Is government the essential ingredient for success in Silicon Valley and for startups elsewhere?

No, says Vivek Wadhwa, a former entrepreneuer in the Triangle who now is an academic research and teacher at Duke University and several other institutions.

“Diversity, cultural networks power innovation,” Wadhwa writes in the Washington Post where he is a technology columnist.

“I have friends in Washington D.C. who, to this day, believe that government has a role to play in Silicon Valley-style innovation. They are mistaken, as are countries, such as Japan, that have invested billions of dollars on science parks and top-down clusters. To stimulate innovation, they have to first understand what really makes the Valley tick,” he says.

Wadhwa cites two studies covering startups by Indian immigrants, including one he led at Duke in 2006, that shows they started seven percent of Valley startups between 1980-1988 and 15.5 percent between 1995-2006.

“This is astonishing considering that, according to the 2000 census, fewer than six percent of the Silicon Valley workforce were Indian born.”
The key to success?

“They did so by mastering the Valley’s rules of engagement,” Wadhwa says. “They formed mentoring networks and started helping each other.”

He cited The Indus Entrepreneurs, which has a strong chapter in the Triangle, as a group that has helped immigrants launch and build companies.

Wadhwa also cited researcher Richard Florida’s work that found success in 50 metro areas is fueled by diversity.

Wadhwa’s conclusion:

“This means that the key to boosting entrepreneurship and innovation is to encourage diversity, mentor entrepreneurs and facilitate their networking,.” He says. “Science parks and industry subsidies can’t do this. This holds important lessons too for groups that are left out of tech entrepreneurship—such as women, African Americans, and Hispanics. They need to continue to form new networks and strengthen existing ones in order to uplift each other and address concerns unique to their communities. Government can’t make that happen either.”

Read Wadhwa’s column and find links to related research here.

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