Supporting Innovation and Start-Ups: Experts from the U.S., the Caucasus and Central Asia Meet in Boston
How to encourage new businesses—including as an avenue to boost overall employment and economic growth—is an on-going focus for the United States (U.S.) government as well as for those in the Caucasus and Central Asia. The Caspian Policy Center, working with the U.S. Chamber of Commerce and others, brought together practitioners from the United States and the Greater Caspian Region, including a large delegation from Azerbaijan, at the November 7-8 Caspian Innovation Summit in Boston. There, they discussed and analyzed experiences and insights on how to help foster new ideas and turn them into successful businesses.
The Head of International Business Strategy, from the Office of Boston Mayor Marty Walsh, Sarah Delude noted that the city of Boston, seemed to be in trouble in the 1970’s and early 80’s; its history is now a widely studied example for encouraging innovation. However, the city overcame those difficulties to become an attractive center of new businesses and growth—disproving those who said its best days might be behind it.
Different speakers noted that Boston, and its metropolitan area, boasts the highest concentration of life science activity in the world. Growth in the digital health, robotics, and tech sectors account for 12 percent of Massachusetts’s gross domestic product (GDP); the state’s GDP totaled about $527.4 billion in 2017. For the second consecutive year, the U.S. Chamber of Commerce has ranked Boston the #1 U.S. city for fostering entrepreneurial growth and innovation.
Certainly, Boston recognized and used the advantages that came from having a heavy concentration of universities, but it also discovered and utilized additional resources and methods. Boston’s sustained efforts continue to pay off.
Boston draws worldwide talent, bringing in people from over 150 countries who speak more than 60 languages work collaboratively. Some of the Summit’s keynote speakers pointed out that thirty percent of the start-ups in Boston in the region have foreign-born founders and about two-thirds of the workforce in Boston’s medical community is international. Building a sizable pool of talented people was repeatedly cited as a critical piece of the ecosystem needed to facilitate entrepreneurship and growth. There certainly have to be entrepreneurial visionaries, but there also needs to be talented, capable people they can hire to help realize those visions and to scale up business operations into sustainable, viable companies. Moreover, once firms reach a certain size—six to ten people—experience shows that the new company is more likely to stay put and not move elsewhere.
The range of practitioners repeatedly stressed that fostering collaboration, as well as individuals’ skills, is essential for developing the ecosystem for innovation. Speakers from the Cambridge Innovation Center and Mass Challenge noted the strong results they have had in the Boston area by providing workspace and offering mentorship and a community that recognizes and supports success. These are key tools for helping entrepreneurs handle the risks inherent in starting, and growing, a company. (MassChallenge reported its accelerator program for entrepreneurs has meant the creation of 1,500 jobs. MassChallenge is also expanding its accelerator programs internationally, for entrepreneurs.)
The Middle East Technical University, talking about its programs to support entrepreneurs in the region, stressed the importance of entrepreneurs and innovators being able to know each other. When this happens, they tend to look out for and to re-enforce one another. Also, recognizing and celebrating successes fosters innovation, and boosts economic growth and further prosperity. Government authorities can play a particularly important role in this regard. Experts also bluntly stated that corruption kills innovation and economic growth; it is therefore critical that governments address and eliminate corruption along with the conditions that exacerbate it.
Although there is a great deal of focus on entrepreneurs and start-ups, studies show medium-sized companies may be the engines that yield the greatest boosts in economic growth and employment. Moreover, innovation and entrepreneurship occur within established firms as well as in start-ups. Studies find both older and new companies are equally likely to be transformative in developing ideas and putting them on the market. Growth also tends to be sporadic and non-linear. Babson College’s Founding Executive Director Professor Daniel Isenberg told the summit that many of the greatest breakthroughs and new products at Apple were made twenty-five or more years after its founding.
The summit flagged other efforts and lessons from the Greater Caspian Region. Entities such as the Astana International Financial Center and Azerbaijan’s new High Tech Park are helping realize new ideas and establish and new businesses.
However, while much focus was paid to the organizational and physical aspects necessary to encourage innovation and entrepreneurship, speakers and participants strongly and repeatedly stressed the human angle. Developing critical and analytical thinking as well as the ability to work in teams and leverage networks is necessary and can be taught, noted Gaetan Kashal, Director of Global Partnerships at Fulbridge. Multiple speakers, including Caglar Iscioglu of the Young Guru Academy, a non-profit leadership school in Turkey, noted the importance of teaching/cultivating leadership. Mr. Iscioglu also flagged the value of fostering a sense of corporate social responsibility. This sense of responsibility for one’s community and overall society, he suggested, has a record of leading to ideas for new products, such as those for improving the mobility of the visually impaired.
All elements of a country’s population, women as well as men, need to see they can be innovative entrepreneurs. In creating the ecosystem that supports innovation and growth, it is critical then that women, as well as men, be recognized as successful entrepreneurs, especially as Chairwoman of the 100 Business Women of Azerbaijan Tatyana Mikayilova noted, given that in some countries women account only for 17 percent of the start-ups. What country can afford to ignore such an extremely low number of female entrepreneurs when creating the ecosystem that supports innovation and growth?