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Learning from Startup Ecosystems

Jonathan Ortmans, President, Public Forum Institute

It is true that governments cannot be ignored by entrepreneurs—they set the rules and incentives. But it should not be surprising that vibrant entrepreneurs typically show, at best, nonchalance toward government. Most government agencies across the globe remain inefficient and cumbersome—especially when you compare even a well-funded government program to a collection of bootstrapping startups.

My favorite news last week was the announcement about Startup Foundation just launching in various places like Boston, Los Angeles, New York City, Des Moines, and Sao Paulo to grow ecosystems for startup creation and growth. With funding from the Kauffman Foundation, Startup Foundation co-founders in each city are mapping their local entrepreneurial ecosystems. They are doing this by identifying influential leaders, programs and gaps in community resources, and supporting local initiatives that drive the creation of more entrepreneurs, startups, and jobs. They will also raise funds for local entrepreneurship support initiatives, amplifying effective efforts.

With this initiative, as with Startup Weekend who created it, there lies a learning moment. I have commented a great deal in this blog about the need for policies that make room for “messy capitalism.” Innovative entrepreneurship is indeed an untidy business where entrepreneurs birth ventures through a series of iterative experiments. You can measure results, but you cannot predict the outcomes. The challenge for our governments is that government employees, on the other hand, must predict outcomes to secure support and manage “programs” on a linear basis—keeping them tidy, organized and accountable through a few wins within a defined political timeframe. Startup Foundation, unlike the typical convening and coordinating role government is encouraged to play, commences with mapping and research—and best of all, while looking at the ecosystem as a whole, will keep it local, viral and grassroots-powered.

It is no new lesson that entrepreneurship and innovation are not fields where top-down programming or economic recipes often work. In fact, such an approach if anything misguides policymakers. Entrepreneurs already “undertake” with initiative – they are of course risk-takers who respond better to incentives in building healthy economies. Policymakers have many of the policy tools in their hands around taxes, intellectual property rights and regulatory burdens. But, entrepreneurs can lead government in finding smarter ways to unlock innovative entrepreneurship on the ground in local communities and then set it free. Entrepreneurs can adapt quickly to changing circumstances that are not in the plan. They can identify opportunities and gaps, instead of duplicating efforts. A bottom-up initiative like this keeps “politics local” and most importantly efforts like this can help track the size and growth of the ecosystems—something government and entrepreneurs can agree upon as vital in efforts to find tomorrow’s employers and iconic brands.

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