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The past five years has seen exponential growth in interest in innovation. Corporations have increasingly hired Chief Innovation Officers and built capabilities to drive innovation internally. Entrepreneurial careers have increasingly gained legitimacy in the eyes of Educational Institutions and aspirational Asian parents. Governments are increasingly seeking to create competitive advantage through the ecosystems they build to support innovation. We've reached an age where change is accepted as good. And are fast approaching an age where rapid change is simply …. normal.
So how do we create ecosystems that help the new normal to thrive?
The best ecosystems don't occur by chance. They are enabled by Education, Communication and Corporations. If you look at the greatest startup ecosystems around the world, they are characterised by the same elements. Access to learning. Generally they are formed around or near one ore more globally recognised Educational institution. Access to catalyst spaces for communication and collaboration. These spaces include co-working space, incubators and accelerators and give startups and spinouts access to share experience, diverse thinking and new resource. Access to leading corporations whom serve as customers or validators for commercialisation.
In traditional terms, great ecosystems catalyse R&D, collaboration and rapid market validation in short cycle times.
Innovation happens at light speed today because these three key elements occur in close proximity. The cycle time between concept and market validation is greatly shortened and is subject to great diversity in thinking along the way. This collapse in cycle time has led to another collapse. The collapse of the slow moving corporation. Lifecycles of S&P 500 corporations has dropped from 67 years in 1920 to just under 10 years by 2013. It may not be long until we see the impact on slow moving countries.
So what role does a government play? Chaos or control?
MIT is a great example of a successful ecosystem where market forces are intermediated by design. As a source of phenomenal R&D, the school has catalysed an incredible ecosystem in Cambridge Massachusetts. One core intervention by design is co-working spaces. The school has not focused on building the lowest cost co-working spaces, but has built co-working spaces in areas with the highest confluence of traffic. In other words, it gives enormous value to creating opportunities for the greatest access and diversity. Governments can learn from this. Rather than seeking to create enclaves at the edge to minimise cost, they should seek to maximise diversity, interaction and opportunity.
Building a vibrant ecosystem doesn't work in locations lacking vibrancy
Corporations face the same challenge in building their innovation ecosystems. How do they effectively assemble the same elements: Learning, collaboration and commercialization in way where collaboration exists at the center? Companies like Google have well understood how collaboration sits as a catalyst within their organization. Their cafeteria serves as a catalyst for converging traffic and giving people access to diverse thinking. It is as much a work space a dining place.
"Google Cafés, which are designed to encourage interactions between employees within and across teams, and to spark conversation about work as well as play." - http://www.forbes.com/sites/laurahe/2013/03/29/googles-secrets-of-innovation-empowering-its-employees/
There is often a demarcation between intrapreneurship and entrepreneurialism. The reality is we need both. The boundaries between intrapreneurs and entrepreneurs are blurring. Innovative companies are beginning to build platforms that enable them to spin in and spin out companies. They are discovering their ability to create value goes beyond their traditional boundaries of home generated product distribution. Corporations are starting to become less important than the ecosystems they create. And from the entrepreneurial perspective, the reality is that in 2014, 86% of VC Exits were M&A by the industries they aimed to disrupt.
For Governments, of course resource is finite. Creating a world class ecosystem requires a portfolio focus on the economy. Building world class education and R&D centers with great access to commercialization and capital. But more than anything, they need to create intersections of opportunity. Catalyst opportunities to shrink cycle time from R&D to Commercialisation through the creation of vibrant collaboration centers at the crossroads of entrepreneurial and intrapreneurial endeavour.