Edward Lucas: Central Europe in the Global Tech Market (Episode 2)

Podcast Details:

Guest: Edward Lucas

Date Added: 12th May 2015

Length: 27 min, 09 sec


Richard Lucas welcomes his brother Edward to #ProjectKazimierz for a discussion on the role that Poland and Central Europe play in today’s global technology market and how history has affected, and continues to affect, perceptions around the world of Poland and Central Europe in terms of business.

Table of contents:
Why Poland is A Global Leader in Technology Innovation
  • 00:47 Sam’s Intro
  • 01:06 Richard Lucas Introduces his Brother Edward
  • 02:43 Global Reach of Poland and Central Europe
  • 03:50 Edward’s TED Talk Themes
  • 05:01 Richard Comes to Krakow
  • 05:56 Edward Comes to Krakow
Business in Post-Communist Era Poland
  • 07:48 British/Polish Relations and the Warsaw Uprising
  • 08:47 Poland in the Post-Communist Era
  • 10:41 When is it Too Late to Apologize?
Analyzing the “Peak West” Concept
  • 14:54 Is There Validity to the “Peak West” Concept?
  • 17:34 The Future of the West
  • 18:25 Immigration and Capital
The Cultural Effect on Entrepreneurship
  • 19:09 The Most Dynamic Companies
  • 21:17 Technology Innovation in Central Europe
  • 23:30 The Cultural Effect on Entrepreneurship
  • 25:12 Closing Thoughts from Edward


sam cook: 

Hello again, Project Kazimierz Podcast Listener, this is Sam Cook, co-host of Project Kazimierz with my co-host here, Richard Lucas, and we have a very special guest today, that I’m going to let Richard introduce because he’s probably better qualified than anyone to introduce our guest, Edward Lucas.

richard lucas: 

Yes, well, I’m not going to do much of an introduction other than to say straight over to my big brother Edward Lucas I’m very proud to be co-hosting here on podcast.

edward lucas: 

Well, it’s great to be here. I was a student in Krakow many years ago and I remember Kazimierz just it was in the communist period and I will say I feel I had a lot of my geo-political education at the hands of those who understood the situation in Europe much better than we did in the West. I was a foreign correspondent for 20 something years in Wesley, Eastern Europe and I’ve spend most of the time working for The Economist. I write books about Russia, Putin and European security and I have to say, although I agree with everything The Economist says about Putin, I don’t actually write the Russian coverage myself, that’s done by a very distinguished team of colleagues.


Well, Edward it’s great to have you here and I’m just tickled to finally speak to someone behind the excellence and reporting that is The Economist. I always used to tell my cadets at West Point that if there’s one news magazine that they should be reading is only The Economist, because if you read that cover to cover every week you get everything that you need to know about what’s important in the world and just the editorial quality of what you guys do there is amazing so it’s great to have you on here.


Thanks for your kind words. If you ever need another job our marketing department would like to hear from you.


Well, I certainly would do a great job marketing The Economist; I’d do it for free for you anyway. Edward, one of the reasons that Richard and I founded this show it’s really, we’ve centered the name of this podcast in Kazimierz, which is the intellectual heart of Poland but really it’s about innovation in Central Europe and when we talk about innovation that could be about entrepreneurship, but what we want to do with you today is really zoom out and take a global picture of how Poland and Central Europe fits into the broader trends that are going on the world today. We’re also very excited to announce that you’ve been able to commit to being a speaker at TEDxKazimierz on 23 May. And just wanted to explore a couple of the proposed themes that you’ve run by us and really just give the listener a chance to just hear you out discussing those and then maybe we can get some listener comments on that. So let’s talk about the 2 themes that you’ve proposed to go into in your talk, just mention them both briefly and then let’s dive into one of them and see what you’re thinking about.


Well, I think I’ve pretty much decided I want to talk about the question of whether it’s too late to apologize. I know your theme is “Never Too Old” and I’m fascinated by this question of historical memory and responsibility and apology which of course is extremely important in the British context because of all the terrible things that happened on Polish soil, to Poles and to others at the hands of occupiers and all the issues of collaboration and perpetration that go with it. And I think we, although this theme of collective responsibility and apologies is very much woven into our modern political discourse, I think, but it’s often quite muddled, so I think that the themes I’m particularly interested in talking about. Of course I’m also very interested in the question of innovation. I used to cover the economies of the Central and East European region and one of the things I feel very strongly is that the dynamism of the so-called new member states in terms of entrepreneurship and innovation and so on has a lot to teach the slow-growing and stagnant economies of Western and Southern Europe.

