I do not believe in comparing different innovation hubs around the world and creating “most compelling” rankings. The reason is simple — it does not really matter whether Singapore, Tel Aviv or New York are better or worse than the other. What is important is that all of them are well developed and will provide the right tools for the startups regardless of the fact that they may be no. 1 or 23 worldwide. What matters is their maturity: all of them offer the opportunities for startups to grow and innovate.
At CREATORS, when we work with different innovation ecosystems, the important KPI that we expect of ourselves is How Quickly Does this Ecosystem Develop into Maturity. The basis for this way of measuring our work comes from the assumption that a mature innovation ecosystem can be developed everywhere (each hub is different though, thus comparing it to others may not always make sense) and that there is a set of activities in several categories that can be created in order to reach maturity. The quicker these activities are implemented, the quicker the process of maturing into a developed innovation ecosystem is.
Before we dive into the relevant parameters, let me remind you that CREATORS is based in Tel Aviv — the Startup City of the Startup Nation. It’s a mature and vibrant innovation ecosystem and we are lucky to be working in such an inspiring, fast-paced environment. Yet, whenever we host delegations from around the world that come to “learn about the Startup Nation”, they often conclude the visit with understanding that “Whatever you have built here, we have no possibility to copy-paste the same ideas into our geography and thus reach the Startup Nation status”.
They are right. Copy-pasting very specific innovation environment — no matter if Israeli or other — will most be a major flop elsewhere. But why would you do that anyway? You can actually tap into your own, very specific set of enablers and resources and build something different. The bottom line — let it become a mature innovation ecosystem as quickly as possible.
Three Dimensions of Innovation
When we first started thinking about how Innovation Ecosystems grow, we compared it to a corporate innovation maturity, which is very similar indeed:
The 3-Dimension Methodology that we created basically says that in the organization, innovation needs to be fostered on three different levels in parallel: (1) internally inside the company, (2) externally in collaborating with partners (e.g. startups, other companies, universities…) on high-value projects and (3) by becoming an active part of the innovation community.
Similarly, the development of the Innovation Ecosystem must happen on three levels:
1) Individual organizations that play an active role in this ecosystem strive to become more innovative
2) Different organizations in the innovation space collaborate together to support mutual growth
3) Communities are formed and fostered by a wide range of various stakeholders to achieve innovative capacity, knowledge sharing and ecosystem’s development.
With the understanding that innovation ecosystem is not a one-dimensional organism, we can get into the factors that make an ecosystem mature (or not). In a comprehensive research, we have created a pretty long list of factors that influence the maturity of the ecosystems. Out of all these multiple factors, we decided to focus on the top five critical relevant categories in order to build a simple yet actionable “Innovation Ecosystem Maturity Spectrum” (below):
A. Funding and R&D Expenditures (MONEY)
B. Human capital combined with the right mentality (PEOPLE)
C. Minimum bureaucracy and entrepreneur-friendly political and governmental environment (GOVERNMENT)
D. Cumulative Experience (KNOW-HOW)
E. Ecosystem Growth — Different Stakeholder Engagement (NETWORK)
Innovation Ecosystem Maturity Spectrum
Now based on the categories that influence the ecosystem’s maturity the most, we have created a holistic Ecosystem Maturity Spectrum that encompasses the crucial categories:
Looking at this spectrum, you can see that there is a clear path from the Beginner level to develop specific tools and activities that support growth and development step by step, in finally reaching the Expert level.
This process, although simple, is not easy — many policies and support mechanisms have to be put in place (especially at the beginning) to ensure that local entrepreneurs have enough opportunities to meet their full potential. At the same time, many things are actually happening simultaneously bottom-up and top-down.
What is very important to note is that money is not everything. Oftentimes, we speak with various ecosystem leaders that complain about insufficient access to investors and capital. As much as it is important to promote and develop financing mechanisms for fresh entrepreneurs, this is not the sole cure for ecosystem’s development. Especially in the age when creating technology and innovation has never been cheaper and more democratic.
To start working with this tool, start from analyzing your specific stage. Map all the things that you already do and list all the resources and strengths that your ecosystem has. For instance, maybe there is a strong traditional industry in your area that needs digital transformation and innovation? Or maybe it’s a tourist hub that may become the hub for travel technologies? Following the analysis, think about the most efficient and cheapest programs that may push the ecosystem into further development based on the criteria (people, money, government, know-how, network). Even if there are things you cannot change, such as government policies, you can influence others — e.g. network. Start from the low-hanging fruit.
The bottom line is to create an ecosystem that matures over time and gets more and more professional — for the benefit of all the stakeholders involved.