How Russia, Tanzania, Indonesia and the US analyze their own startup ecosystems

Answering the question “what is the 2nd best innovation ecosystem in the world” is both a provocation and a eye-opening. No one seems to be able to think out of what the Silicon Valley has built over the last 50-60 years (see this cool timeline from NPR). And the second “rank”, if it still makes sense to compare ecosystems (which should rather connect, as we wrote in a previous article) is only a good way to start a never-ending debate.

The Global Entrepreneurship Summit offers the best possible platform to gather thoughts on ecosystem building and management. It is a political summit, where government agencies meet community leaders and builders, and it is an event with more than 100 countries represented. You can read the wrap-up of the opening keynotes by John Kerry and Malaysia PM Najib Razak. The panel we attended on emerging markets was a key opportunity to hear on the same stage ecosystem players from Russia, Tanzania, Indonesia and the United States.

 

Russian speaker Peter Tatischev assessed a similar issue at home and in Asia, where “there is no global vision“. The modern world is not bound by any borders, we can and must address the global market, but few actually do it. A successful innovation ecosystem must help startupers to go global. The risk not doing this is to find only copycats, locally (such as the countless cab sharing or ticketing apps), with little reach. Without a vision, he adds, “people start a business for the lifestyle, not to solve real problems, local problems”, which is something that echoes in any city too much focused on copying the Silicon Valley, forgetting the local culture and why in the first hour, people start businesses.

Indonesia, says Salahuddin Sandiago, is not exactly Silicon Valley, as “our culture is not fostering entrepreneurship“, the government used to be very much in control of the economy, but now, and 0.18% of Indonesian people only are entrepreneurs. The mindset of Indonesian will link success to other parts of the economy. The family of Salahuddin, now an established player of the tech and VC scene in Indonesia, is always the same: “now that you are a successful entrepreneur, when are you going back to school and get a PhD”. With 19 million more middle-class consumers in the next 15 years in Indonesia, any new product is bound to be a success, this is a huge field of opportunities. Still, there are issues: it may take up to 6 months to create a company in Indonesia, and a few hours to have it closed down.

Adam Stelle, from UP Global, the umbrella brand behind Startup Weekend and Startup Digest, tries to “ignite the initial spark” with hackathons taking place worldwide, because this is how you can start to gather a community of entrepreneurs, VCs, mentors, tech brands, bottom-up. And an ecosystem is not only about startups, he adds, “In the Middle-East, the startup ecosystem rose in the same time that political activity, probably not coincidentally”. This is the vision that Obama’s Global Entrepreneurship Summit embodies, to create links between the youth of Muslim and Western world through entrepreneurship. At Kuala Lumpur, a new partnership between the US administration and UP Global was also announced, to support 500 000 entrepreneurs in 1 000 cities with a connection to mentors and investors.

David Rose, a super-angel, gave insights from New York. “NY is the capital city for finance, for advertising, and many other industries. An ecosystem is anchored locally, and must take advantage of the existing entrepreneurial base“. This clearly is a good approach, as it will help innovation ecosystems across the world to differentiate, be complementary (rather than competing, which makes little sense). Internet makes possible to connect established industries in a new startup mode. “Silicon Valley is an unusual creature, and you don’t have to be Silicon Valley“ he adds. “Find people fit for entrepreneurship, find your local identity and key strength, and then you can start to push an ecosystem”. Nairobi in Kenya, for instance, is seen by many as both the most advanced African hub and a global top player for mobile payment technologies and service.

 

George Mulamula, CEO of Tanzania ICT incubator (DTBi), confirms the necessity for an ecosystem both locally inserted, and globally recognized. The DTBi entrepreneurs program he manages for the government of Tanzania has a “copycat syndrome” like anywhere else, but people are also keen to work on rural issues which are key for the countries. Stating this fact makes even more sense in Asia, where as some say, the great divide is between an urban elite (they have smartphones, they know about apps), and the countryside, where feature phones are still used a lot, and with an other set of issues to tackle (you can read this report from Gwendolyn Tan, a key observer of the Singapore and ASEAN tech scene).

Again, the topic of innovation ecosystems invites a few conclusions:

• Don’t benchmark against the Silicon Valley, think locally, find your differentiation on your history and economic strengths. Yangoon is not San Francisco. Moscow is not Sao Paulo. Both a strong local identity and a local community are key to avoid the copycat syndrome and make innovation impactful.
• Play global from day one: you cannot keep being a “big fish in a little sea”, as Chris Anderson shared with us on the closing networking night. Other countries can face similar issues and your project can answer this, it will be a great way to make a local startup known overseas.
• Don’t expect everything from a government, a “necessary evil” which has difficulties to know where to stop its action. A government should enable an ecosystem, not manage it. In Russia and Indonesia, changing rules were said to be an obstacle for startups who have to adapt every time to a new set of laws.

A shared interest by the panel was to detect best practices from other ecosystems to try to adapt them, which is what our project is about, traveling 10 innovation ecosystems until June 2014 to share during the key events trends, contacts, contents and tools for ecosystem enablers and managers. We’ll keep you updated on this.

Martin Pasquier for Agence Tesla, Knowtex and Innovation Factory

Check out our report on Malaysia innovation ecosystem on Slideshare too