At the heart of any innovation economy is a vibrant start up ecosystem As shared in the first article in this series, which focused on Schumpeter’s concept of innovation economics, “advanced technologies produced through innovation form not only the cornerstones of national economic competitiveness, but also embody the social shift toward digital and entrepreneurial lifestyles.”i
INNOVATION By Greg Feldmann Executive Summary: Why is the presence of start-ups and the entrepreneurs and inventors who found them so important to our region’s economic competitiveness? And what’s a Supernode?
To contact Greg, the CEO of Verge, an alliance of the Roanoke-Blacksburg Technology Council (RBTC), the Regional Accelerator and Mentoring Program (RAMP), and Valleys Innovation Council (VIC), visit VergeVA.org or e-mail gfeldmann@skyline capitalstrategies.com
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Most new jobs are generated by firms less than five years old. Advanced industries tend to employ a more STEM educated workforce, typically paying higher wages. The Pew Research Center found that STEM educated workers earned between 32-38% more than non-STEM workers across a spectrum of educational attainment levels, starting with high school and going through PhD levels. That national average salary for a person with a four-year STEM degree was approximately $81,000, nearly double the median income in GO Virginia Region 2. Inventors from Gutenberg to Edison have transformed and shaped the world we now enjoy. Inventive entrepreneurs reside everywhere, including right here in Region 2 of Virginia, where we have generated between 100 and 120 patents annually in recent years. But they need support and encouragement from all sectors – government, education, corporations, entrepreneurial support programming like accelerators, mentors and investors – in order to flourish. What is the key to assuring this support exists in an organized, cohesive way? In their book The Startup Community Way, Brad Feld and Ian Hathaway argue that entrepreneurial leaders, which they name “supernodes,” are the single most important ingredients to determining the current state and long-term success of any startup community. University of North Carolina researchers used the term “dealmakers” to describe such entrepreneurial leaders as highly connected individuals with deep entrepreneurial experience (i.e., bringing a company to scale), fiduciary ties to startups and valuable social capital. They are willing, typically without personal gain involved, to use all of these attributes to connect people, build relationships, facilitate resources, and form the backbone of a startup community. Similar conclusions have come from a variety of other studies conducted by the Global Entrepreneurship Network, Endeavor, the World Bank and in the book authored by Victor Hwang and Greg Horowitt entitled, The Rainforest: The Secret to Building the Next Silicon Valley, in which they describe supernodes or dealmakers as the “keystone species” of the startup ecosystem. Keystone species
