Do Major Startup Ecosystems Help or Hinder Innovation?
Jun 19 , 2016 | By Sanjay Shah
Changing Landscapes of Startup Ecosystems
The pros and cons of individual startup ecosystems have been hotly discussed and debated in recent years, but how these ecosystems operate in conjunction with each other on a global level has excited far less consideration. Indeed, on a more basic level, the question of whether major startup ecosystems are generally beneficial or damaging to certain aspects of startup growth and development remains unexplored.
In mid-2015, Startup Genome published a global startup ecosystem report. It described, analysed, and ranked the world’s top startup ecosystems based on certain factors including performance, funding, and market reach. It is a monumental 156-page testament to the revolutionary changes which have taken place in how technology focused enterprises are founded, developed, nurtured, and scaled.
Not long ago, the term ‘startup ecosystem’ could only justly be applied to a handful of very specific locations, most notably Silicon Valley, which had for over 2 decades marked itself as a unique ‘hotbed’ of technological creativity- the birthplace of many globally successful firms and the go-to destination for innovators seeking large-scale success.
In 2016 the global landscape of startup ecosystems is unrecognisably reshaped, with the success of major hubs such as London, Berlin, and Tel Aviv being much described and applauded.
Do Geographical Restrictions Stifle Innovation?
With Western European and North American startup ecosystems now arguably ‘well developed’, pioneering eyes are turning evermore eastward to emerging markets which are expected to undergo a similar rapid-development in the coming years.
But no matter where in the world an ecosystem grows, it will invariably be categorised and restricted by its geographical limitations.
The prevailing notion of Startup ecosystems as individual and location specific entities could arguably have significant negative impacts on startups, corporates, and investors operating within them. At the very least, these self-made geographical restrictions encourage an inward-looking mentality, which can obscure potentially greater opportunities which exist beyond the local ecosystem ‘bubble’.
With new startup ecosystems quickly blossoming, and old ones moving towards maturity, we wonder how sustainable this apparent mentality is, and whether categorising ecosystems purely by geographical location creates a potentially restrictive environment for all concerned?
Some of the drawbacks which come from such a limited and conventional approach can include:
- Entrepreneurs struggling to find suitable investment opportunities to help them develop and scale
- A limited range of opportunities for valuable collaborations between corporate partners and startups
- Difficulties in accessing the best talent which is often dependent on the quality of candidates being created by local universities and other educational institutions
- The development of an insular mindset which blinds startups to the opportunities beyond their immediate locale
- Business development being hampered by prevailing attitudes, perceptions, or mindsets within a particular area
- The growth and development of an innovation being disproportionately impacted by the local market which can often be a poor representation of wider conditions
With these in mind, it is fair to argue that a startup’s access to opportunities can be significantly impacted by their location within an ecosystem, with the same also being true of other key players such as investors who often face similar challenges.
Of course it would be incredibly naive to suggest that major startup ecosystems are inherently detrimental to tech innovation and entrepreneurship- that is clearly not the case. However, one might suggest that the local startup ecosystems have failed to keep-step with the global nature of the enterprise, and thus risk preventing their entrepreneurs from reaching their maximum potential.
A Disjointed Global Ecosystem
The challenge which needs to be overcome is that of a disjointed global startup ecosystem- a worldwide patchwork of opportunities with limited interconnectivity.
Collectively, this worldwide ecosystem has potential far greater than the sum of its parts, and could give the most promising innovators access to the opportunities they need to develop, grow, and scale regardless of their location or presence within a particular ecosystem.
Inevert is taking a proactive approach to bridging these gaps between global startup ecosystems by changing the prevailing insular mindset and connecting startups with corporate partners and investors from all over the world.
Creating these matches in a spirit of global cohesion rather than discord, presents a great opportunity for all with a stake in supporting innovation and entrepreneurship.
For startups themselves, this network opens up an incredible range of benefits beyond those currently available within their local ecosystem, providing a space where they can position themselves to access the best and most appropriate opportunities on offer.
"Inevert is a global platform bridging the gap between ecosystems, feeding innovation by bringing startups and corporates together, all on one platform."