“I feel very strongly is that the dynamism of the so-called new member states in terms of entrepreneurship and innovation has a lot to teach the slow-growing and stagnant economies of Western and Southern Europe.”

Edward Lucas, Journalist

Well, Richard I just wanted to bring you in here because I’m really interested, both of you have a bit of a history in Krakow. How did you both come to study and live here? I’m not really familiar with that history for you either Richard.


Well, I didn’t come here to study, but I came here to work with my 1st job after I graduated was with a consulting company and in those days in Cambridge in the UK Eastern Europe typically was covered all red on the map and the fact that I knew that Poland was a separate country and I knew where Warsaw, Prague, Budapest was made me an expert. I came here doing what I thought would be a wonderful job helping Poland come out of its post-communist economic transition and discovered that the aid industry for Eastern Europe was anything but what was really needed. It was mainly aid for consulting companies in Western Europe and I called it a school dinner problem where whenever you have a different person consuming a different person funding and a different person taking the decisions nothing quite works out as it should do.

So then I managed to find myself a job with counterparty Krakowskie Towarzystwo Przemysłowe teaching their business school and with the age of 24 was teaching a bunch of 40-year-olds about how to start and run a business and very rapidly ended up going into business with one of them. So that was my history I was never a student here in Kraków other than the poorly taught language course at Jagiellonian University which didn’t teach me much more than to say something like “Dwie piwo proszę” – “Two beers please”.


Well, Edward, you originally made the decision to study in Krakow, was that how you got into Eastern Europe first?


I think both Richard and I grew up in a household which was which was quite unusual for Britain in the sixties and seventies and our parents, particularly my father who is a philosophy teacher was very preoccupied with Eastern Europe. We had great friend, family friend called Zbigniew Pałczyński who had been in the Warsaw Uprising, was then leading British expert on Hegel and talk politics at Oxford. I myself held and ran an organization called Student Solidarity with Solidarity in the early eighties which I don’t think gave any difficulty for the Communists but was very educative for me and then in the mid-nineteen eighties when I was working at the BBC, I decided that it wasn’t enough to speak German, which I did speak, (…) but I wanted to really get to grips with Poland and so I came to the summer school at the Jagiellonian University in 1986 and rattled with Polish irregular and indeed with regular verbs with huge success in that I do get the kind of basic of Polish which had been a huge help to me ever since in all the places I’ve been to.


So you have a strong family history and I think one of the things that you brought up is really interesting, I’m quite embarrassed to say that I was a historian and taught history at the US military Academy and really had not learned that much about Polish history because we talked great power politics and Poland didn’t quite register in some of our texts that I used and since I got to Poland I’ve really dove into the history books and looked at the relationship between Britain and Poland in World War II and the history of the Warsaw Uprising. There seems to be quite a bit of a strong connection over that but also a bit of guilt and a very complicated relationship between Britain and Poland in that respect and the United States doesn’t even seem to acknowledge anything that they’ve neglected on that part but the Brits seem to. What is your perspective on that, Edward, and how has that shaped the emergence of Poland in the post-communist era?


I think that there’s 2 ways of looking at this and one is what you might call the kind of sentimental martyrology of history which is a very planocentric one and it’s all about the outside world doing terrible things to Poland and then refusing to say sorry afterwards. You can argue about whether the Nazis or the Soviets did worst things to which category of Poles, but Britain is sort of up there as a kind of terrible disappointment of betrayal and I can absolutely understand that on a human level. But I think from a historical level it makes much more sense to look at what was actually going on and why the people involved made the decisions that they did, and also let’s remember that the guilt doesn’t lay in 100% on one side or the other, and so I often bring up for example the Anglo-German Naval Treaty of 1935 which I think was actually the beginning of the real disaster, cause it meant that Britain was no longer a Baltic naval part and that really created this very sort of lethal division between Germany and the Soviet Union. Eastern Europe had to decide one way or another and the whole idea of the intermarium and the buffer disappeared. But I think also mistakes were made by the leadership of the countries concerned and I would criticize Smetona for example, the Lithuanian leader, for his treatment of Poland but I would also criticize the Poles, their treatment of Lithuanians. I think once you drill down one can see that mistakes can be made in all sorts of ways sometimes with consequences that are quite disproportionate to the size of the mistake. But still from a historical point of view it doesn’t do any good simply just to paint the whole thing in terms of emotion.


