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Building an Innovation Ecosystem


Good business ideas do not necessarily have to be based on one’s self-interest, but on what the masses want or need. Therefore, the constraints that come up provide focus and shape problems while depicting the exact challenges to overcome at the same time. Although complaints alone can stifle and kill creativity, it is imperative to realize that innovation does not necessarily mean perfection; it should be born from the interaction between vision and constraints. The initial step, therefore, is to be open to new ideas.

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In the case of Silicon Valley, the area’s development was accelerated as a result of the Stanford University’s growth venture (Shapira, 2005). Frederick Terman, an engineering professor, recruited new students and professors from the region and supported the different projects they were operating on in a bid to retain them at the university (Shapira, 2005). Varian Associates and Hewlett Packard were some of the projects that he supported from inception, and even encouraged them to set up offices inside the campus (Shapira, 2005).

Most of the new entrepreneurs overlook the importance of culture of innovation and entrepreneurial spirit. The surrounding environment should have enough self-confidence that enables the new business starters to take massive risks in their wake. The risk-taking culture of Silicon Valley is what allowed the young entrepreneurs to be hopeful and start their small ventures (Shapira, 2005). Additionally, for a technological venture to succeed, the surrounding economy must be quite diverse technologically, so that it supports the convergence of the Internet, hardware, and software products amply. Proper utilization of these three products is a substantial boost to the upcoming venture (Why research on Digital Ecosystems?).

Open source economy

Yochai Benkler wrote that, over the past few years, a new trend has come up in the software world whereby a few volunteers have been coming together to form alliances that beat even the strongest of MNCs (Benkler, 2007). These volunteers engage in a type of production referred to as “peer production” whereby the involved parties undertake self-assigned production practices. Since one undertakes the chore that a person is most familiar with, results are guaranteed. Everyone has a say in the production process, and they strive to coordinate with other parties, thus leading to satisfactory outcomes (Benkler, 2007).The products generated from peer production are usually free software.

In a fresh ecosystem, having an open source production creates a symbiosis of people who care about the innovation itself, as opposed to those who just follow orders to satisfy their bosses. Furthermore, the presence of the Community enables the innovators to assess the activities of the people, and thus decide what to provide them with (Benkler, 2007). This form of social interaction leads to highly decentralized social production. Therefore, the process is open to anyone to create, innovate, and share a new product, either alone or with others. Therefore, the entrepreneurs are able to find the right production people. The GNU/Linux operating system is a project that incorporated thousands of people in its development, which led to creation of quite a complex program (Benkler, 2007). However, managing the economics of such a project is quite complex since it is quite diverse.

Online Marketplace

Social relations and exchanges have gradually become extremely influential over the Internet. This is of particular significance in countries which face a myriad of issues in direct communication. In such regions, having an online platform facilitates collaboration and the ever expanding professional network. In some contexts, however, it is even more efficient to have these platforms since the quality of information generated demands the best person to be found in the quickest and cheapest possible way. In addition to that, the diverse community comprised of individuals and small businesses requires an online marketplace where they can trade millions of products and services daily.

Research and Development

Most of the people are more interested in working for other companies, as opposed to making something of their skills and talents. Reward and stability, therefore, take the place of risk and possible 50/50 chances. However, it is essential to understand that a starting-up company will not provide the same returns that Multi-National Companies (MNCs) get instantly. This is one of the reasons why fresh talents rush to look for jobs instead of investing in their own businesses.

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There is a serious need to form collaborations between MNCs and government agencies. Enabling MNCs to locate their research facilities within the home country can be such a prodigious advantage since it makes use of all the available local resources empowering the locals to be more innovative and creative in their ventures at the same time (Jackson, 1991). Moreover, for an innovation ecosystem to thrive, it must incorporate both material resources and human capital, which are tied together by the research and commercial economies. For an innovation ecosystem to develop, Government Research and Development processes must be applied to nurture the ecosystems in a bid to develop technology (Jackson, 1991). For instance, Varian Associates and Hewlett Packard got the attention of the Government, which started funding their projects, and this in turn gained Stanford University some revenue (Shapira, 2005).


For an innovation system to thrive, a few factors have to be put into consideration. For starters, the location of the new venture is quite significant. A business must ensure that its location supports its cause. As in the case of Hewlett Packard, the situation of its premises within Stanford University was an immense advantage. Secondly, funding of the venture is of equal importance (Shapira, 2005). For a business idea to materialize, it must have adequate funding so as to be able to thrive in a reasonable amount of time, or else it will die in the initial stages.

Thirdly, Government policies go a long way in ensuring that a new venture succeeds. Government policies can either hinder or promote entrepreneurial development. Age distribution is also quite relevant since the workforce in charge of the venture must be highly capable of producing the expected results. For instance, the projects in Stanford thrived because the workforce ranged from 25 to 44 years of age, which made it highly effective and mobile.

Language can also either make or break a new project. The language your workers use to communicate highly determines how well they perform since they have to understand each other well enough. Moreover, educational qualifications of your selected workforce should reflect the level of knowledge one expects to put into the venture. In addition to that, the support services in the area should be experienced enough to promote the development of the venture. For instance, marketing and finance services should promote the growth of the stake to venture the capital through advertisement and better access.

As stated earlier, constraints and challenges can discourage new entrepreneurs, but, coupled with vision, they can make a particularly strong business venture. The unpredictable economy can be quite discouraging. In the case of Silicon Valley, the overdependence on the economy was quite dangerous since its downturn could have led to extreme losses of the businesses therein (Benkler, 2007).

Secondly, high-tech innovation can be quite a challenge in that products in the market are constantly changing. Therefore, it may be quite hard to move with the rapidly changing demand (Benkler, 2007). As if that is not enough, technological development translates to skyrocketed housing prices, infrastructural deterioration, and declined standards of living. With this in mind, a new venture may fail to take off due to fear of the entrepreneur(s).

However, focusing on the constraints may blindside one from viewing the available opportunities. For a venture to grow and adapt easily with the changing times, it must focus on the possible development opportunities that it could use to its advantage. For instance, Silicon Valley set its sight on prospective business opportunities, such as the convergence of the Nanotechnologies, Biotechnologies, and Internet Technologies and thus developed new products based on that (Benkler, 2007). Therefore, the market was able to identify it with the emerging sectors, thus making it succeed even more. Showing strength in other areas different from what the market identifies with a venture gives one a stronger competitive advantage as compared to their competitors.

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Benkler, Y. (2007). The Wealth of Networks Peer production and sharing. Web.

Jackson, D. J. (1991). What is an Innovation Ecosystem? Science, 253(5015), 1-13. Web.

Shapira, D. P. (2005). Economic Development and Analysis. Web.

Why research on Digital Ecosystems?. Towards Innovation Ecosystems. Web.

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