The report goes into some depth of the top 20 places and then deep dives into others in America, Europe, Africa and Asia-Pacific. In all 45 cities around the world are nurturing startup ecosystems that are worth reading up about.

The report is copyright to the Startup Genome but I am sure they will not object to me quoting them in their goals for this

“Every city has the right to participate in the global startup revolution and reap the benefits of job creation, innovation, and economic growth. As this report documents, however, too many places are currently excluded from this revolution”

The aim of the report is to provide data-driven insights for startup leaders, investors, and the other ecosystem stakeholders like city leaders to capture and access policies and practices so they can learn from this research on what does and does not work, to build these startup ecosystems.

This report is presenting an evidence-based policymaking engine to guide and accelerate theses startup ecosystem efforts. The authors JF Gauthier, Marc Penzel and Max Marmer are all founders of Startup Genome and have pulled together an impressive project team to provide this great, insightful report with a whole host of Ecosystem Partners around the globe- thanks from this reader.

This report captures 10,000 founders across more than 100 cities and 50 countries who contribute into the survey and specifically 300 organizations that support startups in these cities with 40 odd city members who contributed research funding, along with a growing list of partners, all with a vested interest to make this global ecosystem of startups thrive and prosper. These global partners include CrunchBase, Dealroom.co, Global Entrepreneurship Network, Orb Intelligence and Angle Resource Institute and a number of regional partners

The report establishes the criteria that drive the startup ecosystem in a ranking methodology of Performance (30%), Funding (25%), Market Reach (20%), Startup Experience (15%) and Talent (10%). They look at the ecosystem lifecycle model of 1) Activation, 2) Globalization, 3) Expansion and 4) Integration as a guiding model to determine the right actions and support at the right times for maximum impact and acceleration. This does begin to place an evaluation structure to compare and contrast.

The money and startup mecca called Silicon Valley

StartUp Genome has been building and improving this report journey since 2011 and progressively we all will get ‘weaned’ off the idea that successful startups can only happen in Silicon Valley as the must go and do pilgrimage all aspiring entrepreneurs and start-ups must visit. Silicon Valley happened due to a steady stream of investments since the end of the 2nd world war.

Today it is reportedly full of “unregulated free enterprises” but it has been progressively shaped through proactive policy and concerted private programs and massive infusions of venture capital funding and a highly entrepreneurial spirit of experiment and drive and it is all these lessons that require a deeper evaluation to measure success. Often others seem to want to just lift up (selected) parts instead of completing a more rigorous assessment of what works today, why, the circumstances (and serendipity involved),   what happened over time to get to this point but the lessons, once learnt can be applied everywhere, if this assessment is a good one.

Some of the really important takeaways for me:

• Early-stage startups are highly dependent on their surroundings
• Original ideas emerge from unexpected places in unanticipated ways
• There is a clear lifecycle to the development of startup ecosystems
• There needs to be a shared sense of urgency about developing vibrant startup ecosystems
• New and young businesses grow economies
• Entrepreneurial ecosystems are multi-dimensional in their performance in driving startup success, we should know what these are.
• The world gravitates to the ecosystem that has the best change (conditions) of global success
• Technology today is creating winners and losers and that gap is widening at a rapid pace
• Startups are a key vehicle by which a region and their citizens can take advantage of technological change
• The places that fail to boldly and immediately invest in startup ecosystems and thus fail to produce startups will experience economic stagnation over time
• The tech sector is growing at twice as fast as the global economy
• The trend of the old-line industrial corporations like Boeing, Ford, GE, John Deere, Schindler Lifts, Bosch are all turning large parts of their business int software-as-a-service (SaaS) the world of technology and software is dominating.
• The concentration of startup ecosystems is highly concentrated with 11 of the 55 ecosystems studied actually account for 78% of global Ecosystem Value with these 11 ecosystems found in seven countries.
• It is suggested it is taking 20 years for a vibrant entrepreneurial ecosystem to develop in a city or region
• In the next 15 years, global economic value from technological change will double so who will miss out are those that do not aggressively invest in startup ecosystems

The whole vibrancy surrounding startup ecosystems transfers itself in so many more economic ways for a region or city. It builds partnerships with larger, more established organizations within the region and allows for increasing exchange, it can infuse and inspire local universities with providing better choices for careers, learning new skills and forming partnerships that both can benefit from, defraying costs of being “stand alone”.

