Global Government Venturing Summit review
Posted on 16 March, 2015 by James Mawson, editor-in-chief
"Knowledge and ambition are here; Brainport is the most innovative region."
Neelie Kroes (pictured), vice-president of the European Commission until November, in a keynote speech at the Global Government Venturing Summit last month powerfully connected why governments matter in the innovation ecosystem: youth unemployment.
That some countries in the EU still have more than half their young people unemployed more than seven years after the credit crisis started in 2007, according to the Economic Research Council, is a salutary reminder that many regions face a lost generation of people without access to meaningful, paid work.
But, as Kroes said, many of them are doing their best to start something themselves. Her achievements in office in charge of the digital agenda – a role now requiring three men to do it, as she pithily put it in her speech - provide the platform for many of them to tap into the global marketplace and find their niche.
Kroes has given herself 18 months in her new role as special envoy to the Dutch government’s Startup Delta project to continue fighting for meaningful changes. She was looking at changes to tax laws to boost entrepreneurialism and venture investing as well as convene the four largest pension funds to find ways for them to commit to the sector again.
Her message in Eindhoven, Netherlands, was warmly received by the audience of nearly 300 government leaders, corporations, academics, entrepreneurs and venture capitalists about the global, boundary-less innovation ecosystem and the different techniques and strategies they were employing to play their part in the system.
As Kroes, using a term coined by investor Peter Thiel in his book, Zero to One, said: “The only way to make a difference, to go from zero to one, is doing it together.”
This echoed the Summit’s opening keynote speech by Eindhoven’s mayor, Rob van Gijzel, who called for “co-creation” and a “collaboration ecosystem” to be developed, one in which government and trust are necessary factors.
As the mayor noted, a region can very quicklyrise or fall in the innovation rankings but gov-ernments can convene and support this co-creation. Over the past 50 years since its independence, Singapore has been one region that has endeavoured to rise up the rankings more continuously.
In a keynote speech, Low Teck Seng, chief executive of the island’s National Research Foundation, said gross domestic product growth followed technology. He said: “It is known that success has to be taken care of properly. That is why research and development spending is so high and education so important to building clusters and an innovation and enterprise ecosystem. That and the rule of law.”
He set out the framework of enablers and strategy matrix to lead to value creation and capture through linking universities with capital – see PPT for slides 2 and 5.
But for governments to support the future jobs and wealth creation also requires understanding both their region’s current strengths and weaknesses and where the market will head that could create further opportunities.
Singapore’s expectation is the future of manufacturing will require the island to have local large corporations as well as foreign multi-nationals and startups. This is a scale-up challenge, it faces, and one in which corporate venturing could provide an important role in helping fast-growing companies maintain their growth rates, professor Low said after his speech.
The Summit’s opening panel after professor Low’s analysis looked at the creative industries of the future and how people’s skills and grit and special knowledge can help them in an entrepreneurial ecosystem.
Oriel Petry, head of UK Trade and Investment’s knowledge gateway, said entrepreneurialism was “trendy” currently as it offered freedom and a chance to create industries.
However, Jouni Hakala, director at Finnish Industry Investment, agreed and said society needed to keep its focus less on money than on engendering this entrepreneurial spirit.
Money remains a spur for these spirits, although government finance should avoid being so soft it “crowds out” private capital, he added.
In this line of thinking, Andrew Romans, Silicon Valley-based founder of Rubicon Venture Capital, in a panel session argued for tax breaks to be a primary way for governments to boost entrepreneurialism and investment.
There was less appeal for regulatory the ven-ture industry itself. As Marcos Battisti, managing director of Intel Capital in western Europe and Israel, noted in his speech on potential European reforms that could limit corporate venturing: “Who are they trying to protect?”
While Christian Claussen, partner at France-based VC firm Ventech, said if governments did decide to provide funding they could go down the route of a centralised or decentralised platform to commit to VCs and/or invest directly in startups. His preference was for decentralisation.
But whether or how governments can start supporting the innovation economy is one thing, learning when to stop is another.
Chris Wade, former director at the UK government’s venture capital unit and adviser to VC firms such as Oxford Capital, said, if a firm could raise $70m per year and there are more than 50 VC firms raising debut funds currently then is government support needed?
Arguably, less is needed now, given the success in VC funds, such as Holtzbrinck Ventures’latest, being three-times oversubscribed.
In those circumstances, governments could wait until the next downturn to then increase their activity in a contra-cyclical way and support the industry that has to look for technologies to be developed over decades.
But a glance at the regional and sector focus of the firms and funds indicates the nature of the challenge still remains steep if half of young people remain locked out of the economy.
The conversation will also continue at our next event, June 2-3 in London.
See more from this Government Report: Netherlands
Copyright Mawsonia Limited 2010. Please don't cut articles from www.globalgovernmentventuring.com or the PDF and redistribute by email or post to the web without written permission.
Latest magazinePast Issues
Get full online access, the monthly magazine, weekly news alerts, special reports and more.See all subscription options
November 28, 2017
November 22, 2017
November 21, 2017
November 22, 2017
November 30, 2017