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Creating successful innovation ecosystems – the rainforest analogy

We seem to hear more and more about innovation being the key to economic growth around the world.  And everyone is talking about how to create successful innovation systems. Not only do we have the IASP 2012 event next month in Tallinn, Estonia, celebrating science parks around the world (where The Next Silicon Valley is the strategic media partner), but following that is the Global Innovation Summit in July in California.

The opportunity from both emerging markets and innovation is indeed a key agenda on the minds of many governments with troubled low-growth home markets. While the BRIC countries continue to be a focus for European and American companies with flat or negative growth, governments are continually asking themselves, ‘How do we create the next Silicon Valley’. But this hasn’t just sprung up now – even when I joined the board of a regional development agency in the UK a few years ago, they were asking that same question then, and agencies keep asking that question now.

Our magazine, The Next Silicon Valley, was created over two years ago to both address the need for more awareness among this global innovation community of best practices, business models, technologies and key players, as well as create a channel and voice for the global innovation ecosystem.

Global innovation is on a growth curve again, if you look at the recent data published by the World Intellectual Property Organization (WIPO). It noted there were a record of 181,900 new patent applications filed in 2011 – a growth of 10.7% on 2010 and the fastest growth since 2005.

It’s interesting to see that Far East companies dominate the top five patent applicants globally, but the USA still has the largest number of applicants globally.  In the top five, ZTE Corporation of China had 2,826 published applications, followed by Panasonic Corporation of Japan (2,463), Huawei Technologies, Co. of China (1,831), Sharp Kabushiki Kaisha (1,755) of Japan and Robert Bosch Corporation (1,518) of Germany. Each of the top five applicants saw double-digit growth in published applications. Five Japanese companies – Panasonic, Sharp, Toyota, NEC, and Mitsubishi – feature in the top 15-list.

How to create successful innovation ecosystems

Innovation ecosystems around the world all want to emulate Silicon Valley in some way. But how do they do it? The focus should be on culture, say Victor W. Hwang and Greg Horowitt (pictured below) of T2 Venture Capital. Many innovation clusters focus primarily on the ingredients — the obvious assets, like venture capital, skilled workers and universities.  But what they have largely ignored is its recipe — the social interactions that turn those ingredients into vibrant companies. Learning the right lessons of Silicon Valley can empower entrepreneurs, as well as cities and regions, and take them to new heights of innovation and productivity.

Victor W HwangThis is the subject of their book, The Rainforest: The Secret to Building the Next Silicon Valley. This talks about the biology of innovation and the social and cultural fabric that is an essential part of the success of Silicon Valley, not just about putting all the ingredients in one place.  To quote from the book, “We argue that the pillars of innovation’s conventional wisdom – free markets and clusters – are unable to provide comprehensive answers to the mystery of systemic innovation. Where innovation is concerned, markets are largely inefficient”.

The biological science of innovation in this book is fascinating, again quoting from the book, “Innovation happens in an analogous way [referring to biological researcher Stanley Miller’s paper published in Science in 1953, about the thinking behind the creation of life]. Individual people are the atoms swimming in the complex biological system of human society. Innovation can be sparked to life by a particular combination of people who happen to have ideas, talent, and capital in the prebiotic soup of humanity. But those elements must be mixed in just the right way for them to find and connect with one another. When viewed from high above, humans are just particles moving around and bumping into each other. Rainforests – whether in Silicon Valley or elsewhere – are environments that encourage disconnected people to self-organize into greater forms of biological life.”

This is absolutely the point about creating successful innovation ecosystems like Silicon Valley – that you can have the right ingredients, but you need to have the right recipe to make the interactions work to create value.

The authors of this book are also behind the Global Innovation Summit – an invitation-only event with a gathering of hundreds of ‘thoughtful, iconoclastic doers’ from around the world who share a common interest in practical solutions for sustainable development through global innovation.  The event will focus on one of the biggest development challenges of our time: how do we create innovation ecosystems worldwide?

The partners for this summit include the World Bank, the OECD, the African Development Bank, the Inter-American Development Bank, and many other organizations.  Additionally, the event will feature leading companies, venture capital firms, academic institutions, NGOs, and startups from Africa, Asia, Latin America, and the OECD.

Our paper at IASP 2012: The Next Silicon Valley – Now a Global Quest

We will of course be at the IASP 2012 event in Tallinn next month and our editor Richard Wallace will be presenting a paper entitled, “The Next Silicon Valley – Now a Global Quest”, which takes an inside look at five emerging innovation metro areas around the world, and the interests, networks and connections that sustain them. He’ll take a look at New York (USA), Flanders (Belgium), Bangalore (India), Dresden (Germany), and Wellington (New Zealand). For more information on the conference, click here.

We look forward to meeting you in Tallinn and hearing about your cluster, ecosystem, innovation, or organization.

Nitin Dahad, CEO & Publisher, The Next Silicon Valley

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  1. Pingback: Learning from Silicon Valley « Opinion - May 27, 2012

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