With a world becoming more mobile, ideas flow across boundaries, people are far more mobile than ever before and capital is attracted to ideas and people to help build these entrepreneurial ecosystems. Entrepreneurs should not be geographically constrained with vibrant ecosystems building in Asia, Africa, Europe, the Middle East and in the Americas.

The recognition that the industrial era is rapidly being replaced by the information era adds to this sense of a need to establish vibrant startup ecosystems for capturing the value creation.

I like where JF Gauthier, Founder, and CEO of Startup Genome talks fo the culture that builds from these startup ecosystems, he calls it “the revolution offered in the generosity and pay-it-forward mentality found in the startup culture”.

A growing problem for Switzerland

One note of concern for me there is no mention of Startup Ecosystems found in Switzerland. For a country claimed to be the leading innovation country, this is a glaring problem or has it some but not at any critical mass or just simply fragmented across the country.

This lack of recognition of the vibrancy that comes from a startup cluster must be a constraint. I come back to one observation “the places that fail to boldly and immediately invest in startup ecosystems and thus fail to produce startups will experience economic stagnation over time“.

Switzerland has been known for its poor support for startups and this seems to be borne out by a lack of a mention in this report. Something is wrong? Reliance on large corporation’s R&D being based here and filing patents is an older model that Switzerland needs to address, before it is facing a sudden crisis.

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The post The Global StartUp Ecosystem first appeared on Building Your Innovation & Ecosystem Intelligence.

Jeffrey Phillips and I are launching our fourth collaboration together, this time we are exploring innovation ecosystems and the growing impact they are having in the business world through their ‘conecting and collaborating difference’ that can lead to vastly different final customer experiences.

I just want to reaffirm what he has written on this, originally over on his site.

This is what he wrote:

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The post Innovation, ecosystems, platforms and the promise of more to come first appeared on Building Your Innovation & Ecosystem Intelligence.

Our whole understanding of innovation is changing; we are evaluating and changing our existing focus from closed (internal orientation) into open (external orientation) thinking for accelerating and improving our innovation performances.

Regretfully we are not yet fully equipped to manage within these new innovation ecosystems. We need to give the factors an increasing focus and lead into a better emerging theory of leading or good practice.

Measuring innovation in different ways is becoming important

To start we are today measuring innovation more on the following aspects or should be:

1. Linkages– content and productivity of relationships, alliances, collaborations, interactions, networks, clusters and all the complementary aspects and assets deployed to do this
2. Knowledge engagement– the ability to attract knowledge into the organization, through greater content and value, through the people involved and the way we access, anchor and diffuse this new knowledge.
3. Intangible assets– the increased focus on providing improved climates and cultures to allow innovation to thrive and the struggle (still) between short term and long term payback. Increasingly people and the combination of the intellectual capital will be the central focal point of innovation capability building.
4. Conditions for innovation– the ability to sense and respond to shifts in markets, competition, and evaluate changing and variable demand as well as assess the impact of changing policies, global impact points, recognizing changing patterns, the effect of non-linear dynamics, understanding adoption/ diffusion rates and skill relevance are far more recognized.

These help build greater outward orientation and awareness for more open collaborative innovation to take hold.

Our pressing need is to review the Theory of the Firm to address the effects of Ecosystems.

In simplified terms, the theory of the firm aims to answer these questions:

1. Existence – why do firms emerge and how and why do they thrive or die
2. Boundaries – why is the boundary between firms and the market
3. Organization – why are firms structured in such a specific way, for example as to hierarchy or decentralization? What is the interplay of formal and informal relationships?
4. Heterogeneity of firm actions/performances – what drives different actions and performances of firms?

