Photo by Wonderlane is licensed under CC BY 2.0
What do Silicon Valley, Austin, Boston and New York City have in common? They all provide “entrepreneurial ecosystems” for high-tech startup firms. Good for them!! These organizations hold tremendous potential for economic prosperity – both regionally and nationwide.
In a technology ecosystem, individuals, organizations, investors, companies, mentors and governments all partner to stimulate and nurture the growth and success of new technology firms. Each ecosystem is a dynamic, self-regulating network and none of them are structured exactly the same way. However, the common factor is that each provides support, assistance and funding to selected startup firms in the critical first years.
Here’s a question that many cities and states are asking: is there a role for public policy? What role should government play in propelling or laying groundwork for these ecosystems?
Policy-making agencies are built to take top-down, data-driven approaches. However, entrepreneurial ecosystems are usually designed to be bottom-up environments. Top-down approaches, such as building science parks or providing funding for research and development, tend to use up public funds that come with stipulations that may or may not yield the desired results.
In an ecosystem, everyone works collaboratively, but each entrepreneurial team is driven by different motivations. And, since no one completely owns an entrepreneurial ecosystem, there is no unifying objective that motivates all participants.
Boston, a city known for its traditionally strong entrepreneurial ecosystem, is moving in the same direction. Last week, the mayor hired a “startup czar” to run Boston’s StartHub, a program that provides a way for local startup entrepreneurs to interact with the city.
Boston and Oregon, along with many other cities and states across the United States, have realized that there are challenges in designing effective policy for entrepreneurial ecosystems. So, rather than focusing on the static structure of any ecosystem, it is necessary to create structure for the forces that drive success.
Even the Global Entrepreneurship Index (GEI), which measures the health of the entrepreneurial ecosystems, cannot accurately identify common roadblocks within ecosystems. It’s possible to analyze hard data but it is the “why” of success that is hard to pinpoint.
The challenge, when public funding is utilized, is crafting a unique policy that fits the needs of stakeholders in each separate ecosystem. The most successful ones seem to be driven by a bottom-up approach and led by strong entrepreneurial individuals who have experience in successful endeavors. It’s quite clear that individuals with these types of attributes will be in high demand throughout the nation as the trend toward building entrepreneurial ecosystems grows even faster in the near future.
For updates on government funding projects connect with Mary Scott Nabers on Twitter, LinkedIn, or Facebook.