Having recently visited a regional Chamber of Commerce event, which focused on providing support for entrepreneurs and business start-ups in the Alpine area, St Gallen Executive School’s Julio Prina made a series of observations in Vista, the School’s online magazine, that are pertinent to any business community hoping to ‘unplug’ innovation.
With change comes opportunity. The predictions of radical technological and social change in the decades ahead offer huge opportunities for businesses to innovate to meet new market and social demands. Furthermore, with digital technologies offering relative open access to markets, many opportunities will be open to new entrepreneurs and business start-ups.
The Alpine region – a region that compared to Silicon Valley is very conservative and wary of change – is debating how best to create an environment for business that is conducive to innovation and new enterprise. With the coming of machine learning, AI, and Industry 4.0 this is a debate around digital transformation that every ambitious region should be having.
Julio Prina points to six clichés, mentioned at the event, which we’ve all heard in relation to digital transformation:
- Fail cheap, fail fast.
- New types of jobs will make half the market of the future.
- Lead the change, don’t get led by it.
- Be excellent, not average.
- Co-working spaces and lack of hierarchy good. Old school style of working bad.
Interestingly these common ideas were challenged by some participants at the event, on the basis that what gets forgotten is who is paying for all that cheap failing, excellency search and co-working spaces. The value of innovation is undisputed as is the need for entrepreneurs to take some risks to achieve break-through results. The question discussed at this event, in seeking to create the best environment for start-up innovation, was who is to bear this risk? The private investors and start-ups? The government? And what are the main challenges?
The idea that failure is cool was questioned by Netcetera‘s CEO, Andrej Vckovski. Start-ups and their backers want to be successful and while some failure may be inevitable, rather than accepting ‘fast failure’ too readily perseverance is very important – achieving success can mean hitting walls, persevering, and not giving up. He also felt that giving start-ups access to markets by removing the barriers caused by tendering law, and access to cash flow as opposed to plain credit, would be the best way to support them.
Adrian Hasler, prime minister of Liechtenstein, agreed that it is important for politicians to recognize the need for flexibility and speed when dealing with these issues, as both the law as well as politics tend to be way too slow and fearful about innovation. And Nicolas Burer from Digital Swizerland commented that states tend to not want to support innovation so directly, instead focusing on education and other long-term strategies or by encouraging incubator projects and other credit-based solutions. Sybille Kammer-Keller from Zühlke agreed, saying that by seeing start-ups as plants in a greenhouse, incubated, one puts a wall around them, a transparent one but a wall none-the-less.
Andrej Vckovski also questioned the value of the new ways of collaborating, arguing that ready-made co-working spaces can hinder the entrepreneurial spirit - as “going on a Saturday to buy your tables for your new enterprise is part of being an entrepreneur, of having the groove necessary for success.” The mindset needed to be a successful entrepreneur will relish the small but exciting processes of setting up a business, and having this mindset can separate the entrepreneurs with the willpower to succeed from those that are just playing being business people.
Urs Weber, general secretary of the Chamber of Commerce, mentioned that if the risk of engaging start-ups could be calculated and insured, it would be easier for the free markets but also for governmental institutions to be open to trying to work with them. Julio Prina, saw this interesting idea of a start-up insurance fund as one of the highlights of the event, “A fascinating concept and one which is still quite green. I wonder if (re-) insurance companies would be looking at a potential market here?”