Theory of the firm is an analysis of the behaviour of companies that examine inputs, production methods, output and prices and today these are dramatically changing.

Firms are required to operate in ecosystems, often multiple ones and this begins to alter our older theories that fitted more in the 20th century but not in this changed 21^st century of globalization where speed, scale and scope increasingly play a more important part.

We need a new theory on the Organising Network of Firms with Ecosystems.

We are forming in many different ways significantly more relationships that matter to each organization, so as to deliver innovative products and services that would not be able to be delivered by only having the one organization attempting it, unless they are prepared to undertake the growing costs of more complexity.

Often this involves designing the architecture, platforms, construct new standards and be equipped to integrate and adapt different members of a community, who have something relevant to contribute.

Managing this growing form of complexity is challenging old theories, boundaries, organizations and how they exist going forward.

Ecosystem innovation is more today about managing beyond the immediate known’s found within one organizations limited focus of the world. The organization that envisages a changing world needs to often organize around ecosystems to seek and influence the broader effects of where they presently compete to bring about some kind of more substantial advantage or respond to survive. (an example is the Android ecosystem vs. Nokia’s race to catch up).

The race is to gain advantage and often try to dominate and influence the future direction a market will take.

Opening up our thinking towards ecosystems has a powerful effect

As we begin to open up our thinking to ecosystems these are having a powerful effect on our perspectives as different partners contribute to this often ‘emergent’ thinking.

This becomes more evolutionary and requires a completely different way to manage these ‘relationship contract’s that are forming around a given concept or platform.

They require increased interactions within the community and need far more tightly controlled activities to gain the synergies and effects from working within an ecosystem.

Relationship management needs to keep focusing on enhancing, driving innovation and knowing how to adapt this within the whole concept. No easy task.

Ecosystems that produce ultimately new business models often rest on a large capacity for agility within the participating organizations. Internal capabilities and competencies often get highly stretched by the new dynamics taking place, you need a strong orchestrator of the ecosystem to manage these challenges and many cultural biases that can blind a ‘line of sight’.

Aligning partners on a platform needs-basis is very different from aligning them to just one organizations needs. In the past we adapted to meet that specific requirement  of that one dominant organization as they controlled the process.

Today you can argue differently, why what you see as needed is not the best and maybe clearly different that first envisaged and it is better and evolutionary but demands more change and disruption both internally to manage it as well as how it is delivered to the end beneficary.

It allows for more breakthrough innovation, greater challenging of the existing status quo and often taking organizations out of their existing comfort zones.

Of critical importance is nurturing the health of the ecosystem.

There are three fundamental aspects that need to be considered

1. The value to each within the ecosystem. These values may be different but it is the recognition that the platform provided is the best possible way to deliver their individual part of the solution.
2. Critical mass of the parties within the ecosystem gives it that certain robustness. The combined effects in the ecosystem are greater than the efforts and sum of individual effect.
3. The successful ability to seek continuous performance and improvement by the way each learns. This equally achieves improved benefits and collaboration effects, so as to give the continuous upward push towards delivering a new innovation concept. This co-evolution or joint learning can lead to optimization effects, increased relevance and generating synergies unlikely without some creative friction along the way.

