“Boston is friendlier to startups than New York CIty, Boston people love startups and entrepreneurs”.
Interviewee: Phil Budden, a Senior Lecturer at MIT's Management School, in Sloan's TIES (Technological Innovation, Entrepreneurship and Strategic-management) Group, where he focuses on 'innovation-driven entrepreneurship' (IDE) and innovation ecosystems. Phil co-teaches in the l 'Regional Entrepreneurship Acceleration Program' (REAP), for regional teams from around the globe interested in accelerating 'innovation-driven entrepreneurship'. His background as a British diplomat makes him well-suited to the 'global innovation' of REAP, the interplay among the REAP teams, and the negotiations within the 'innovation ecosystems'.
1) What does your current work at MIT focus on, and why is this an interesting area for you?
Phil is fascinated by the “The MIT approach” MIND AND HAND!” which tries to answer questions such as “How do you put good academic research into practice?” A key framework that MIT teaches is the “innovation ecosystem stakeholder model”. Researchers at MIT also analyze why there are hotspots of innovation and what drives them.
The innovation ecosystem model focuses on 5 stakeholders: government, corporate, academia, risk capital, and the entrepreneurial community (Figure 1) – it aims to make people who care about innovation in a certain region ask themselves the following questions:
1) What do we have in our own ecosystem?
2) What are the strengths of our 5 stakeholders?
3) How are they interacting?
At the heart of the model is a 5 pointed star and it is all about the connections! For example, is the government supportive of the entrepreneur, does the entrepreneur have access to corporations i.e. via a business council? Are the universities and risk capital working together? This “innovation ecosystem” that MIT teaches is very useful for how European countries should think about their ecosystems and how they can improve them.
Figure 1: The 5 stakeholders and their connections in the MIT Innovation Ecosystem model.
When asked about his role at MIT, Phil states: “I support MIT by helping people to come together as teams. For this, I leverage my professional experience in the public and the private sectors to focus on the governments and corporates.”
What is the base of a successful innovation ecosystem?
There are 2 capacities that underpin an ecosystem:
1) Science and Innovation capacity – governed by basic spending on basic research.
2) Entrepreneurial capacity – How do we ensure that our students and entrepreneurs have the skills, not only to be entrepreneurs, but to be innovation-driven entrepreneurs?
In fact, it is the connection between innovation and entrepreneurship that ends up being so important.
It is great and necessary to spend money on basic research, but according to the MIT model, if a country does not also nourish its entrepreneurial capacity, it does not attract companies.
The most immediate thing you can do to encourage innovation-driven entrepreneurs is to make sure that students at university studying STEM are entrepreneurial with their ideas! So, universities need to train innovators. This is the true “Mind and Hand” approach. Most American entrepreneurs are trained in how to speak to US consumers and investors early in their career. It is a skill that can be taught, so European countries should be invested in teaching it to upcoming entrepreneurs and their startup hubs!
2) How can other countries learn from MIT’s entrepreneurial success?
Phil refers to one example, the Regional Entrepreneurship Acceleration program (REAP) (http://reap.mit.edu). REAP- now in 4th cohort -has had some Nordic experience (Figure 2):
The very 1st cohort had a team from Finland, the 3rd cohort had a team from Norway and in the 4th cohort, a team from Iceland is enrolled (see map –from http://reap.mit.edu/#our-team).
“MIT REAP admits up to 8 partner regions annually to participate in the two-year engagement. A typical REAP region has a population of 1-10 million people. Each partner region has a team comprised of 5-8 highly driven and influential regional members and is headed by a regional team champion. All 5 major stakeholder groups are represented in an MIT REAP team: government, corporate, academia, risk capital, and the entrepreneurial community.”
REAP helps to analyze the innovative ecosystem of the participating country through workshops over the course of 2 years. REAP gives “homework” to the teams, through which a team analyzes its innovative ecosystem and develops actionable solutions to improve it.
The next application deadline is in January, 2017.
Figure 2: Partners from previous REAP cohorts. Note the missing participation from Sweden!
3) Recommendations for the Swedish-American Chamber of Commerce in New England:
A business council in the greater Boston area is uniquely well placed to help that country’s businesses of various sizes to access this ecosystem! So it assists the businesses to get into this local ecosystem which is biased towards innovation generally, very strong in life sciences but also very good in robotics and artificial intelligence. An innovation ecosystem can be good at several different technologies. A business council should understand the ecosystem here and select the right businesses from Sweden to come and meet the right partners here in the Boston area. Thereby, complementing the work done by governments and corporates “to make good things happen”.
For SACC-NE the first thing is to speak to the Swedish entrepreneurs that are already in the ecosystem here, also to reach out to academic faculty and innovators here. Analyze in which areas they could have used assistance and start building a mentor pool who can guide and support entrepreneurs and businesses arriving from Sweden – slowly fostering a “SACC-NE ecosystem”. Understanding drivers of successful entrepreneurship comprises not only the analysis of Swedish entrepreneurs who stayed in Sweden, it is also necessary to remind ourselves about great Swedish entrepreneurs in the US. The next step is to foster connections between them. SACC-NE needs to play a connector type of role.
What should be avoided? “To spend too much money and get peoples’ hopes up – and fail!”
The advice is to enable startups to be fully immersed into the Cambridge ecosystem, to be surrounded by fellow entrepreneurs. Provide the local knowledge and insight to the Swedish entrepreneurs about where such hubs and hotspots are (for example the Cambridge Innovation Center (http://cic.us) and WeWork (https://www.wework.com/l/boston--MA) and facilitate their arrival in the ecosystem by setting up meetings and introductions. “Doing fewer things, but doing them really well” instead of spending much money! “Actually SACC-NE needs to be pretty entrepreneurial and innovative itself!”
“They used to say if you make it in New York you can make it anywhere”. But New York is so busy now that a lot of startups cannot make it. But they might make it if they start in Boston and then expand! “I think Boston is friendlier to startups in New York, here in Boston people love startups and entrepreneurs”.
Thank you very much for interviewing Susanna Bachle!