So, Edward, that leads into the team that you’re talking about which is when is it too late to say you’re sorry and why have you kind of decided in a TED talk, you have a very precious theme to present, why is that so important to you and how does that tie into your experiences in Eastern Europe and just looking at the broader context here in central Europe?


I think there’s two interesting aspects to apologies. One is the question of how far I’m entitled to give an apology. So if I do something bad myself, then clearly I apologize. If a close family member does something wrong well I may also apologize on behalf of my brother who’s done something bad, of course that would never actually happen.


Theoretically, theoretically.


Or theoretically he might have to apologize for me.


That’s completely unimaginable of course.


So we do make apologies on behalf of other people, sometimes we apologize on behalf of or pets, if your dog does something bad you can apologize because that sort of duty of responsibility, we apologize when our children who have done things. Obviously I do think apologies are strictly personal but I get quite uneasy when people are apologizing for stuff that really they had no personal word in, say I’m not sure as a Brit I can apologize say to the Ukrainians for the fact that my country hasn’t honored its signature on the Budapest memorandum. And I get even more concerned about apologies to things that happened a long time ago because theoretically you can say, as someone who is alive right now, I should have chained myself to the railings outside Downing Street, you know, I’m a political person, I have a political role, I could’ve done more, and the fact that my country does something I bear some responsibility for it. If it happened before I was born then I really don’t understand what the apology was about, but on the other hand I do feel that there is a question of responsibility. If you know your country has done something quite bad in the past, I do think you have the responsibility to know about it. First of all, educate yourself, find out what happened, get to grips with the facts. And that’s a sign of respect to the people who suffered at the time. You can say I wasn’t born at the time, but I do actually know the story of the Warsaw Uprising and Yalta and all these other things that happened and I’m not just brushing it away. There’s a famous saying about Irish-British relations which is “Irish never forget and the British never remember” and I think there’s quite a lot in there.

And then the second question which is are you actually going to do anything? So I have young West German friends, they are not young anymore, but when I was young and they were young and indeed when Richard was young – he’s even younger than us – they would go off for the Wiedergutmachung, the reparation work where they would go and work in the old people’s homes in Israel doing very menial sort of jobs but just to show that as a young German they realize that the shadow of the Holocaust still hung over their country and they just wanted to do their bit so they could feel they have done something and my ex-wife’s mother, my ex-mother-in-law as soon as the war came down in East Germany they just very quietly went off and tidied up the Jewish cemetery which had been allowed to fall state of terrible disrepair in their hometown of Gota and again that was a very important thing and they were able to find people from Gota , Jews from Gota who had fled before the Holocaust who were living in Israel and were able to come back and that rather sort of more than just symbolically was sort of healing the wounds between the German Germans and Jews of German extraction. So I think there are things you can do but I think it’s a very chewy subject and I shall be happy to try and talk about it at some of the Kazimierz TEDx.


And just a word of clarification, a lot of people muddle TED talks and TEDx talks a name, as someone who has a license from TED to do a TEDx, people like to say they’re giving a TED talk when they’re not and sometimes TEDx talks do get on to TED.com with 30 or so million page views every month and I hope very much that Edward’s still makes it, but that has yet to be achieved.


I’m absolutely honored to be doing a TEDx talk and I have no ambition to do anything more.


We’re very excited to hear this topic. One of the of the other topics that you’d had brought up, Edward, which I thought was really interesting and I thinks fits into this geo-political movements that are happening right now at the margin level is this theory of peak west, kind of like peak oil, which as the energy editor for The Economist you’ve seen the peak oil has constantly moved out into the future. Is that the same phenomenon you’re seeing in the peak west, people calling them the Western movement?


