Startup ecosystems and government involvment

I enjoy Brad Feld’s writing and believe the Boulder model has some great ideas that the Canberra region can adopt. See Brad’s book on startup communities. Most importantly Brad stresses the importance of Entrepreneurs as the leaders who create the eco-system, not government, service providers or VC’s.

In Canberra there is often discussion around the role of government in developing the startup ecosystem.

The 2012 startup Genome report lists the top eco-systems in the world. Silicon Valley and Tel Aviv are placed 1 and 2 respectively. Both have origins in government funded programs.

Silicon Valley’s origins were in government funded programs, specifically defence. For more reading look at Steve Blank’ slideshow. Another article again quoting Blank is from inc.

“At one point, says (Steve) Blank, the institutions of (Silicon) Valley were so totally in the pocket of the Department of Defense that Stanford became essentially a research lab for the CIA. A number of engineering Ph. D.  theses were actually classified. The largest employer at the time—and still the third largest for-profit employer in the valley is not Google, and certainly not Facebook. It’s Lockheed Martin.”

The second largest ecosystem on the planet is Tel Aviv, Israel which is also credited with heavy government involvment.

“According to Israeli venture capitalist Dr Orna Berry, there is no doubt smart policies played a key role in spurring innovation. “The Israeli government made a crucial strategic decision to jump start a science based sector by providing financial support for commercial R&D”

It seems government does have a role to play in laying the foundation for a strong startup ecosystem. However, entrepreneurial leadership needs to build on this foundation and drive innovation from there. Perhaps the key question is how can government programs provide enough support without dampening the emergence of entrepreneurial leadership.