1. The great depression of 1929 to 1933: 2. The emergence of key technologies 3. The low-interest-rate 4. “Startup America,”
Yesterday’s Innovation Came from R&D Labs; Innovation Labs and Startups Will Drive Tomorrow’s Innovation and Economy Let’s face it: Today’s most significant digital innovation does not come from large corporations; it comes from startups. What has led to so many startups, and what is the relationship to today’s digital, multistakeholder, and bottom-up economy? According to Brad Feld in his book The Startup Community Way: Evolving an Entrepreneurial Ecosystem, four significant events shaped the new economy: 1. The great depression of 1929 to 1933: Employees felt insecure and not part of their company anymore due to the crisis. Young people started to think about how else they could contribute to society. Opportunities evaporated from New York City, and many moved to California (today’s Silicon Valley) to start businesses. 2. The emergence of key technologies: In the early 2000s, ubiquitous high-speed internet, smartphones, and cloud computing finally made starting a business from anywhere not only possible but also cheaper and more accessible. 3. The low-interest-rate strategy adopted by central banks worldwide: Persistently low interest rates pushed unprecedented amounts of financial capital into startups globally. Investors searched for riskier assets, such as venture capital, to generate higher returns. This continues today. 4. A broader set of actors pushed the entrepreneurial movement forward: President Obama announced “Startup America,” a national initiative designed to cultivate startup community development throughout the United States. Many other venture capital funds followed, which focused on early-stage investment, as did the growing number of corporate venture capital groups. With that, a range of support mechanisms, like accelerators, incubators, and other models, snowballed in size and scope.
Feld, Brad, and Ian Hathaway. The Startup Community Way: Evolving an Entrepreneurial Ecosystem. Hoboken, New Jersey: John Wiley & Sons, 2020.
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