I have been working with a graduate student on a project that is looking into government programs to encourage angel investment that he is conducting for a national angel network group. He sent along an article published last fall in the Economist that said the following:
First of all, stop spreading money around trying to clone lots of Silicon Valleys....However, there is an even more important factor than money: culture. Nokia's success was not the result of far-sighted planning or subsidy by the government of Finland. One Nokia executive confides: "The biggest boost to our firm was the deregulation that followed the second world war and the government's avoidance of protectionism." One of the most innovative things Nokia did was to spot that the handset could also be a fashion accessory. And coming from such a small and open market, it was forced to think globally.
Secondly, governments keen to promote innovation need to look out for market distortions and over-regulation that can be stripped away. Entrepreneurs can face an uphill battle legally, and not just culturally, in many countries.
As the headline of this story reads, "The best thing that governments can do to encourage innovation is get out of the way."
This is one graduate student who has been paying attention to his professor!
(Thanks to Jeff Williams for passing this along).
Leave a comment