Ecosystems are evolutionary and do have ‘normal’ life cycles

For the health of the innovating ecosystem, you need to go through four stages

1. Birth– the buying into the initial concept, the pioneering and focus on the critical acquisition of key partners, market understanding iterations and the founding principles and roles each party is required to play and contribute
2. Expansion– as the ecosystem knowledge and activities expand you will need to have scale and scope built into the system. Standards need to be actively worked out , platforms established and robust, dedicated resources enabling and coordinating activity
3. Leading & Evolving– This could be possibly the ‘red queen effect’ that drive the evolution but you do need clear roles, that include network orchestrators and more than likely one dominant partner who manages the ecosystem. This party needs to ensure bargaining techniques, resolution management and an amazing set of skills not to throw something out that might have hidden value. One party needs to ‘mind the (open) commons and manage the IP across the ecosystem not to allow it to stop the collaboration. This type of leadership is going to be a rare, valued set of skill sets.
4. Self-renewal – it is the ability to deliver on the ideas otherwise the value of contributing to the ecosystem has no value. The ability to understand the potential for delivery is critical in any assessment as non-renewable ecosystems will not lead to ongoing evolution and may have very specific or limited advantage. Where ecosystems seem to work is where the goal usually has to be for a BHAG (big, hairy, audacious goal) that delivers clear differentiation and increases revenues multiple fold.

You must match your organization’s ability and access the fit within any innovation ecosystem.

Operating within an innovation ecosystem requires considerable evaluation. Does the synthesis of your new offering by working within the ecosystem federation combined with other organizations create a coherent customer solution that is more than likely going to disrupt the existing market?

Can you afford to participate or go it alone? Collaborations that have increased levels of complexity have often higher risk by managing within ecosystems.

You have to really assess that all the partners can deliver their parts and usually this is a complete unknown so you have to work through a set of tough strategic questions to get closer to the knowns.

These would include but not limited to:

1. How does your offering measure up as critical/ attractive within a ecosystem federation that will add value.
2. Knowing where you fit within the value chain. Do you have dependencies on others, can each satisfy their commitments on time, what resolutions/ warning system needs to be in place and getting a clear understanding of risk of failure by others within the ecosystem.
3. The higher the evolution for the final customer, the higher the delay in adoption as a risk so you have to be clear on the ‘returns’ and estimated timing to manage your expectations.
4. The more partners within the ecosystem the more complexity and risk. The dominant party needs to provide some compelling arguments on vision, potential effects and understanding of the changes caused in competitive dynamics by joining.
5. Answer the basis questions of when, why, how, where can we compete within any federation of parties. You need to pace your resources to match the process (see below)
6. Maybe you can reduce your involvement (and risk exposure) by becoming a sub-eco-system provider to support others within the platform.

Just remember this as a summing up.

In ecosystems, this remains a key insight “The dynamics of the system will be dominated by the slow components, with the rapid components simply following along.” “Slow constrains quick, slow controls quick”. 

To manage ecosystems is hard, it is an adaptive system.

Think carefully through any move to join innovation ecosystems, they do have potentially a high, immensely attractive return, if managed well, they are nearly always disruptive to the existing markets and highly valuable to the participants.

There also is a big ‘but’ as the pathway to get to that ‘success point’ is full of potential risk and immense ‘spent’ energy.

Think this carefully through. Hence we need far more theory and informative discussions on innovation within ecosystem federations to help us all form around (or not) new structures for innovation.

The post The forming of new structures- the business innovation ecosystem first appeared on Building Your Innovation & Ecosystem Intelligence.

Braden is the author of “Stoking Your Innovation Bonfire” from John Wiley & Sons and is also the editor of Blogging Innovation (http://bit.ly/d2c9aW ).
Braden picked up on an article lamenting the seemingly poor state of Canada’s innovation efforts (http://bit.ly/fdLeI5 ) with the view that “Innovation is literally hitting a wall”.

Braden has also commented about the recent US approach to resolving their innovation approach and believes it is limited in its understanding and appreciation of innovation.

Here in Europe we are certainly going through the same crisis of confidence with innovation, it is not producing the wealth and growth expected and needed to fuel our economies.

The EU commissioner for innovation, Máire Geoghegan- Quinn, the EU’s first innovation commissioner, has started to created a lot of positive energy around some exciting new initiatives but are they enough? My answer is simply no.

