Numerous companies have innovated their way to success by flourishing with the support of a hospitable startup ecosystem. Facebook was launched by Mark Zuckerberg along with four Harvard College students and roommates. Google was founded by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University.
Academia has this tremendous ability to bring bright and enthusiastic people together and put them in an environment where freedom of thinking necessary for disruptive innovation is present. Neither of the ventures mentioned above were intended to be what they have eventually become. Facebook began as a simple project to share photos among close friends. Google was funded to become a digital library, not a search engine. It’s the synergy between people and the environment that have enabled disruptive ideas to take shape and evolve.
There is no doubt that disruptive and incremental innovations can happen outside academia. However, for innovation to become a business from a mere idea, it needs an environment to flourish. This environment is the innovation ecosystem. One important part of the ecosystem is the academia. Unfortunately, academia is not sufficiently represented in the innovation ecosystem in Bangladesh yet, unlike many successful companies in the Silicon Valley that were born in universities. In Bangladesh, universities are mostly secluded from the commercial space and focus on knowledge dissemination, rather than idea generation in relation to the need of the business ecosystem.
Globally, a huge percentage of start-ups (80%+) don’t survive the first five years. Among those which survive for 10-15 years, only 5% or so are able to materialize scale, both in terms of depth and breadth. The numbers are significant because it conveys the message that forming a start-up and scaling it up to become a successful business is not easy. The situation is no different in Bangladesh. According to 2013 economic census (BBS), of 7.82 million enterprises in Bangladesh, only 0.16% are categorized as medium or large organizations. Over 98% remain micro and small.
There are a few stages a start-up goes through, starting from concept formation, and conducting a proof of concept (POC) to exploring investments to scale up, sometimes with the help of incubators, to ultimately becoming a profitable business entity. This latter stage is called the Valley of Death.
If the business survives the valley of death, business accelerators have a role to play until a business is scaled up and starts experiencing organic growth.
There are a number of dimensions that are not yet fully developed in innovation ecosystems in Bangladesh. First and foremost, there is a dearth of right skills – we need people who have global experiences in innovation ecosystems who can act as thought leaders and contextualize. Good news is we have a lot of people like that in our country. Bad news is that they are not actively involved in the ecosystem yet. One reason may be that the industry is not viewed to bear enough promise for those people to be interested in this sector. Globally, the innovation ecosystem survives because the success of one startup offsets the failure of nine other startups. In Bangladesh,even when startups find initial success, they find it difficult to achieve and maintain sustained growth to make a strong business case for venture firms. On the other hand, many people who currently work with the incubators or accelerators, seem to lack global experience. Furthermore, systemic problems like bureaucracy and access to finance continue to act as hurdles toward building a well-functioning innovation ecosystem.
Innovation is not a foreign concept in Bangladesh. Organizations like Grameen and BRAC provide great examples lasting decades. pi STRATEGY uses an innovation framework to unpack key dimensions of innovation: Creative Process, Distinctiveness and Impact. It seems that the ‘innovators’ in Bangladesh are focused on distinctiveness alone at most, with very little attention sadly on the creative process or scale-up dimensions to truly create impact. (The only exception in the last decade is bKash, which has created impact at scale.) For the innovation ecosystem to evolve into something truly meaningful, Bangladesh should perhaps pause, re-assess current efforts, articulate a common future vision, and then work hard to put in place the critical building blocks.
This article was written in 2018.
pi STRATEGY 