Activating Local Innovation Ecosystem (How to support start-ups)
The activation of a local innovation ecosystem can be hampered by a variety of barriers. Testing innovations in a real environment may be considered as a technological challenge. From a social perspective, it not always easy to get local organisations on board to support start-ups. Also from within the initiators own organization (e.g. the municipality, a university or research organization) one might have to deal with a lack of an entrepreneurial spirit.
Moreover, to acquire financing for local innovators and to develop sustainable business models are not evident. Globalization – though it brings many opportunities – has resulted in fiercer competition for start-ups. Smaller cities stimulating innovation, could be faced with start-ups moving from the smaller to a larger city, because it might bring them more opportunities. In regulatory and juridical regards, the lack of national/regional programmes for incubators as well as the integration of innovation into existing administration can be problematic.
The largest number of challenges, however, need to be faced by the governance responsibles.
Providing appropriate services to support local start-ups as well as their expansion could be challenging, for example due to a lack of office space. Start-ups should also be supported in such a way they can improve their product or service and their business model. In this framework, it is important to set-up a well-functioning interface between the city and start-ups. In some cities, there is lack of exchange between research institutes and businesses. This is one of reasons why they have difficulties to initiate start-ups from within the university.
Other cities have identified a gap in the evolution of the proof of concept to a prototype situation and roll-out to the market (they lack some sort of living lab concept in the city). Also some of the solutions available on the market still lack one or more important aspects in order to be marketable. Cities indicate they miss a marketplace that provides quality control on suppliers and predefined templates for certain processes.
And finally, cities also find it challenging to select and prioritize preferable solutions based on a predefined set of criteria.
Offering public space (e.g. real neighbourhoods) to start-ups where they can apply a trial-and-error practice to further develop their solutions. The introduction of city-led consultancy and the set-up of formats such as SCC1 at a national/city level are some policy recommendations. The fact that the local industry is usually highly interested in innovation and will therefore support start-ups is definitely something to take into account.
The following suggestions have already proven their worth: Persons in charge should create innovation clusters and oriented accelerators, and should bring together incubator, accelerator and venture building in a single location. Here, the facilitator (for example the city) should not run for a general type incubator, but should rather build and focus on its existing strengths and really avoid trying to copy others (e.g. an incubator in a neighboring city).
Moreover, a plan should be created for risk containment, evaluation and monitoring of success and actions to be taken in case of failure. It can also be beneficial to set-up a start-up centre at universities as well as to set-up an institutional network (such as Vienna Business Agency). One should also keep in mind to pick one theme and think about the individual specialization instead of getting lost in a multitude of ideas. People in charge should also provide guidance for start-ups to define the best next steps.
All in all, it is advisable to embrace a strong collaboration between local universities, companies, and the public administration. Concluding, some of the workshop participants suggested to replicate the iCity tender event as organised by Triangulum.
Plan for Implementation
As a first next step, some cities will set-up a city-led consultancy for start-ups (creating an entrepreneurial centre and offering space to start-ups where they can apply a trial-end-error approach to develop their solutions), as was done for Example in Munich.
Others will create an Innovation Lab within the university and connect the existing accelerator and venture builder to other organisations to make optimal use of synergies. Cities will also put more attention to finding models for upscaling and investing in start-ups centres. Smaller cities will also be looking for ways to keep young companies within the area instead of losing them to bigger cities.