For a very thoughtful article on the EU and innovation (http://bit.ly/hCZWdO ) published in www.innovationmanagement.se by Ann Mettler, Executive Director of think tank The Lisbon Council and here she gives her take on policy and innovation.
Ann Mettler comments “One needs to distinguish between policy levers and policy drivers such as competition. It is about levers versus drivers. One key here is to look at the money and how the EU chooses to spend. Current spending priorities are the antithesis of innovation. If we continue to spend the largest proportion of the budget on the common agricultural policy we cannot with a straight face claim to prioritise innovation”.

Braden states the same within the article he was picking up upon, written  by University of British Columbia economics professor James Brander. (http://bit.ly/fdLeI5) that explores this sobering possibility of “hitting a brick wall” in a new study published in the Canadian Journal of Economics.

Branden concludes that the pace of innovation is slowing dramatically in four key areas: agriculture, energy, transportation and health care. The consequences could have a profound impact on our lives if these are slowing down. Others will pick up any slack.

For me reading about Europe and its innovation policies it does seem Europe faces an “innovation emergency” because its businesses are falling behind its US and Japanese and now China as rivals in terms of investment and new patents, graduates and investment start ups. We are facing many challenges that seemingly the Commission cannot get the necessary momentum behind to reverse some frightening trends and quess what, the developing world is rapidly catching up.

A good understanding of the policies emerging from the approaches to be taken for EU innovation can be read here (http://bit.ly/gFZ6EF ) in a series of interviews written by Haydn Shaughnessy.

So I do agree, we are actually in crisis. I also agree we really do need a new era of innovation as the old one has clearly not worked. It has to be bolder, more radical and more reflective of what innovation is providing for us.

The realization is innovation cannot be contained within borders, it needs to be encouraged wherever it goes, and the Governments need to work on ensuring they keep a stake in it. Presently this is not as good a stake as we need for the level of growth, jobs and economic prosperity.

Innovation policymakers need a better understanding of innovations parts.

• Any innovation policy is a formidable task, innovation by its nature and understanding is very broad. How can policy guide and stimulate innovation differently?
• Braden is right in his article, the heavy emphasis on applied science and investments in research and technology as the keys to innovation is not the complete answer but it is part of it, of course.
• Increasingly within the EU there is a growing realisation that all this research effort that is being heavily supported through grants and funding is falling very short in the commercialisation of inventions. There is a shift to measuring impact on society, in the delivery of benefits and that is important.
• There is an increased realization on bringing new services and products to market and this comes through the SME. This is where it becomes harder to administer and develop levers for the SME to thrive. Often the argument for Governments is to simply get out of the way and let the market manage this. In the EU, the dispersion of grants or funds will still have bureaucratic strings attached to it, so this is unlikely to happen.

The new recent US & EU initiatives on innovation
With the announcement of new initiatives on both sides of the pond I still get the distinct impression the policymakers are simply re-arranging the deck chairs on the Titanic- to do something that will soon be overtaken by events, or that contributes nothing better to the existing solutions to our current problems and that is a worry.

We do need something more radical. Policy needs to be bolder. We simply don’t need just another Sputnik moment, a realization others are beating us, we need to put that man on the moon to make sure we mobilize society around innovation.

The real challenges needed to be faced.

