoy future benefits. He advised the government to learn from the United States.

President Park Geun-hye went on a tour of creative and innovation clusters around the country. But what her agenda really needs is to ensure sovereignty in expert groups when the government invests in promising enterprises.

Intelligence agencies around the world envy not the U.S. stealth or missile systems but visionary minds like Musk. Intelligence and creativity can now define national power. Musk is still hungry for new ventures. He sparked competition from his technology rival Jeff Bezos, founder and CEO of Amazon, in the race for commercial space exploration. America remains an unrivalled economic power thanks to such bold entrepreneurship.

JoongAng Ilbo, April 18, Page 30


*The author is an editorial writer for the JoongAng Ilbo.

Lee Chul-ho
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