I recently read a great little article on the BBC website about Silicon Valley Startups and the basic ingredients required to set them up. The article, commissioned by the University of Cambridge and Royal Academy of Engineering looked to understand why Silicon Valley has such a great number of successful IT startup companies. If you don’t know, Silicon Valley is home to such huge behemoths as Google, Cisco, eBay, Intel, Apple and a host of other internet and technology based companies.
The article highlights 3 key elements required to make a successful startup: ideas, people and money. Silicon Valley has a well engineered process in place whereby all 3 elements come together and also feed of each other. Highly-qualified people with an instinct to do better and with an attitude of thinking outside the box generate ideas. This in turn drives the engine of business, creating new services and products or inventing new solutions to current problems. Everything is oiled with money, allowing the companies to start up in the first place, allowing them to expand and grow if required, and also to bring in more people and ideas.
The underlying aim of the article is to somehow extract the vital aspects of Silicon Valley culture and mentality and export it to the UK for instance. Is it as easy as that? Is it even possible? The UK has a long history of innovation going back centuries. In Cambridge, the UK has it’s own version of Silicon Valley and the 2 are in partnership from time to time. Again, Cambridge has the right mix of people, ideas and money.
However, a bigger question would be is it possible to take this entrepreneurial spirit to other areas of the UK – what about Birmingham or the West Midlands where manufacturing seems to be taking a never-ending nose dive? Do we have what it takes to develop this same sort of business culture to want to try things and succeed?
Historically the workforce in the West Midlands has mainly been focused on the manufacturing sectors. But with the decline of those sectors unemployment has set in, with above average unemployment levels and economic inactivity. There has been a qualifications gap in the West Midlands compared to other parts of the country, and this is a sign of lack of knowledge and skills which are key in driving a knowledge based economy.
But another possibly more important aspect to people is culture. Do people in the West Midlands have the culture and work-ethic to want to succeed in business? Well there is no doubt that traditionally the area has been known for it’s hardworking workforce, and the immigrant communities from South East Asia, Eastern Europe and the Middle East have made their own mark to the area developing trade.
More generally, it is interesting to consider whether areas like Birmingham, Sandwell and the Black Country still have the strong will to do well and succeed. Are our schools instilling our kids with this ethic? Is our media promoting strong business sense? Are our colleges developing students enough?
In short, if we want to be anything like a leading UK or world knowledge based economy then we need to develop our workforce, graduates, students, children to have a real will to be the best, to want to succeed, to want to innovate and be creative. Existing and established businesses need to work in partnership with educational facilities to support this growth and make sure the skills developed are what the economy actually needs.
Again, going back to the roots of the Industrial Revolution in the West Midlands, it was such legends as Matthew Boulton and James Watt who propelled the Midlands and Black Country into the a leading role in industry. Their legacy is still alive with a strong industrial and manufacturing aspect to many of the key employers in the region. Technology plays an important role in many businesses too, from car parts manufacturers to designers to biotech firms.
If the West Midlands is to make itself into more of a knowledge based economy then skilled people need to be allowed to try their hand at business without stigma of failure attached to it. If you think that all Silicon Valley startups are success stories then of course it’s wrong. The same is for any business set up anywhere, there will be success stories, but of course there will be failures too. The difference is, in places such as Silicon Valley, there isn’t a fear of failure, more an opportunity to learn and do things differently next time.
The number of startups surviving beyond 3 years had actually grown in the West Midlands at the start of 2002, although the recession may have had an adverse hit on those figures. Despite this, if graduates and skilled workers are given an impetus to succeed, by councils, chambers of commerce and business leaders, the surely more ideas will flow into the economy as backed up by this interactive map showing the West Midlands as 4th in a list of regions showing entrepeneurial activity (behind only London and the South West).
Money can be difference which allows everyone to hear about your company, huge publicity and the financial, legal, intellectual and business support of highly skilled professionals. Places like Silicon Valley and Cambridge have venture capitalists and business angels constantly on the lookout for the next big idea – and that is another reason why those people with the ideas flock to those areas.
These days strong economies such as China, India and Qatar are able to support people with ideas and help nurture them. And when you contrast this to a region with declining output and poorly skilled people, then of course it becomes apparent why money isn’t there and a catch 22 situation emerges.
In times of recession and economic downturn everyone has to tighten their belts however, and StudioRav mentality is to do things at a sensible cost and if you can save money then of course you should. So, despite the region not having enough funds to splash on new ideas as other parts of the world it should not be classed as detriment to success.
The West Midlands is an area which needs to undergo dramatic change if it is to strengthen itself in the future economy. Traditionally industrial and manufacturing sectors have flourished but as work goes overseas only the most highly skilled jobs are left behind. Emulating the success of places such as Silicon Valley has obvious advantages – more business, more money, a change in attitude and culture.
It has actually be said many times before, but business and educational establishments working together would help to identify key areas of development. Sectors such as those related IT, technology and R&D also need to consolidate their expertise and build communities which can lead and create trends – using an economies of scale type of format to build opportunities. Finally, strong networking and more promotion of the region by leaders and councils should allow more money in giving entrepreneurs a taste of more to come.
Overall however, one of THE most important things is something which is almost inborn into a person – the desire to do well, to be the best, to have a goal and reach it. This can’t be bought, maybe it can be nurtured, but most of all it’s an aspect of our culture which will benefit everyone whether in business or not.