I think there’s never really been a golden age actually, and if you look back over the history ever since we started talking about the West it’s always been a bit of a shambles. It was in the early years of the Cold War it was very tainted by the way which we co-opted some elements of the Nazi regime both as rocket scientists intelligence and so on and we had huge upsets during the 1960’s with the whole student and youth revolt and then during the 70’s it was economic failure, during the 1980’s we had great divisions between Europe and America and then in the 1990’s people said the west is over and like there was a very brief moment of huge American self-confidence in the sort of late 90’s when people really talked about, it was a single part but that was really a moment of American hubris rather than the Western. It’s kind of normal to bash the West I think but the fact is there are these bunch of countries that are more or less run by people who are more or less interested in doing the right thing in order to get elected who aren’t there just to steal money who don’t habitually rig elections who allow the countries in which you can sue the Government and when, which to me is the absolute foundation of a free and law-abiding society. And it’s still there and although people may say that it’s past it, I don’t see people saying we really want to be run the way that China’s run. We certainly don’t see people saying we want to be run the way that Vladimir Putin’s Russia is run. So I think that just as peak oil runs into the problem that when are we going to get peak technology. I think the West runs into the problem of when are we going to get peak aspiration? If people would really happily settle for being less free, having fewer legal rights, for being more bossed around by politicians who are more corrupt, then I would say fine, well then the West is over. But as it is people seem to have an inexhaustible desire for freedom and justice and for good government rather than bad government and so long as these aspirations are there I think the worst will still be in business.

“People seem to have an inexhaustible desire for freedom and justice and for good government rather than bad government and so long as these aspirations are there I think the worst will still be in business.”

Edward Lucas, Journalist

I’m just coming in on that, my nephews and niece, your children and my children, they’re cousins, I see in the younger generation a completely different relationship with the world as a result of technology and although I think drawing out the implications is going on in the present there’s a different expectation of empowerment that once, when we were small, when we were children, we could go and print leaflets, and of course everyone’s drowned in an overloaded information, but I do think the younger generation has the potential to be far more empowered as we do, as every age does in fact, but the younger generation in the digital age has grown up in a different environment and so I don’t think that, I think it means “the West” is the wrong term because this brings together the younger generation from all over the planet.


That’s a fascinating insight into that Richard is the way that technology has brought into relief to the West, it’s relationship with the rest of the world and I think as more people see the West really, the proof is in the numbers. Are people not immigrating to the West anymore? Are people leaving the West and going to Russia or going to China and really that’s how people vote in terms of what they’re aspiring to. I don’t think anything’s really changed in terms of immigration flows and capital flows and some of the big trends that would lead to a decline at the West.


Edward, do you think that people overgeneralize? You talked about the dynamism of Central Europe as opposed to the sleepiness of Western Europe but I looked at the most dynamic companies and people here, I admire them greatly, but equally find lots of dynamic and enterprising companies in Western Europe and the United States. Do you think you can generalize at the level of Eastern Europe or Central Europe is more dynamic and the West is less dynamic or do you think that’s simplifying it too far?


I think it would be too much of a simplification to say that the East Europeans are dynamic and the West Europeans aren’t. I think we have a north-south split between the more open and dynamic economies of Northern Europe and the perhaps more restricted (…) ones of Southern Europe. Obviously, even within Southern Europe you have a lot of very dynamic companies, for example in the Transylvanian part of Romania is really ‘go ahead’ place which feels much more like the Baltic States or somewhere like that than the rest of Romania which does have a bit of a feeling of the Ottoman Legacy perhaps sitting rather heavily on it. But I think there’s one very important point, which one can generalize, which is that in 1989 there was whole generation of people who decided to throw their talents into business because they could, being frustrated by the communist system, maybe they’d even be running businesses in the late communist era and then sort of cut their teeth as entrepreneurs from the mid 80’s onwards. And these are people who perhaps in Western Europe might have been working in the Public Sector or the voluntary sector or in the academia or a whole range of other things, which would also give an outlet to their talents, but in the conditions of economic emergency which we had in 1989, they wanted to feed their families, they saw a chance perhaps it was very open, new era and a chance to make some serious money and so people dived into entrepreneurial activity in a way that perhaps their counterparts in Western Europe didn’t and I think they’re still in some extent profiting from the legacy of that.


In terms of innovation I know you recently came back from a trip to the south of the United States, to the energy capital. I think you were in Houston, Texas and you were talking about how advanced the oil and the technology is there. Do you think that the fact that these technologies are available globally actually is an advantage? I have a sense that I have better access, the younger generation has a better access to information here as do people everywhere thanks to the internet. There used to be a tremendous information deficit here and now the smart people here have access to the same brainy people in the United States. Do you think that’s an important factor?

