Startup Ecosystems as Engines of New Growth and Employment

テクノロジーからビジネスへ―デジタル時代のスタートアップ・エコシステム

Victor Mulas, Head of Tokyo Development Learning Center, World Bank
IIZUKA Michiko, Professor, National Graduate Institute for Policy Studies

Philanthropy, CSR, Inclusive innovation

December 16, 2021

SciREX Center

SciREX-WP-2021-#05

https://scirex.grips.ac.jp/resources/2021/a25503fe50ecaa01ca9b516b513f491b9dab7775.pdf

SciREX Working Paper

Technology-driven transformation is not limited to technology-related sectors; it is also beginning to impact sectors directly related to the social structure, such as manufacturing, retail and wholesale, transportation, and construction. Accordingly, creativity and social skills are becoming more critical and valuable than ever before. It has become increasingly easier to establish tech startups as the technology available only to large corporations, research institutions, and governments becomes available to individuals. As a result, these tech startups are fast-growing, bringing new competition at both the local and global levels, new sources of competitiveness and employment, and cutting-edge innovations and new skills critical for the next generation of global companies. And with it, the disruption of traditional companies and industries.

These startups will require an ecosystem of components and supportive environments that enable them to combine knowledge, ideas, talent, and other resources to emerge and grow at a fast pace. An "urban tech startup ecosystem" will be built as cities reduce technological costs and consolidate knowledge. In 2015, the authors analyzed the differences between urban startup ecosystems and traditional innovation ecosystems. They identified four components necessary for successful innovation and technology-driven ecosystems: talents, economic assets, infrastructure, and enabling environment. In their new study, the authors found that a significant difference between urban tech startup ecosystems and previous models is a greater reliance on a new element: social capital. Social capital refers to the high degree of social connections that enable founders to interact with each other, with expertise, mentorship, tacit knowledge, market access, funding, and all the other elements necessary to create and rapidly grow a venture.

Thus, a vital function of an urban tech startup ecosystem is to create a strong startup community that includes social capital and meetups, accelerators, etc. The authors named this startup community as "networking assets." To determine what policy measures are needed to support a particular ecosystem, policy programs need to assess gaps and market failures. As a way to do this, the author categorized ecosystem maturity into three stages: (1) emergent stage, (2) developmental stage, and (3) mature stage. They also identified four factors as indicators to analyze the ecosystem: skills (experience of founders), support infrastructure (quantity and quality of support programs and resources), investment of funds (funds available and availability of funds in general), and community/social capital (networks of stakeholders who support each other). This information allows us to tailor policy measures to meet individual needs depending on the stage of the target ecosystem and the gaps identified.