Editorial: Translating innovation potential

The world as a testing ground will translate this innovation potential into commercial opportunities.

It really was a pleasure to be at the High Tech Campus Eindhoven, at the epicentre of the Brainport region, last month for our inaugural Global Government Venturing Summit to learn from the insights of all the speakers and delegates.

While the dignitaries shared their thought leadership over the two days, highlights in the review, page 13, I wanted to use this editorial to also recognize the invaluable contribution and organizational support from our partners behind this Global Government Venturing Summit 2015, including the teams at Tilburg University running the Tesla project for the European Commission, the Brainport promotion agency, StartupbootcampXL, High-Tech Campus Eindhoven and Eindhoven municipality and sponsors, such as Qbix Analytics and Relevant EquityWorks.

Their hard work and commitment really seemed to sum up all that is best about the Netherlands.

But while hard work and smart people are probably a necessary condition for success one of the most important is having the optimism to try and use existing wealth to invest in ways that will create more.

Scott Anthony, managing partner of the innovation and growth consulting firm Innosight, in a blog about Singapore’s entrepreneurial hub identifies research that found the number one factor predicting whether someone will become an entrepreneur was whether the person has received an inheritance or a gift.

Put another way by academic Thomas Piketty’s examination of why rates of return might be higher than growth rates in the 21st century, which include rising international tax competition, a growth slowdown, and differential access by the wealthy to higher returns on capital.

The last point is important. While co-creation and collaboration are necessary, there is a truism that the majority of returns often flow to the wealthy, whether university endowments, sovereign wealth funds or rich individuals, as they are the ones prepared to invest more and for the longer-term.

Innovation does not equal returns without investment and development. Governments have a responsibility to understand the risks of the innovation, open the tools to all parts of their societies but also make sure they can have a seat at the global table through being prepared to invest on their citizens’ behalf.

And in a world seemingly awash with liquidity through quantitative easing in the major economies, governments would seem to control the spigots and increasingly directing the flow to the startups and scale-up opportunities created by entrepreneurs as well as the market-making research done at universities and public laboratories.

US Congress has finally been making positive noises about providing at least $1bn to help commercialise research through startups coming from university and other accelerators.

This might be a drop of the $135bn US federal research budget but it could be a significant sum to the startups looking for just such a benefactor.
It would also complement the $1.5bn SSBCI programme started in 2011 to allow US states to allocate money to entrepreneurs, let alone the regulatory changes to ease private investing or boost exit rates through flotations on stock exchanges, known as the Jobs Act.

One legacy of US president Barack Obama, Rob van Gijzel, mayor of Eindhoven, and their peers around the world will be how well equipped they’ll leave their citizens to find work and the finance to support their entrepreneurial endeavours.

As van Gijzel describes about Eindhoven in our summit report: “Knowledge and ambition are here; Brainport is the most innovative region.”

The challenging act for these leaders and government venturers, therefore, is to find the right mix of support and initiatives without overwhelming the good with the mediocre and soft public cash driving out private capital. This can only really be tested through opening a region’s startups and businesses to the global market for talent and capital.

The world as a testing ground will translate this innovation potential into commercial opportunities.

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