This article is part of the World Economic Forum Annual Meeting
What do Silicon Valley, Helsinki, Dubai, Shenzhen, Bengaluru and Singapore have in common? They each represent cities or regions with successful innovation ecosystems. They act as magnets for global talent, attracting innovative companies that help shape the future. None of them would have flourished without successful partnerships between public and private sector stakeholders. The world recognizes the need to create more such successful ecosystems, but they must support inclusive and sustainable growth.
Firms have always been forced to compete for survival in global environments, so it’s not surprising that innovation has always been high on the corporate agenda. More recently, regional and city governments have prioritized innovation ecosystems too, as they have come to understand their economic and social benefits. Leaders in the public and private sectors appreciate not only the economic value that innovation ecosystems create, but more importantly the social value they foster from job creation and the provision of avenues for attracting and retaining talent.
While innovation ecosystems or clusters are not a new phenomenon, recent exponential trends in technological progress – digital, biological and physical – have proven to be important drivers for conscious efforts in creating more of them. The success of Silicon Valley in particular has generated envy across the world, inspiring many different geographies to emulate it.
One example is New York City, which aimed to future-proof its economic leadership by building a Silicon Valley-inspired, technology-driven innovation ecosystem. Fueled by the ambition of Mayor Bloomberg, the city held a global competition in 2011 to attract a major technology university that could act as a talent anchor for a vibrant innovation ecosystem. Competition winner Cornell University has now established Cornell Tech on Roosevelt Island, in collaboration with Israel’s Technion.
Cornell Tech’s success has been bolstered by the many novel ways the university operates and interacts with key regional stakeholders, both private and public. For example, top research professors at Cornell Tech are required to spend part of their teaching time in local middle schools. Private firms can also rent space on the Cornell Tech campus in which to base their innovation labs, deepening collaboration with talented faculty and students.
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Silicon Savannah is a tech innovation ecosystem in sub-Saharan Africa, and it’s one of the fastest-growing in the emerging markets. Companies including Intel, IBM and Microsoft have invested more than $1 billion to support the growth of more than 200 start-ups. One interesting difference to other ecosystems is that Silicon Savannah companies aren’t focused on helping you park your car or fold your laundry, but instead on solving real problems where market solutions have failed.
Tech company BRCK is connecting off-the-grid schools to the internet using solar-powered routers and tablets. AB3D is turning electronic waste into affordable 3D printers that build artificial limbs. The runaway success of mobile money firm Mpesa, as well as regional governments’ significant investment in a new undersea fibre optic cable, have provided cheap reliable broadband. Average speeds in eastern Africa are faster than in the US. This has been a major contributor to the growth of Silicon Savannah. Its continued success will be predicated not on replicating Silicon Valley, but on leveraging its specific competitive advantages and focusing on its differentiating strengths.
As innovation ecosystems play an important role in creating economic and social value, we must ask if our current ecosystems have successfully addressed the most pressing issue on the global agenda: supporting inclusive and sustainable growth. The answer is not that heartening, in most cases. Despite the outstanding success of innovation ecosystems in areas such as Silicon Valley and Boston, swathes of the US, especially rural areas, remain largely untouched.
Brookings Institution has shown that since the financial crisis of 2008, 72% of the gains in US employment have accrued to the country’s top 53 metropolitan areas. The urban-rural chasm has contributed to the rise of populist political ideologies, not just in the US but also in many other developed markets such as France, Italy and the UK. The benefits of success are often not shared equally within the regions that serve as homes for these ecosystems – consider the high rents and house prices in Silicon Valley and Boston that have made living unaffordable for many.
We serve as the Co-Chairs of the World Economic Forum’s Global Future Council on Innovation Ecosystems, which seeks to provide insights on how to promote inclusive and sustained global growth. Initial discussions among the group have identified the following four key areas of focus.
1. New financing vehicles to provide not just patient capital, but capital that emphasizes inclusivity, as well as profitability.
2. Inclusive procurement, broadening the procurement base and levelling the playing field for innovators. Procurement strategies should be outcome-focused and support inclusive, sustainable growth.
3. Ecosystem mapping, creating a framework to show the connections between the different stakeholders of an innovation ecosystem. This would enable and support new entrants, making the system more inclusive and sustainable.
4. The acceleration of new ecosystems, especially inclusive innovation ecosystems in some of the more challenging areas of our world. Lessons and good practices in this context need to be documented and shared.
There are overlaps between the themes listed above and the areas of expertise and interest of many attendees at the World Economic Forum Annual Meeting 2019 in Davos. We invite fellow participants to reach out and collaborate with us in helping developing innovation ecosystems that are inclusive and support sustainable growth. This is our common endeavor, and we have to succeed together.
Article link: https://www.weforum.org/agenda/2019/01/how-to-make-innovation-ecosystems-future-proof/