I recently came across a great report by the Economist Intelligence Unit – Fostering innovation-led clusters: A review of leading global practices.
This report focuses on what government can do to drive innovation within their economy, and how best they can work with the private sector. Below are some of my takeaways from the report:
- Talent is the most important aspect of innovation – and government should focus on providing quality education
- Governments are successful when they promote a culture of innovation
- Specialized clusters work best, especially when they can compete
- Accelerate the natural entrepreneurship model
- Governments can realize success just by hosting networking events for corporate executives and government leaders – this is a low cost high reward initiative
One interesting focus of this report was “top-down or bottom-up”? Essentially the questions asked was are clusters better when they’re led by the government or led by the market? There are compelling arguments for both, from Silicon Valley (top-down) to Silicon Fen (bottom-up). Both areas feature world class universities, government funded research, and ample amounts of private financial capital. It seems to me that these clusters require much work between the public and private sectors.
As I prepare myself for a year in Sri Lanka, I have been researching their innovation community. There is not much on the web, as this nation is still at the early stages of economic development. Private companies, such as Microsoft are hosting innovation competitions. Microsoft’s Software for the 21st Century competition has invested $1.5mm over the past four years in Sri Lanka to raise their national standard of education. This is a long term strategic bet on Sri Lanka as a knowledge center.
While the Government, through the National Science Foundation and its Universities, are providing grants to encourage local innovation.
I’m quite excited to get on the ground and learn more about whats going on in this quickly developing economy.
Economic development should not just be seen as a way to increase monetary wealth. It is a tool to foster political and social stability. A recent paper by the Council on Foreign Relations argues this. I haven’t read the full paper yet, but there is a great synopsis from the author on HBR’s Blog. Creating these innovation clusters should not just be a matter of national economic policy for individual countries, but a matter of foreign policy for all developed nations.