Is there a 2nd best innovation ecosystem?
Answering the question “what is the 2nd best innovation ecosystem in the world” is both provocative and eye-opening. No one seems to be able to identify a comparable model to what Silicon Valley has built over the last 50-60 years (see this cool timeline from NPR). And the second “rank”, if it still makes sense to compare ecosystems (we should connect ecosystems instead, as we wrote in a previous article) is a good way to start a never-ending debate. The Global Entrepreneurship Summit offers the best possible platform to gather thoughts on ecosystem building and management. It is a political summit, where government agencies meet community leaders and builders. It is an event with more than 100 countries represented. You can read the wrap-up of the opening keynotes by John Kerry and Malaysia PM Najib Razak. The panel we attended on emerging markets was a key opportunity to hear ecosystem players from Russia, Tanzania, Indonesia and the United States on one stage.
All continents under one roof at Kuala Lumpur’s Global Entrepreneurship Summit
Startups must think big
Russian speaker Peter Tatischev assessed a similar issue in Russia and in Asia, where “there is no global vision“. The modern world is not bound by any borders so we must address the global market, but few actually do it. A successful innovation ecosystem must help startups go global. The risk of not doing this is to find many local copycats (such as the countless cab sharing or ticketing apps), with little reach. Without a vision, he adds, “people start a business for the lifestyle, not to solve real problems, local problems”, which is something that echoes in any city too focused on copying the Silicon Valley model, forgetting the local context that they work in.
For startups to thrive, government must facilitate, not manage
Indonesia, says Salahuddin Sandiago, is not exactly Silicon Valley, as “our culture is not fostering entrepreneurship“. The government used to be very much in control of the economy and as a result, only 0.18% of Indonesian people are entrepreneurs. The question posed to the family of Salahuddin, now an established player of the tech and VC scene in Indonesia, is always the same: “now that you are a successful entrepreneur, when are you going back to school to get a PhD”. With 19 million more middle-class consumers in the next 15 years in Indonesia, any new product is bound to be a success. It is a huge field of opportunities. Still, issues remain: it can take up to 6 months to create a company in Indonesia, and only a few hours to have it closed down.
Alternatives to the Silicon Valley (note: Morocco will host the next GES in 2014)
Startups must Connect & Cooperate, instead of Compete
Adam Stelle, from UP Global, the umbrella brand behind Startup Weekend and Startup Digest, tries to “ignite the initial spark” with hackathons taking place worldwide, because this is how you can start to gather a community of entrepreneurs, VCs, mentors, tech brands, bottom-up. And an ecosystem is not only about startups, he adds. “In the Middle-East, the startup ecosystem rose at the same time as the political activity, probably not coincidentally”. This is the vision that Obama’s Global Entrepreneurship Summit embodies, to create links between the youth of Muslim and Western worlds through entrepreneurship. At Kuala Lumpur, a new partnership between the US administration and UP Global was also announced, to support 500 000 entrepreneurs in 1 000 cities with a connection to mentors and investors.
Startups must focus on their local context
David Rose, a super-angel, gave insights from New York. “NY is the capital city for finance, for advertising, and many other industries. An ecosystem is anchored locally, and must take advantage of the existing entrepreneurial base“. This is clearly a good approach as it will help innovation ecosystems across the world to differentiate, be complementary rather than competing. The internet makes it possible to connect established industries in a new startup model. “Silicon Valley is an unusual creature, and you don’t have to be Silicon Valley“ he adds. “Find people fit for entrepreneurship, find your local identity and key strength, and then you can start to push an ecosystem”. Nairobi in Kenya, for instance, is seen by many as both the most advanced African hub and a top global player for mobile payment technologies and service.
The map of startups in NY as seen on http://mappedinny.com/
George Mulamula, CEO of Tanzania ICT incubator (DTBi), confirms the necessity for an ecosystem that is both locally relevant, and globally recognized. The DTBi entrepreneurs program he manages for the government of Tanzania has a “copycat syndrome” like anywhere else, but people are also keen to work on rural issues which are important for the surrounding countries. This makes even more sense in Asia, where as some say, the great divide is between an urban elite (they have smartphones, they know about apps), and the countryside, where feature phones are still used a lot and numerous problems remain unsolved (you can read this report from Gwendolyn Tan, a key observer of the Singapore and ASEAN tech scene). Again, the topic of innovation ecosystems invites a few conclusions:
- Don’t benchmark against the Silicon Valley. Think locally, find your differentiation in your history and economic strengths. Yangoon is not San Francisco. Moscow is not Sao Paulo. Both a strong local identity and a local community are key to avoid the copycat syndrome and make innovation impactful.
- Play globally from day one: you cannot keep being a “big fish in a little sea”, as Chris Anderson shared with us on the closing networking night. Other countries can face similar issues and your project can answer these, it will be a great way to make a local startup known overseas.
- Don’t expect everything from the government, a “necessary evil” which has difficulties knowing when to stop intervening. A government should enable an ecosystem, not manage it. In Russia and Indonesia, changing rules were said to be an obstacle for startups who have to adapt to a new set of laws every so often.
A shared interest by the panel was to detect best practices from other ecosystems to try to adapt them, which is what our project is about. We are traveling to 10 innovation ecosystems from now till June 2014 to share findings from key events, trends, contacts, contents and tools for ecosystem enablers and managers. We’ll keep you updated! Check out our report on Malaysia innovation ecosystem on Slideshare too