“I have a sense that I have better access, the younger generation has a better access to information here as do people everywhere thanks to the internet. There used to be a tremendous information deficit here and now the smart people here have access to the same brainy people in the United States.”

Richard Lucas, Entrepreneur

Well, I think certainly the sort of velocity of circulation of information has increased dramatically. Everyone is able to find out very quickly this worked in Houston but can we make it work here. But I think one must be very careful not to overstate it, with tracking for example, the really enormous productivity gains going on right now in the way in which American fractures work they’re using a smaller number of rigs to drill more wells, they’re drilling wells much more efficiently, they’re closing the water cycles, they don’t need to truck in so much water, they’re making each individual frac much more effective is that the moment roughly one in every 2 frat doesn’t actually and if you can change that to 1 in every 3 that doesn’t work you get a huge productivity improvement and yet we aren’t really seeing yet Fracking taking off outside of the United States because there are other cultural and regulatory things which mean it just doesn’t work. See it works for the United States because if you own land you in the middle rights below it so that immediately simplifies the legal regime. These are very sparsely populated, not very prosperous areas where people are very happy to have a bit of environmental destruction in exchange for the loss of money.

In cases like raw Britain, people don’t really think like that they would rather have less money and more peace and quiet. So I think that one has to be careful about saying that technological innovation marches relentlessly around the globe, it’s there if you want it but the other conditions that still have to be there to make it applicable.


Indeed, also culture affects entrepreneurship in general, people in Poland here in Krakow, people tend to look to California and Silicon Valley and San Francisco as being the epicenter of how things should be but I feel that Cambridge where I lived for a number of years is real Cambridge you can’t be rather left out because I see the very, very tough brainy business minds there as being potentially world class but if you don’t have a chance to meet people face to face it’s very hard to build the trust network, sort of very important. And I think here in Krakow where we’re based we’ve kind of reached a critical mass which become self-sustaining but still not at the level of London Cambridge, let alone San Francisco.


I think that’s absolutely right and you’ve got to look at entrepreneurship really to start going in the way that Silicon Valley has. Unique combination of the talent, you need the right amount of money and so you need a sort of well-developed bench capital private equity system, you also need all the legal infrastructure. And once you put those things together then you can really see a great (…) of entrepreneurial activity but it’s quite a fragile path. I always get very cross with people who think wealth creation is automatic and all we have to do is decide how to spend it. Actually, I think wealth creation is incredibly fragile and there are great many places in the world where they have lots of talented people who get absolutely nowhere and we should take much more time I think to study the conditions in which wealth creation happens and cherish that and try and spread it rather than only seeing it as a source of money for other things.

“I always get very cross with people who think wealth creation is automatic and all we have to do is decide how to spend it. Actually, I think wealth creation is incredibly fragile and there are great many places in the world where they have lots of talented people who get absolutely nowhere and we should take much more time I think to study the conditions in which wealth creation happens and cherish that and try and spread it rather than only seeing it as a source of money for other things.”

Edward Lucas, Journalist

Well I’m conscious of the time and if you remember the primary motivation and byline and the slogan and the mission of TED is “ideas worth spreading” so I think I’ll begin to draw this to a close. I appreciate that we’d rather overshot our time a lot but are there any closing thoughts Edward you’d like to wrap up with before we let you get back to your supper?


Well, it’s been great being here today on this podcast. I’m sorry time is drawing to a close, you can probably hear some clings in the background which is the sound of supper being prepared here in our home in London but I’d like to thank you, Sam, as well as you, Richard, for hosting me on this podcast and I’m looking forward very much to give you my TEDx talk and coming back yet again to Krakow which is the city which is almost the 2nd home to me and I wish you every success in the weeks ahead as you get rid of this most interesting and enjoyable event.


Thank you very much.


And, Edward, thank you just from a long time Economist reader and someone who is recommended your magazine to everyone I can influence in my career. So it’s a great work. You can go to one place as information becomes so abundant, you know editorial quality and curation of the right content is ever more important so thanks for doing that, being part of that for The Economist.


It’s a pleasure, we love working there and particularly when we get to meet our readers.


Thank you very much indeed. Ok, bye, bye.

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