GRAPE VINE

Why the road to Mandalay is not lined with dotcoms

The climate is hot and arid. Schooling is a problem, and the native population reads few books. People cultivate a laid-back lifestyle, do a lot of drugs, and almost universally dislike their government. Discipline is not a commonly shared concept.

Where are we? We could be in a stereotypical banana republic in some tropical hellhole, where annual per capita GNP is less than the cost of a Sony Playstation and intermittent civil war causes the UN to threaten to send Richard Holbrooke in to mediate -- but no, we are in California, source of the Internet revolution, Marilyn Monroe, avocado sushi and other wonders of American innovation.

California defies belief. Compared to the intensity of New Yorkers, Californians are positively catatonic. Nobody shouts at anyone, and car horns are optional accessories that are used as often as a Tokyo policeman's pistol. (There is of course road rage on LA's freeways, but that supercedes horns and is conventionally settled with a range of weapons, or, in the latest technique, with vicarious pet assassinations).

So how do they do it? How do they keep coming up with all these great ideas in aerospace, defense industries, computers, movies and Cabernet Sauvignon production? Or, to put it another way, if California gets it, why doesn't Burma -- which is also hot, full of mellow Buddhists, any amount of drugs and has a universally hated government? Why is the road to Mandalay not lined with dotcoms?

True, the Burmese junta in its wisdom recently decreed that the Internet was basically against the law, which may go some way to explaining the lack of venture capitalists at Rangoon airport. But there must be more to it than that. A few government regulations never scared off a true start-up enthusiast -- witness China, where the entire cyber industry has been set up in direct contravention of government regulations, only to see the government repeatedly retreat as it realizes it cannot control the Internet revolution.

Why are 21-year-old's in California driving Porsches to their skiing chalets around Lake Tahoe, while their counterparts in Burma are tramping through malarial jungles chasing 12-year-old rebels in one of the world's longest-running civil wars? Is this quality of life?

The answer, it seems, is the Californian ability to capitalize on failure -- whether it be a defunct IPO (response -- ask for five times as much money on the next attempt) or a less than optimal bustline (response -- cosmetic surgery). Burma has achieved an admirable rate of failure -- politically, economically, educationally (an entire generation will miss third-level education because of closed universities). But it hasn't yet managed to work out that renewal strategy that Californians are so good at. So there is no upside of failure, no phoenix effect.

Forget the hot weather/cold weather paradigm for explaining relative progress in human societies. Otherwise Mongolia should have a thriving bioengineering industry. It is all about managing failure. California's bounce-back time is measured in nanoseconds. Burma is counting in generations. Which all goes to explain why Burmese investors were not involved in backing Kevin Costner's movie Waterworld. Failing to succeed -- an ambivalent notion.