Why Smart Societies Embrace Risk to Fuel Innovation

Jan de Vries · 2026-08-10

Let's be honest: risk makes most of us uncomfortable. It's that knot in your stomach when you're about to hit publish on a bold idea, or when you're deciding whether to leave a steady paycheck for something unproven. But here's the thing—without risk, progress just stalls. Harry Margulies makes a compelling case that societies need to accept and manage risk, not avoid it, if they want to encourage entrepreneurship, innovation, and real economic growth. ### The Fear Factor We've all seen it happen. A promising startup gets cold feet because the regulatory environment is too punishing. A founder decides to play it safe because failure isn't just an option—it's a scarlet letter. When a society treats risk as something to be eliminated rather than managed, it sends a clear message: don't try anything new. And that's a recipe for stagnation. Margulies argues that the real danger isn't taking risks; it's refusing to take them. Think about it. Every major breakthrough—from the lightbulb to the smartphone—came from someone willing to fail publicly. The question isn't whether we should take risks, but how we can create systems that make smart risks more likely to pay off. ### The Entrepreneur's Dilemma For entrepreneurs, risk is the price of admission. You're betting your time, your savings, and your reputation on an idea that might not work. In the United States, we've built a culture that celebrates this kind of boldness. But it's not just about attitude—it's about structure. When bankruptcy laws are forgiving, when investors are willing to back unproven ideas, and when failure is seen as a learning experience, more people are willing to take the leap. - **Tolerate failure**: A society that punishes failure kills innovation. - **Reward experimentation**: Not every idea will work, but the ones that do can change everything. - **Manage downside risk**: Smart regulations protect people without suffocating creativity. Margulies isn't saying we should throw caution to the wind. He's saying we need a framework that allows risk to be taken intelligently. That means having safety nets, transparent rules, and a culture that doesn't equate a failed venture with a failed person. ### What This Means for Europe Europe has been having a hard time keeping up with the United States and China when it comes to tech innovation. One big reason? The fear of failure is more deeply embedded in many European cultures. The recent EU Inc proposal aims to change that by making it easier for startups to incorporate and scale across borders. It's a step toward embracing the kind of risk-taking that drives progress. But a legal framework alone isn't enough. You need a cultural shift, too. As Margulies suggests, societies must actively accept risk as a necessary ingredient for growth. That means celebrating the entrepreneurs who try, even when they miss the mark. ### Progress Is Messy Here's the uncomfortable truth: progress is messy. It involves dead ends, wasted resources, and plenty of disappointment. But it also involves breakthroughs that make life better for everyone. If we want the latter, we have to tolerate the former. The next time you see a startup fail, don't just shake your head. Recognize it for what it is—a necessary experiment. And if you're an entrepreneur reading this, take heart. The risks you're taking aren't just for your own benefit. They're part of a larger ecosystem of progress that benefits us all. In the end, Margulies' message is simple but profound: risk isn't something to fear. It's something to manage, to learn from, and to embrace. Because without it, we're just standing still—and standing still is the riskiest move of all.