• The first big challenge to innovation is really a management challenge, not a research challenge, and it is not clear how the latest policies will succeed on this front. We do need to recognize managing innovation is rapidly changing the way we need to work. Is this being fully accounted for within new policies or pushed more? Remaking management to innovate is essential to deliver through.
• Innovation has fragmented; today’s ‘innovation’ means what? We do need to understand the different ‘types’ of innovation needed to perform the specific task. I am not sure the policymakers understand the really important differences between open innovation, needs-based innovation, service-dominant innovation or where Business model innovation fits for support or development to name a few. This needs to change by rethinking innovation. Break it down more. It is not an internal event; it is an external collaborative event beyond a few PhD scientists to deliver innovation. Innovation needs to engage society more, not at the end but throughout the whole innovation development process.
• There is a greater emphasis on innovation partnerships as innovation comes about at the intersection of different disciplines and relationships, so this is very positive. Bringing a diversity of people and what they can contribute together is positive. I’m not sure yet if this will be understood enough this includes the final consumer with this.
• 70% or more of GDP comes from services. Many service areas don’t depend on research; they rely on ‘gut feeling’ instinct and quickly spotting ‘breaking’ opportunities, they utilise and combine knowledge more than product alone. Speed to market or first mover advantage can be much more important and how do you account for this in policy? We need to find better ways; we need to push more of the levers that help in this. We need to develop more knowledge platforms that combine knowledge to make better intelligent products.
• I do share this opinion expressed by Ann that there is still just too close a relationship and political patronage of certain sectors that are leading to a kind of inbred relationship between government and companies, leading to lagging performance in terms of international competitiveness and protective positions that are not actually creating new jobs,  they are simply sending jobs away.
• US economist Tyler Cowen argues, there are huge economic implications if innovation stagnates. This is what lies behind what he calls The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. What underpinned the great postwar boom was the industrialisation of inventions made between 1910 and 1940. The goods that poured out of the west’s factories between 1950 and 1975 provided employment and rising real wages for the mass of the US’s and Europe’s citizens. But the “low-hanging fruit” that delivered such benefits is disappearing, he argues.

So are we actually stagnating? So perhaps the era of current innovation activity is over. We are clear of the importance of innovation as a driver of growth and the imperative to exploit it. Perhaps if Innovation was left to look after itself a little more, it could really flourish and provide real breakthroughs that did alter our lives as in the 20^th century very radically, that seemed unfettered far more.

I very much liked Ann Metters’s final comment in her article. “The biggest problem, however, is that we don’t appear to respect the process of innovation itself in the EU. Innovation is not unidirectional. It does not lead to success nine times out of ten. It is by nature experimental, disruptive and unpredictable. We have no formula for it. We can’t control it top down.

And that’s hard to accept, particularly if a lot of money and institutional reputations are at stake. So we create our formulas around R&D, shy away from risk and expect success. But it really doesn’t work that way”

So for me, the battle of ecosystems becomes the necessary innovation platform.
Great advances do exist and many are still out there hanging on the tree. We do need to get past the low hanging fruit but to do this we do need our institutions to step back and provide a new ‘enabling’ infrastructure, we need to build the scaffolding to pick this new economic fruit.

Government need to stick more to their basic knitting, focusing upon developing the conditions for building the ecosystem in which innovation, experimentation and investment can really flourish. We need supportive innovative management or investment ecology not micro-management through administrating funds.

If we want to step up the pace of invention, there has to be a huge shift in the way we think and who does what. We are all presently trying to do each other jobs, often we are falling over each other, we duplicate effort, dilute innovation competition by accepting incremental innovation as the end result.

We can’t continue that way, we all need to be bolder, to realize we are in crisis and where bolder innovation (and invention) can provide solutions.

The government needs to design markets and build institutions that promote innovation and let the markets build their individual ecosystem on which innovation, experimentation and investment come together on platforms that provide broad benefit to all that participate.

Let the market fund these, let Government encourage the enabling platforms, the brokerage to bring these together and ensure it anchors part of that for its society.

Are ecosystems and platforms the global answer to innovation acceleration? I think the more the Governments promote innovation platforms, and provide the levers, infrastructures and technical backbone to allow this to happen, the better.

I think we can see rapid acceleration of ecosystems and then innovation by encouraging these platforms and new business models that can dramatically transform many industries.

Scale and scope will be seen differently, these are global, not country-specific. Individual Governments need to help to build the global cake and ensure they get a slice of it.

It will often be messy, unclear and not as well defined as policymakers would like but that is the nature of innovation.

Focusing more on building different ecosystems becomes mainstream for innovation delivery and we usher in a new era of global innovation. We need to move beyond today’s innovation thinking so a new era of global innovation can emerge.

The post The beginning of a new era for innovation, truly global. first appeared on Building Your Innovation & Ecosystem Intelligence.